The NBA "will give each of its 30 teams a cash distribution" of $30M, for a total of $900M, to "bolster finances and protect against any potential liquidity issues caused by the pandemic," according to John Lombardo of SPORTS BUSINESS JOURNAL. The $900M "comes from notes issued by the league in the private placement market that typically includes large insurance companies and other institutional investors." Sources said that each team is "expected to receive" the $30M "this month as the NBA heads toward its Dec. 22 tipoff." One source said that teams "can spend the money for any need within their organization, with the league paying back the notes from 'general collective league sources.'" The NBA "issued two tranches of debt," $450M each, "through three- and four-year notes." The league "priced in late November and is closing in December, but undisclosed are the interest rates tied to the notes." While the NBA "routinely gives cash distributions to teams, this is the first time it has turned to the private placement market to fund cash outlays." The $900M private placement is a "separate transaction and is not part of the revolving credit facility" that the league this past spring increased to $1.2B from $650M. One source said of the private placement, “It is to help teams with cash flow and liquidity issues, if they have any, especially if they are playing in front of no fans" (SPORTS BUSINESS JOURNAL, 12/7 issue).
