NBA coronavirus suspension could land MASSIVE financial blow of up to $500 million

Utah Jazz confirmed on Wednesday night (Thursday IST) that center Rudy Gobert was tested positive for coronavirus, putting the entire league into a state of hysteria and panic. NBA subsequently released a statement confirming that all NBA games have been suspended for an indefinite period of time. The statement further read that the league would use the hiatus to contemplate on further actions in regards to the pandemic. While the NBA fans are sweating over the outbreak causing a premature end to the current season, the league could be bracing for a major financial hit if the league fails to conclude its current season. 

Also Read | NBA coronavirus: NBA suspension after Rudy Gobert Tests Positive For Coronavirus 

NBA coronavirus: NBA salary cap to take a major hit?

Multiple reports across the US have already analysed that the NBA suspension could result in loss of a massive amount of revenue. The Athletic delved further into the numbers stating 'the league as a whole would lose over $500 million'.

If the NBA does resume to complete the remainder of the season, it could be forced to play games in empty stadiums, which could result in a huge amount of loss. However, if the season does not resume, the financial hit could potentially have its effect on the subsequent season due to the NBA's Basketball Related Income (BRI). The Athletic explained BRI and its impact on the NBA salary cap for next season stating 'playing the rest of the season in front of empty crowds could theoretically drop next year’s NBA salary cap by up to $8 million.

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According to Spotrac, the current NBA salary cap is $109 million with a luxury tax threshold of $132.6 million. The 2020-21 NBA salary cap is projected to be $115 million, with a luxury tax threshold of $US139 million. However, these numbers could plummet it the current season fails to conclude. 

Income from home games could also take a major hit as the report further adds that the top teams' earning could fall below $2 million per home game while teams like Memphis Grizzlies and New Orleans Pelicans could drop below $1 million. 

Also Read | NBA coronavirus: NBA Suspension Indefinitely As Utah Jazz Player Tests Positive For Coronavirus

NBA coronavirus: NBA suspension and season fate to be decided soon?

While the financial hit could be drastic, these discussions are still premature as nothing has been finalised by the NBA as of now. NBA teams have reportedly begun limiting the number of fans at the arena. Meanwhile, reports suggest NBA commissioner Adam Silver could make an announcement over the fate of the current season as early as Thursday. 

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