A bubble worth $1.5 billion

It cost the NBA about $180 million to put on the bubble at the Walt Disney Resort property in Orlando. In return, the restart allowed the NBA to stem the loss of about $1.5 billion in expected revenue. The bulk of that money was tied to national and local television revenue followed by league sponsorships.

Contractual obligations

Much of the teams’ and league sponsorship contractual obligations were also fulfilled at Disney by adding virtual ads and other activations, notably the Michelob Ultra Courtside Club, that drew 60,000 virtual fans who logged into the fan wall during the 172 games played at Disney.

Other sponsor contracts were fulfilled by virtual signage during TV broadcasts and hard signage around Disney courts. For the Finals, the NBA unveiled a new court design that, for the first time, put the logo of Finals presenting partner YouTube TV at center court while also placing Walt Disney World script on each side of the court.

Without a doubt, the $ 180 million bubble investment was worth it.

Damage control

However, that $1.5 billion did not come close to making the NBA and its teams whole from the lost games due to the coronavirus pandemic. Nevertheless, it limited the bleeding. The league’s revenue took a serious hit with around 20% of home games canceled, then the playoffs delayed and moved to a bubble. TV ratings were also down by 37%, including record-low viewership for the Finals,

The NBA and the players’ union are currently negotiating the salary cap — and cap smoothing — for next season. It is something that Silver talked about during the Finals. Those talks include forecasting the revenue for next season. That’s a tricky proposition because nobody knows when fans will be allowed back in arenas in mass (and if they will come when they can). Those negotiations are aided by the money the league recouped with the bubble.