The coronavirus crisis has disrupted every day life for billions of people across the globe. The NBA is no different. From salary caps to in game experiences, everything is going to change. What will a post-coronavirus NBA look like for the Boston Celtics as well as for all the other 29 teams in the association?
Like most Boston Celtics/ NBA fans, I was heartbroken and at a loss for words when the remainder of the season was suspended in light of the coronavirus pandemic. And as the crisis deepens and everyday life for most Americans has been so fundamentally disrupted, it’s becoming more and more clear that there probably won’t be any more NBA action for the foreseeable future.
For me, like many sports fans, the first indication that this was going to be an unprecedented crisis was the abrupt cancellation of the NBA season.
In the grand scheme of things, the loss of human life and the toll this will take on our collective psyche will far outweigh the loss of professional basketball. It’s hard for me to sit here and feel bad about my precious sports going away when people are getting sick and dying. This is truly a scary and tense time, and it’s important to keep things in perspective now more than ever.
However, no matter how much things might change, no matter how dark things might feel, we will come out of this eventually.
Things will get worse before they get better, no doubt about it. But they will get better. Life will be back to normal.
Things like sports are going to be critical to helping restore that feeling of normalcy.
And, as I sit here cooped up at home, I can’t help but think about what that new NBA landscape is going to look like for all 30 franchises, especially for my beloved Boston Celtics; what that new normal is going to be like.
It often feels impossible for me to take off that analyst hat, especially given all the newfound free time. As much as we might not want to think about it, the NBA is going to change because of this pandemic.
The NBA is first and foremost a business
Exasperated coaches, disgruntled players, and Darren Rovell are constantly reminding us of the simple fact that, at the end of the day the NBA is a business. The league requires money to function. And this pandemic is going to hit them hard in that regard.
People have talked non-stop this season about a ‘ratings crisis’. Some have attributed it to the Hong Kong debacle and the loss of the China television market. Some have blamed load management and players taking nights off for rest. Some have blamed a weak national TV schedule that leaned heavily on a Zion Willamson-less Pelicans and the Steph Curry-less Warriors. Some have blamed the shifting aesthetic of the game, that the perimeter-oriented game of the present is boring or less entertaining.
Whatever the case may be, there is a problem. And Adam Silver, to his credit, has been proactive to the point of appearing desperate to alleviate the situation.
He’s proposed mid-season tournaments and play in tournaments and a slew of other gimmicky ways to boost TV revenue.
After the Hong King controversy the league went as far as revising forecasts for next season’s salary cap, lowering expectations from the projected $116 million down to $113 million (from $109 million this season).
Although it might not seem like much, $3 million dollars is what a late first round pick makes in salary or how much the margin of error on a max-extension deal might be. In any case, it’s clear that losing ground in this market is hurting NBA viewership and the league’s bottom line.
Now, add in the loss of the entire postseason.
More views equates to more money! Less views… well…
The NBA playoffs is the league’s main driver of viewership and ratings, therefore is crucial to the league’s cash flow. Simply put, the financial success of the NBA is made or broken based on playoff engagement.
This financial success or failure has a direct influence on the salary cap.
The collective bargaining agreement between the players association and owners allocates about 50 percent of all ‘basketball related income’ league-wide to player contracts. Roughly speaking, split that 50 percent share up by 30 teams, and that’s your salary cap.
This includes TV and streaming rights. So when league revenues are down, that 50 percent of the pie shrinks.
In 2017 analysts over at clutchpoints.com estimated that the Golden State Warriors sweep of the Cleveland Cavaliers drove the salary cap down by nearly $1 million the following season. In other words, a series shortened by a sweep means losing two or even three games of revenue that have a direct impact on the cap.
Now imagine losing the entire playoffs.
The NBA plays anywhere from 60 to 105 playoff games per season. Last year there were 82 total playoff games. It would be a financial nightmare for the NBA to lose the playoffs from a ratings standpoint.
It’s why owners and the league have been so hesitant to call off the playoffs and tried so hard to formulate a plan to reschedule them to later in the summer.
So what would the salary cap look like in an increasingly likely scenario that the playoffs are cancelled? Let’s start with some assumptions.
Let’s assume that each round is twice as valuable as the last from a revenue standpoint. Each Finals game worth $500k towards the cap, Conference Finals game $250k, Conference Semifinals $125k, and first round game $62.5k.
Let’s also assume an average length of each round. Average of five total games in the Finals, 11 games total in the conference finals, 22 games total in the conference semifinals, and 44 total games in the first round.
The salary cap could be expected to decrease by $2.75 million per round not played, for a total of an $11 million reduction in each team’s salary cap. Subtracting that from the league’s already reduced cap projection of $113 million lands the cap at roughly $101 million.
That would bring us back to a 2017-2018 level of room.
Just like how in the summer of 2016 players like Timofey Mozgov and Ian Mahinmi signed monster deals when the cap spiked nearly $25 million, free agents are going to have to sign much, much smaller deals because of a cap shrink.
Max deals, rookie scale contracts, and mid-level/ taxpayer exception contracts are going to shrink because they are all calculated as a percentage of the salary cap at the time they are signed.
But the problem is that player contracts are not paid as a percentage or scale.
Boston Celtics wing Gordon Hayward is still going to make $34.2 million next season regardless of what the salary cap is. A bad contract is suddenly going to look astronomically worse when teams have $11 million less flexibility.
So, what does this mean for the Boston Celtics?
And that’s just for four players.
The importance of Gordon Hayward’s player option, which I wrote about earlier in the season suddenly skyrockets. Should the cap shrink, and he opts-in, Boston becomes a luxury tax paying team and are afforded much less flexibility in signing free agents.
What’s perhaps more interesting is that Jayson Tatum will be due for a max extension next year. Under the current cap climate he’s slated to earn $29 million per year, perhaps more should he make and All-NBA team and become eligible for the supermax.
However that number could shrink dramatically if the cap were to be reduced significantly at the time of the signing.
It’s possible that were Tatum to sign under an unfavorable cap climate, his max deal could be worth significantly less than the less-than-max $25 million/year deal Brown signed earlier this season.
For the Boston Celtics, this could be a boon.
Assuming that the cap returns to normal levels two seasons from now, the Celtics will find themselves with two young superstars signed to extremely affordable contracts. This will grant them much flexibility.
Obviously this would be bad for Tatum, who would be paid much less than he’s actually worth just because he signed his extension at an inopportune time. He is well deserving of a max deal, and I think most Boston Celtics fans would be fine giving him all the money he desires.
In the end, this is still all hypothetical
Of course, this all becomes a moot point if the NBA manages to reschedule the playoffs, which at this point is still quite unclear. Or if we even have a next season.
The virus isn’t going away any time soon, and it’s quite possible this crisis extends all the way into the winter.
Even if the NBA does come back, and the virus is weakened but still active, it’s entirely possible that they play games without fans. Adam Silver has already explored the option. How would the game be different without an arena full of screaming fans?
LeBron James has already expressed his trepidation at the prospect of playing in empty arenas.
News is changing rapidly. This virus has thrown everyone’s lives into flux. All we can do now is stay inside, wash our hands and do our best to flatten the curve.
Stay safe everyone out there!!