How Could The Coronavirus Outbreak Impact The Cavaliers Financially?

The entirety of the 2019-20 NBA season has been tumultuous throughout the year. From the earthquake during Zion Williamson’s Summer League debut to Daryl Morey’s controversial tweet in support of the Hong Kong protests to Kobe Bryant’s tragic passing, the hits just keep coming. On Wednesday night, the NBA was shaken to its core again. A game between the Utah Jazz and the Oklahoma City Thunder was cancelled after it was discovered that Utah center Rudy Gobert had tested posted for coronavirus (COVID-19). As a result of this, the NBA has suspended play until further notice so they can figure out the proper steps forward.

In the meantime, opposing teams that have been in contact with both Gobert and the Jazz within the last ten days have been ordered by the NBA to self-quarantine for the next two weeks. One of those teams are the Cleveland Cavaliers. The Cavaliers hosted the Jazz on March 2 at Rocket Mortgage FieldHouse and obviously came into contact with Gobert. Cleveland players and officials were informed soon after news broke that the team would be no longer traveling to Charlotte and were told to stay home, per league sources.

Thankfully, the Cleveland Clinic, one of the Cavaliers global partners, has developed an in-house coronavirus test that will deliver results in hours instead of the normal two to seven day window. As of right now, coaches, players and members of the organization have not heard anything about any potential testing, per league sources. But, if it were to come to fruition, the fact that Cleveland’s personnel can receive results in hours instead of days has to give them some peace of mind.

But, going forward what will happen to the Cavaliers? The team is at an impasse while they are forced to self-quarantine by the NBA for the next fourteen days. During that time, the NBA, the NBA’s board of governors and the NBA Player’s Association will try to figure out the next step forward all while those quarantined can hopefully be rid of the virus. In reality, it will likely be longer than that. When the virus first broke out in China, the Chinese Basketball Association suspended play for nearly ten weeks. If that were the case, the financial implications for Cleveland could be massive.

Of course, it’s in everyone’s best interest to continue play at some point this year, even if it means having to start the 2020-21 NBA season at a later date. This would allow the league to make the money it normally would and allow the players to finish this season. Thankfully, for now, Cleveland’s players will still be paid due to their contracts already being fully guaranteed at the start of the season. But, there is a provision in the league’s collective bargaining agreement that would allow the league to not pay players their full salary during an epidemic like this.

According to Article XXXIX, Section 5, players can lose 1/92.6 of their salary for every game missed as a result of a Force Majeure Event. A Force Majeure Event refers to events or conditions that makes it impossible for the NBA to perform its obligation, such as an epidemic like coronavirus, under the collective bargaining agreement. That means the entirety of Cleveland’s roster could go risk losing $17,163.43 per game if the league were to enact this policy. During their forced self-quarantine, the Cavaliers could lose out on $120,441.01 combined due to the provision. Obviously, that number only increases the longer the coronavirus suspension lasts. But, it remains to be seen if the league will actually enact this policy.

The potential for financial loss due to coronavirus just doesn’t impact the players on Cleveland’s roster, it hits the organization as well. On average, 17,816 fans attend Cavaliers home games at Rocket Mortgage FieldHouse. According to TicketIQ, the average secondary ticket cost for a Cavaliers home game is $72 this season. During the team’s forced self-quarantine, they were scheduled to be on the road for five games and home for two. That means, the Cavaliers organization could face a potential loss of approximately $2.6 million in ticket revenue. If the suspension carries through the remainder of the season, Cleveland then faces a potential loss of approximately $6.4 million instead. If you factor in the potential money lost in concessions and alcohol sales, then the number grows substantially.

Clearly, the coronavirus outbreak has major implications in all spheres of the financial world, the NBA included. The longer this NBA suspension goes on, the more both players and organizations could risk to lose financially, the Cavaliers included. Hopefully, the two week period is all everyone needs to properly recover and find a solution. If not, there could be serious ramifications that could impact the NBA league-wide, such as the salary cap, going forward.

This article was written by Evan Dammarell from Forbes and was legally licensed by AdvisorStream through the NewsCred publisher network.