The NBA Just Made a Major Announcement (And It’s Not The Good Kind)

The NBA isn’t immune to financial woes, despite breaking attendance records this season.

The NBA announced via internal memo that it will be cutting on expenses and hiring until October, according to a report by the New York Times.

The memo, sent by Kyle Cavanaugh, NBA President, Administration, cited “economic headwinds” as the reason for the league’s decision. The league said this cutback will remain for the rest of the fiscal year, which lasts until October, near the time the 2023-24 NBA regular season tips off.

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Major companies have been vulnerable to hiring freezes and layoffs in recent months, including Walt Disney -  (DIS) - Get Free Report, parent company to ESPN, one of the NBA’s lead broadcast partners. The NFL also recently cut down on staffing.

However, the timing of the NBA’s announcement still comes at a surprising time. The NBA just announced on Monday that it achieved record highs for attendance and sellouts for the 2022-23 regular season. The league welcomed 22.3 million fans into arenas this season, eclipsing its previous mark of 22.1 million. It achieved 97% capacity in arenas for the full year.

Last week, the league also reached an agreement with the NBA Players Association on a new collective bargaining agreement, effectively ensuring that there will be no stoppage of games, which last happened to the league during the 2011 lockout. The MLB was the last major sports league to experience game stoppage due to labor disputes and that was during the start of last season.

The NBA also reportedly made $10 billion in revenue during the 2021-22 season, which was a record high. The value of each NBA franchise has continued to rise. In February, Matt Ishbia bought the Phoenix Suns for a league record $4 billion from the controversial Robert Sarver. A few weeks later, a portion of the Milwaukee Bucks was purchased by Cleveland Browns owners Jimmy and Dee Haslam, valuing the small market franchise at $3.5 billion.