Report: NBA Raises Available Credit Line of Owners $75M to $325 Million
The NBA's board of governors approved a line-of-credit increase for owners worth up to $325 million, which could help cash-strapped teams deal with their luxury tax or cash-flow issues.
Adrian Wojnarowski of ESPN reported the news Monday. Owners were previously limited to a $250 million line of credit from the league, which is paid back much like a regular loan (with interest).
Details on which teams receive loans are not made public.
The Cleveland Cavaliers and Oklahoma City Thunder, two small-market teams, had the highest and third-highest payrolls in the league last season, per Spotrac. Cleveland is also in repeater-tax territory and could spend north of $300 million on its roster in 2018-19 if LeBron James returns, per ESPN's Brian Windhorst.
The Cavs have been operating at a loss during much of LeBron's tenure since his 2014 return, according to Kurt Badenhausen of Forbes.
The Golden State Warriors could also be facing a record-setting tax bill in the years to come. Kevin Durant is widely expected to sign a new max deal in Golden State that could pay him more than $40 million a year on average. Klay Thompson is due for a new contract in 2019, while Draymond Green will follow suit one year later. The price for titles is going to become astronomical for Golden State in the near future.
Even the richest NBA owners may have trouble footing some of these massive bills. It's unclear whether the Warriors or the Cavs are among the teams that pushed for this reform, but the NBA is in its best-ever financial place. Increasing the credit flow will serve to keep things running smoothly.
