National Basketball Association (NBA) franchises are set to receive a US$30 million cash injection to avoid liquidity issues due to the ongoing COVID-19 pandemic.
All 30 teams are set to receive a cut of the US$900 million raised by the league in the private placement market, Sports Business Journal reported. Each team is set to receive their allocation this month ahead of the 2020/21 season, which will start from December 22.
The report also stated that teams will be able to spend the money as they wish, with the NBA paying back the fees from ‘general collective league sources’.
This will be the first time that the NBA has turned to the private placement market to provide funding for its teams that are set to suffer further financial strains from playing with few or no fans.
Borrowing allowances were raised from US$650 million to US$1.2 billion in March as the coronavirus pandemic started to take hold across the world. It is believed that NBA officials are looking at extending this until October 2023.
Earlier this year, a report from ESPN claimed that the NBA had seen its revenues fall by ten per cent to US$8.3 billion, relating to lost revenues from the pandemic.
The NBA receives 40 per cent of its revenues from game-days, including ticket sales, concessions and other arena incomes, that could severely impact the further losses of the league and its teams this season too.
Author: Jake Wilkin