The league does not hand out official numbers on this, but it is believed that income from China accounts for at least 10 percent of the net revenue flowing into the NBA (and that percentage is growing fast). A growing number of Chinese companies have lined up to do business with the NBA, a league and sport popular with youth in China.
Until the firestorm caused by Rockets’ GM Daryl Morey’s Tweet about Chinese protestors.
Since then 11 Chinese companies who partner with the NBA — including shoe company Anta as well as Ctrip.com, Changhong, Meiling, Dicos, EHi Car Rental, Master Kong, and WuZun among others — have suspended working with the NBA.
That could impact the NBA’s bottom line, something Keith Smith of Yahoo Sports Tweeted about.
Sources told Yahoo Sports that some NBA teams are doing scenario planning for the $116M salary cap for 2020-21 to drop by as much as 15% due to situation between NBA and China. Story is up now @YahooSportsNBA:https://t.co/DeXyyk0mFM
— Keith Smith (@KeithSmithNBA) October 10, 2019
From yesterday. This is part of a cap expert's life in the NBA. They run scenarios all the time, both likely and unlikely. Much like with scouting players, teams leave no stone unturned with cap planning as well. No one thinks it will be this drastic, but better safe than sorry. https://t.co/uVLoB9MK0d
— Keith Smith (@KeithSmithNBA) October 10, 2019
Any cap hit from this could impact teams in free agency next summer (even with what will be a down market).
With the Lakers and Nets playing their games in China this week, most observers expect this controversy to slowly die down. Business will return to normal because it’s good for both sides.
But teams are going to be ready, just in case.