The NBA has already lost an enormous amount of money during the two months in which the season has been suspended, but that is only the beginning. As the league grapples with potentially reopening in order to hold a postseason, it has to consider the enormous financial ramifications of what canceling the season might mean.
According to The Athletic's Sam Amick, approximately $900 million in television revenue would be lost if the NBA canceled the playoffs. That does not include the revenue that will be lost from local television deals if the regular season does not resume. Regional sports networks are owed at least 70 games in those deals, and most teams are currently in the mid-60s.
Even if the league were to resume the regular season and get to 70 games in order to satisfy those contracts, there is still the matter of lost gate revenue from both the regular season and postseason. A recent estimate suggested that 40 percent of the NBA's revenue is derived from fans attending games. Without them, virtually everything comes from television. That is the driving force behind potentially restarting the season from a financial perspective. The league is already bleeding. Losing the postseason as well would be financially devastating.
NBA players have already taken 25 percent pay cuts, but even that combined with 10 percent escrow withholdings and money reclaimed from the force majeure clause in the CBA likely won't be enough to offset the lost revenue from this shutdown. A long-term solution will be needed to sort through the wreckage here. That could mean lowering the salary cap or instituting some form of cap smoothing, as has been widely suggested.
That solution is still a ways off. What matters to the league right now, aside from obviously protecting the health of players and staff, is finding a way to collect that very necessary $900 million. Both the league and its players are sorely in need of that cash infusion.
