The days when Fred Hoiberg walks into an NBA facility as head coach for the first time with a five-year contract and $ 25 million guaranteed in his bank account are probably over.
According to several NBA executives, the whole league is about to feel a historic economic crisis when and if the Orlando bubble holds up and this season is able to end, and this will start with the salaries for the first NBA coaches.
An executive told the Sun-Times that he expects annual wages to be halved for new coaches, no matter how good the resume is.
So while five years, the $ 25 million deals were being distributed left and right four or five years ago, they are expecting deals that are now over the three year period, $ 7.5 million.
Which teams could benefit most?
Bulls may be high on the list.
With the rest of Hoiberg’s compensated salary out of the books when the season ends, the Bulls still have the salary of Jim Boylen and his staff to pay for the next few years. However, with Boylen one of the league’s highest paid coaches at around $ 1.6 million a year, switching to him and adding $ 2.5 million to the next head coach still costs the team just over $ 4 million for that chair. coaching each of the next two seasons.
Looking ahead, San Antonio pays Gregg Popovich $ 11 million a season, while Doc Rivers receives $ 10 million a year from the Clippers.
President Jerry Reinsdorf has allowed former general manager Gar Forman to launch a much larger investment on the Hoiberg road without question.
So there is a precedent out there for Reinsdorf.
The problem is that these are unprecedented times.
The tweet heard across GM by Houston Rockets’ GM Daryl Morey is expected to cost the league $ 400 million in revenue, according to NBA Commissioner Adam Silver. And this before the championship was closed by the coronavirus in March.
With the reboot coming forward in Orlando, although the championship comes at the end of the season – a great though – experts are guessing that between China and the closing of March, the wage limit could drop by $ 8 million per team when the 2020-21 seasonal tips.
To put it in perspective, the NBA has seen the cap drop only twice in the past 35 years, and both times have been slight dips. This would be a historic cut to the limit.
The league has set the limit at $ 109.1 million for this season, and initially expected it to rise to at least $ 115 million for next year. Now, it could be a $ 101 million salary limit, with the league forced to make some exceptions in the luxury tax, as teams hurry to figure out how to account for a $ 14 million swing.
The news won’t improve next season either, especially if the 2020-21 season is to be played without fans in the arena. Yes, television brings the day for NBA money, but the gate’s revenue averages about $ 2 million in regular season’s home game.
Do the math in an 82-game season and the heavily touted 2021 free agent class may be looking for a salary limit of less than $ 100 million per team.
Good luck.
How can it hurt bulls? Not as much as most of the league. Yes, while bulls were a bad product to look at during much of this reconstruction, they were also economically flexible. Their limit is $ 106 million for next season, but they have lost at least $ 38.2 million next season with Otto Porter Jr., Cristiano Felicio and Luke Kornet coming out of the books.
So while there will be many tears around the Association soon, the Bulls – valued at $ 3.2 billion earlier this season – should have the least amount of tears.
