NBA Could Lose Over a Billion Dollars Because of Players’ Reluctance to Start Early: REPORTS

The 2020 NBA season ended in October. A successful stint in the NBA Bubble concluded with the Los Angeles Lakers winning the NBA Championship. When the COVID-19 pandemic shut down the league, there were concerns that the NBA season would end. Yet the executives, after discussions with the players’ association, decided on resuming the season in the NBA bubble.

Recent history has suggested that it is difficult to ever cancel an NBA season. The last time a season’s continuity was threatened was the 2011 lockout. The lockout sparked due to a disagreement between owners and players over the share of earnings given to players.

After the expiry of the original Collective Bargaining Agreement of 2005, NBA owners wanted to reduce the share of money given to players from league revenue. After intense negotiations, they agreed to better terms and the 2011-12 season took place with a reduced 66 games.

What may happen in the upcoming season?

The 2020-21 season has a different set of challenges. League executives are trying to set a reasonable date to begin the new season. The understanding is that the new season will have lesser games. Reports emerged last week that the NBA wanted a 72-game season starting from late December. But the players’ association is opposed to that plan, as they believe it doesn’t give enough time between the end of the previous season and the beginning of the next. For example, the Lakers and the Heat would only get 51 days of rest between their Finals appearance and the new season.

The NBA may undergo financial woes

The NBA pushed for a December 22 start day for the new season, primarily for financial concerns. According to NBA Analyst Bobby Marks, the NBA could lose a lot of money should they choose to begin the season in January, rather than December. The loss could reach almost $1.6 Billion for the NBA.

Marks also explained to fans who were confused as to why this didn’t happen during the lockout season of 2011-12. “This is totally different from the 2011 lockout when 66 games were played- the reason? Revenue that the NBA knew was coming in from 33 home games. BRI decreased only $500M in 11-12 from 10-11. There is a TBD for 2020-21 with the early projection of billions lost.

“In 2011, 66 games reduced player salary from $1.9B to $1.6B. However, players only saw 10% escrow taken with $105M eventually returned. For 20-21, players will see a reduction in pay from 82 to 72 games (or more) that is comparable to 11-12.

“Escrow is going to (increase) (from 10% to ??) because of the lack of revenue coming in. If revenue comes in at $6B and player salaries $4B- the revenue split of 50/50 is out of whack. How do you fix it? Triple (and that is conservative) the escrow amount taken out.”

Given the dire financial constraints, the NBA will hope to strike an agreement with the players to resume in December. The players themselves will take the amount of money they may lose into consideration.