Report: NBA to dole out $900M to buoy teams’ finances
The NBA is planning to dole out $30 million per team — $900 million total — to bolster each organization’s finances and aid with liquidity issues caused by the ongoing coronavirus pandemic, Sports Business Journal reported Monday.
The money was raised from notes issued by the NBA in the private placement market, per SBJ. The league will pay back the notes from “general collective league sources,” and it’s unclear what the interest rate is, per the report.
Each team should receive the funds this month ahead of the 2020-21 season and can spend it on any need within their organization, according to the report.
With the regular season shortened to 72 games and teams playing in empty or limited-capacity arenas, the funds are designed to buoy each team’s balance sheet. The NBA gets about 40 percent from ticket sales.
“Like any corporation, you’re going to have a letter of credit or bank facility outstanding for rainy-day needs or strategic investment needs, things like that,” Chad Lewis, senior director at Fitch Ratings, told SBJ. “They have full discretion over how they would disburse the funds. Not all the teams will be facing difficulties, but they obviously want to have a strong balance sheet … to aid distressed teams, kind of this core league role in governance and all of that. Really strengthen their balance sheet for the unknown.”
NBA revenue dropped to $8.3 billion last season, ESPN reported.