The Negative Financial Aspects of the NBA Bubble

You may have very well enjoyed the NBA restart in Disneyland, but league administrators sure did not. The Bubble, which cut 117 regular-season games and played all games without fans, lost $1.5 Billion in revenue.

The financial drama in the NBA actually started even before the global pandemic. Before the season, Rockets General Manager Daryl Morey put out a controversial tweet, which caused China to boycott the NBA and cut broadcasting completely. That single tweet costs them hundreds of millions of dollars. 

Flash forward to the virus; the bubble cost over $200 million just to put together. While many people anticipated that these bubble games’ ratings would be higher than normal with limited sports, the exact opposite ended up becoming a reality. The NBA had its lowest-rated finals and playoffs of all time. 

The finals averaged a pathetic 7 million viewers per game, less than half of its average from last year’s finals. Despite the NBA having its biggest star, LeBron James, in the finals and TV shows, and other sports being canceled, the NBA could not capitalize on less competition for viewership.

In total, the NBA lost over $1.5 billion in total revenue. This is one of the reasons why the NBA is currently looking to start the next season sooner. This upcoming season will likely have a shortened 72 games schedule, which will allow NBA players to be ready for the summer Olympics.

The NBA’s financial loss will negatively impact the team’s salary cap, but player salaries will also take a dip. Teams like the Golden State Warriors, with high payrolls, will have to pay a large luxury tax to compensate for the salary cuts. 

Additionally, this offseason may make it difficult for teams to acquire free agents wanting a big contract, as there will not be much money to go around due to these conditions.