NBA fears January start to season could cost league up to $1 billion in revenue losses, sources say
After pushing back a deadline until next Friday that would allow for the NBA to serve notice on termination of the collective bargaining agreement in the wake of the coronavirus pandemic, the league and the National Basketball Players Association are running short on time to agree on starting the NBA’s season before Christmas.
And without assurances that the pandemic will allow for fans in arenas this season — and projections that their absence could cost the league more than $4 billion in lost revenue — the NBA fears delaying the start of the 2020-21 season until January could cost the league an additional $500 million to $1 billion in revenue losses next season and beyond, sources said.
The consequences for the league’s players would be a steep drop in salaries due to the collective bargaining agreement’s 50-50 revenue split between the league and players.
The NBA and NBPA are still at odds over a start date to the season, with the union resisting thus far a league plan to open a shortened 72-game regular season on Dec. 22 and complete the NBA Finals before the Summer Olympics in July, sources said.
The union has countered with a mid-January start, but wants to continue discussing the issue with its players, sources said. There is a level of impatience growing within the NBA, which wants to get a deal executed and get plans for a new season moving quickly, sources said.
NBPA executive director Michele Roberts has publicly and privately registered doubt about the desire of a significant portion of players for such a quick turnaround, with the Orlando bubble restart ending less than seven weeks before the presumed opening of training camps around Dec. 1.
Significant gaps remain between the NBA and NBPA on how the league will account for reductions in players’ salaries in light of the significant financial losses for 2019-20 and steeper projections of losses next year, sources said. The NBA and NBPA split the basketball related income (BRI), and the league recently told teams that 40% of that revenue could be lost without gate receipts this season, sources said. The NBA’s revenue was down 10% to $8.3 billion for the 2019-20 season, according to data provided to teams from the league.
Most NBA cities are still unable to have public gatherings of more than 500 people. The NBA plans to start the season without fans in arenas — with little confidence that they’ll be able to return any time early in the season as a second wave of the coronavirus pandemic spreads across the country.
A mid-January start around Martin Luther King Day would take the league’s season past the July Summer Olympics and into the summer months, when the league fears television ratings would plummet. The NBA is estimating significant financial turmoil if the league has to compete with the Summer Olympics for television ratings in July and then be forced to adjust the NBA calendar for the 2021-22 season, sources said.
Both the NBA and NBPA have the option of tearing up the collective bargaining agreement, which would be a doomsday scenario for the possibility of the league returning to play in the 2020-21 season.
The pandemic triggered the force majeure clause in the CBA, and both the league and union have the ability to terminate the agreement and negotiate a new one. Nevertheless, it makes far more sense for the owners to consider such a dramatic option because the CBA’s structure wasn’t meant to sustain these kinds of financial losses. While the NBA has reserved the right to terminate the deal — which would almost assure a lengthy stoppage in play for the league — that threat has yet to become a serious factor in these months-long negotiations. If there’s no deal by next Friday’s new deadline on the termination of the CBA, perhaps that could change.
The NBA and NBPA have extended that opt-out window four times this year, including again Friday, as a good-faith gesture toward reaching structural changes to the CBA. For now, the union and league will continue talks through the weekend and into next week, sources said. For the season to start on Dec. 22, however, there’s much work to be done.