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The NBA plans to distribute $ 30 million per team, $ 900 million in total, to bolster the finances of each organization and help with liquidity problems caused by the ongoing coronavirus pandemic, Sports Business Journal reported Monday.
The money was obtained from notes issued by the NBA in the private placement market, according to SBJ. The league will return the notes from “general collective league sources” and it is unclear what the interest rate is, according to the report.
Each team must receive the funds this month before the 2020-21 season and can spend them 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 stadiums, the funds are designed to keep each team’s bottom line afloat. The NBA gets about 40 percent of ticket sales.
“Like any corporation, you will have an outstanding letter of credit or bank facility for tough day needs or strategic investment needs, things like that,” Chad Lewis, senior director at Fitch Ratings, told SBJ.
“They have complete discretion on how to disburse funds. Not all teams will face difficulties, but obviously they want to have a solid balance … to help teams in difficulty, something like this central role of the league in government and all that Really strengthen your balance of the unknown. “
NBA revenue fell to $ 8.3 billion last season, ESPN reported.
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