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Monday, July 13, 2020

NBA salary cap, player incomes for next season likely to drop as consequence of coronavirus

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The coronavirus pandemic is going to result in significant economic consequences, and the NBA seems to be planning that some of their financial losses will result in a drop in the salary cap next year.

NBA commissioner Adam Silver said on Thursday that the league would likely be on hiatus for at least 30 days due to the coronavirus pandemic. Now, ESPN’s Adrian Wojnarowski reports that the NBA is viewing mid-to-late June as a possibility for the earliest resumption of the season. The late date is in part because of fears that the United States had a slow reaction to flatten the curve regarding the spread of the coronavirus.

With games on hold for several months, the NBA is trying to make financial projections for three scenarios:

1) shutting down the season entirely
2) restarting with no fans
3) playing playoff games with fans

The league is considering alternate venues for games if they are played without fans, because the optics would be somewhat silly if 15,000-plus capacity arenas are empty. That means team practice facilities could even be used for games.

One nugget of significance that Wojnarowski included in his article is that lost revenue from the 2019-2020 season “will be reflected in next year’s salary cap and the players’ share of basketball-related income.”

The NBPA has issued memos to players saying they are expecting everyone to be paid as scheduled this season. But the players will now have to understand that if fans can’t attend games, the league loses a valuable revenue stream, which hurts both owners and players.

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