Golden State Warriors Line Up a Big Deal Amid Ongoing Economic Hit for NBA
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After four months without any action, the NBA returned in the Orlando bubble with a bang. Despite being scrimmage games, fans are happy about basketball returning. However, with the pandemic still around, fans will most likely not be able to attend games. This will hurt revenues for teams, but the Golden State Warriors are already finding solutions to avoid big hits next year.
“Golden State Warriors owner Joe Lacob has informed fellow owners of a deal he’s considering with Goldman Sachs to raise up to $250 million to manage coming expenses.,” Brian Windhorst from ESPN reported. This has intrigued other teams too and they are also pursuing similar deals. “Other owners are investigating opportunities to raise capital as well, ownership sources said, with some pursuing legal action against insurance companies that have denied coronavirus pandemic claims.”
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Golden State Warriors taking early measures
“The Warriors have the ability to raise money that a lot of teams can’t,” one team president said. “Good for them. If our team was in that situation, we may have to trade players to deal with it.”
Entering into the 2020-21 season, the Warriors will have the highest payroll in the NBA (as it stands). They will be at $148 million according to current contracts. They have four players on the roster making over $20 million. Draymond Green will be making $22 million next. $29 million for Andrew Wiggins. $35 million for Klay Thompson and finally $43 million for Stephen Curry.
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So the Warriors had to act early. Other teams may not be able to secure similar deals. They will be forced to trade away players or sell their picks for cash considerations.
“Owners are allowed to borrow $325 million against the equity in their teams. Even though some teams have more than a billion in equity, that rule has long existed to protect teams from being overleveraged. A majority of teams, including the Warriors and Rockets, have already maxed out that credit, sources said.”
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Back in April, Adam Silver told ESPN that “40% of the league’s revenue comes from money built around game nights in arenas.” With so much money on the line, the NBA will have to figure how to ensure the teams don’t end up in debt.
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NBA owners’ current financial turmoil portends future payroll problems
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