NBA reportedly saved up to $1.5B in losses by resuming season at Disney bubble site
The Walt Disney World bubble cost the NBA millions to carry out. But that investment kept the league from losing up to $1.5 billion in revenue, Sports Business Daily’s John Lombardo reported.
The league paid for exclusive use of the Disney land resorts and completed its regular season, plus the standard-length postseason, at ESPN’s nearby Wide World of Sports.
It cost $180 million to stay there for 100 days, per Sports Business Daily, which comes out to about $1.8 million per day. But that was worth the alternative.
NBA preserved $1B holding bubble site
The league was nearly done with its regular season when the COVID-19 pandemic forced a hiatus in mid-March. The league decided to go ahead with a strict bubble to keep its athletes healthy — there were zero positive COVID-19 tests — and crown a champion. The Los Angeles Lakers won the title last week.
Deciding to do that, even given how much it cost, could have cut the financial losses of the season in half, Lombardo said on the SBJ daily podcast.
“The bubble really stopped the bleeding of these hemorrhaging loses of $1.5 billion at least,” Lombardo said.
“They preserved at least, sources are saying, more than a billion up to $1.5 billion.”
He said the actual losses will be “well over a billion dollars,” meaning the total without a bubble would have reached $2 billion at minimum. But the real number won’t be known until audits for all 30 teams are completed. Those are being done over the next few weeks, he said.
The league’s finances already took a hit at the beginning of the season because of the controversy around Daryl Morey tweeting in support of Hong Kong protesters. China’s state-run CCTV pulled NBA games from its schedule and didn’t resume until Game 5 of the NBA Finals this month. It was off for an entire year.
NBA bubble fulfilled TV, sponsor contracts
By holding the rest of its season, the NBA fulfilled its massive TV contracts. The virtual ads, courtside virtual fans club and hard signage around the courts fulfilled deals made with sponsors.
One unnamed executive from a team that was in the bubble told Sports Business Daily, “without a doubt” the effort and investment “was worth it.”
Not having fans in attendance at games will hurt the most immediately and moving forward. Approximately 40 percent of team revenue comes from ticket sales. Teams lost an estimated $1.9 million per home game lost, per calculations separately sourced by Yahoo Sports, Forbes and The Athletic.
The losses will impact the 2020-21 salary cap. Players would prefer to avoid another bubble season and front offices want to see fans in the stands for games. The new season is unlikely to start until January.
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