Report: NBA fears loss of $1 billion if season starts in January

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The NBA and the players union have been very busy negotiating through the media the past couple of weeks. Things ramped up when the owners submitted a plan saying they wanted to start next season on Dec. 22 because that generated an extra $500 million in revenue. The players were skeptical of the math on that. Not long after players union executive director Michele Roberts said most players wanted to start next season later, on Martin Luther King Jr. Day in January. The owners countered with rumors of a 50 game season — and reduced salaries — if the league starts in January. Both sides decided to push back the day they can opt-out of the CBA to continue negotiations.

Now comes this from Adrian Wojnarowski of ESPN — the owners fear $1 billion in losses with a January start.

And without assurances that the pandemic will allow for fans in arenas this season — and projections that their absence could cost the league more than $4 billion in lost revenue — the NBA fears delaying the start of the 2020-21 season until January could cost the league an additional $500 million to $1 billion in revenue losses next season and beyond, sources said.

The consequences for the league’s players would be a steep drop in salaries due to the collective bargaining agreement’s 50-50 revenue split between the league and players.

Notice they said this “and future” years. That’s part of the case the owners are making, that the league’s television partners want games on Christmas Day, and to start in January has the season running up against the Olympics in the summer and means the following 2021-22 season will not get back to the October-to-June schedule the league wants.

It’s all about leverage in negotiations. While there are a lot of moving parts, the players want a higher luxury tax line and reducing the percentage of money taken out of their checks to go into escrow. (The escrow holds money back from players in case NBA revenue does not meet projections, and with the randomness of next season, rumors of that percentage have ranged from 15% to 40%.) The owners are trying to increase their income and revenue, even if that means a short turnaround for some teams, leading to a lot of load management in a condensed schedule.

With the NBA Draft set for Nov. 18, the sides need to agree sooner rather than later. They are still talking.