Coronavirus shutdown could lead to $1 billion loss in revenue

The NBA already dealt with a purported loss in revenue earlier this year when Houston Rockets general manager Daryl Morey’s tweet in support of protestors in Hong Kong led to a disruption in business between the league and China.

But the NBA might be at a far greater loss because of the coronavirus pandemic.

Ben Golliver of the The Washington Post reported the effects stemming from the current suspension of play could result in a $1 billion loss in revenue for the NBA if they cannot resume play:

But the spread of the novel coronavirus, which forced the NBA to suspend its season last week, presents an even greater financial challenge to the league. It could push the NBA’s revenue hit past the $1 billion threshold, according to team executives and media estimates, should the rest of the regular season and postseason be canceled. For a league that had enjoyed a decade of prosperity, the combination of the Hong Kong controversy and the coronavirus crisis represents an unprecedented and wholly unexpected financial challenge.

Naturally, such a loss in revenue would undoubtedly have a drastic impact on the salary cap.

This is an unprecedented situation for the sporting world, and especially the NBA. Golliver reported the league’s salary cap had seen a year-over-year decline just twice in the last 35 years.

However, there is plenty of uncertainty moving forward. Commissioner Adam Silver reiterated the NBA will lean on the advice of public health officials before deciding whether the season can be resumed, but any cancellation would mean the forfeiture of future ticket sales that would likely have a drastic impact on the future of the league.