The Chicago Bulls — along with all other 29 NBA franchises — are set to receive a $30 million cash infusion as the league aims to ensure the financial well-being of all of its teams.
The NBA has financed the $900 million they plan on sending teams through three- and four-year notes financed through the private placement industry, which is mainly made up of insurance companies and institutional investors.
The league has stated they plan on paying back these notes from “collective league sources”. However, the interest rates on the notes are unknown.
Overall, the ability of the NBA to effectively borrow $900 million signals the financial strength of the league and the opinion of it throughout the broader financial industry.
How Does This Affect the Bulls?
The Bulls have not commented on the $30 million lump sum and it is currently unknown how the organization will use the money. The Bulls are one of the more financially sound teams in the NBA, ranking ninth in team revenue during the 2018-19 season and fourth in overall valuation in 2019.
However, the cash infusion will certainly help all teams, no matter their valuation. It is estimated that, on average, 40% of revenue comes from gate receipts. With no fans indefinitely, teams will be hurting revenue-wise.
The Bulls will be in the majority of teams not having fans to begin the season as the team announced that no fans will be watching basketball inside the United Center indefinitely. This comes as no surprise as COVID-19 cases in the Chicagoland area have spiked in recent weeks.