On a conference call with the league’s general managers on Monday, NBA commissioner Adam Silver told the top team basketball executives that “time is running out” on the possibility of starting the 2020-21 season prior to Christmas Day and potentially salvaging hundreds of millions of dollars in revenue, sources told ESPN.
Discussions with the National Basketball Players Association continued over the weekend and into Monday, but the union’s reluctance to agree to a Dec. 22 start and a reduced 72-game regular season has left the league fearful it has only several days left before opening training camps around Dec. 1 for a pre-Christmas tip is no longer a realistic possibility, sources said.
Optimism still exists that an agreement can be reached on the pre-Christmas start, but it has been tempered in recent days, sources said. NBPA executive director Michele Roberts and union leadership have been talking directly with players about starting the season so quickly after a mid-October finish to the Finals in the Orlando, Florida, bubble, and so far have expressed a preference for a mid-January start to the season. The NBA believes that there is somewhere between $500 million and $1 billion in revenue losses next season and beyond by failing to start the season in December, sources said.
The NBA has pushed back to Friday a deadline that keeps open the option of terminating the collective bargaining agreement, which would essentially blow up the league’s financial structure that allows for a 50-50 split of basketball related income (BRI) under the provisions of the CBA. Because of the coronavirus pandemic triggering a force majeure clause in the CBA, both sides have the option of serving notice of 45 days on terminating the agreement, sources said.
The NBA is searching for ways to increase cash flow into teams, and sources say the league is hopeful to expand guidelines on sports betting, hard alcohol and casinos that could generate between $80 million and $100 million in revenue, sources said.
NBA and NBPA talks continue to include the likelihood of a play-in tournament for both the Eastern and Western Conference playoffs, a mechanism designed to incentivize more teams to aggressively pursue the late season in competitively — and an avenue for the league, players and television partners to create more lucrative revenue streams, sources said.
The play-in tournament proposal has coalesced around the structure ESPN first reported was gaining traction in early 2018: a four-team tournament among the Nos. 7, 8, 9, and 10 seeds for the final two playoff spots in each conference.
The tournament would begin with No. 7 hosting No. 8, and the winner locking into the No. 7 spot. Meanwhile, No. 9 would face No. 10, with the winner advancing to play the loser of the 7-versus-8 matchup for the No. 8 seed, sources have told ESPN.
That setup gives the teams who finish the regular season seventh and eighth two chances to secure a postseason berth. The Nos. 9 and 10 teams would have to win twice — without losing — in order to snare one of those two spots.
The NBA debuted a version of the play-in tournament as part of its season restart in Orlando. It included a standings trigger; the No. 9 seed had to be within four games of the No. 8 seed to qualify for a play-in tournament. The Washington Wizards, who entered the Orlando restart in the No. 9 spot in the Eastern Conference, went 1-7 and failed to trigger the play-in.
The success of that format led to speculation the NBA would add a standings trigger to the play-in proposal for standard seasons. The Dallas Mavericks, the No. 7 seed in the West in 2019-20, finished 7½ games ahead of the No. 8 team — leading league insiders to wonder if it would be fair to include a No. 7 seed with such a huge cushion in the proposed 7-10 play-in.
To date, the league’s 7-10 proposal has not been tweaked to include any standings trigger, sources told ESPN. The play-in tournament is meant to be a money-generating media property. Reducing the number of teams from four to three would reduce the number of games, and thus the overall revenue generated by the tournament, sources said.
It is possible some teams might agitate for some standings-based tweaks as the general framework for the 2020-21 comes up to a vote. Significant gaps remain between the NBA and NBPA on how the league will account for reductions in players’ salaries given the significant financial losses for 2019-20 and steeper projections of losses next year, sources said.
The NBA and NBPA have discussed significant rises in the escrow withholding on players’ salaries to account for the severe losses in league revenue during the pandemic. The sides have discussed spreading out the players’ losses over multiple seasons — perhaps as many as three years — so the players don’t take such a substantial financial hit in one year, sources said. To that end, the league’s salary cap and luxury tax would need to be set over the next three years, sources said.
The NBA and NBPA split the BRI, and the league recently told teams that 40% of that revenue could be lost without gate receipts this season, sources said. The NBA’s BRI revenue was down $1.5 billion for the 2019-20 season, according to data provided to teams and obtained by ESPN.
Most NBA cities are still unable to have public gatherings of more than 500 people. The NBA plans to start the season without fans in the arenas — with little confidence they’ll be able to return anytime early in the season as a second wave of the coronavirus pandemic spreads across the United States.
A mid-January start, around Martin Luther King Jr. Day, would take the league past the July Summer Olympics and into the summer months when the league fears television ratings would plummet. The NBA is estimating significant financial turmoil if the league has to compete with the Summer Olympics for television ratings in July and then be forced to affect the return to a traditional NBA calendar for the 2021-22 season.
ESPN Front Office Insider Bobby Marks contributed to this report.