Economic hits are coming to the NBA, but Bulls shouldn’t be crying broke

The days of a Fred Hoiberg strolling into an NBA facility as a first-time head coach with five years on his contract and $25 million guaranteed in his bank account are likely over.

According to several NBA executives, the entire league is about to feel a historic economic crunch when and if the Orlando bubble holds and this season is able to wrap up, and that will start with the salaries for first-time NBA coaches.

One executive told the Sun-Times that he expects the yearly salaries to be cut in half for new head coaches, no matter how good the coaching resume looks.

So while five-year, $25 million deals were being handed out left and right four or five years ago, expect deals that now are more in the three-year, $7.5 million range.

Which teams could most benefit from this?

The Bulls might be at the top of the list.

With the remainder of Hoiberg’s offset salary off the books when the season ends, the Bulls still have the salary of Jim Boylen and his staff to pay out the next few years. However, with Boylen one of the lowest-paid coaches in the league at about $1.6 million per year, moving on from him and adding $2.5 million for the next head coach is still costing the team just over $4 million for that head coaching chair each of the next two seasons.

To put that in perspective, San Antonio is paying Gregg Popovich $11 million per season, while Doc Rivers is getting $10 million per year from the Clippers.

Chairman Jerry Reinsdorf allowed former general manager Gar Forman to throw a much bigger investment Hoiberg’s way, no questions asked.

So there is a precedent out there for Reinsdorf.

The problem is these are unprecedented times.

The tweet heard all around China from Houston Rockets GM Daryl Morey is expected to cost the league $400 million in revenue, according to NBA commissioner Adam Silver. And that was before the league was shut down by the coronavirus in March.

With the restart moving forward in Orlando, even if the league gets a finish to the season — a big if still – experts are guessing that between China and the March shutdown, the salary cap could drop by $8 million per team when the 2020-21 season tips off.

To put that in perspective, over the last 35 years the NBA has seen the cap drop just twice, and both times were minor dips. This would be a historic cut in cap.

The league set the cap at $109.1 million for this season, and originally expected it to go up to at least $115 million for next year. Now, it could be a $101 million salary cap, with the league forced to make some exceptions in the luxury tax, as teams scramble to figure out how to account for a $14 million swing.

The news won’t get any better next season, either, especially if the 2020-21 season has to be played without fans in the arena. Yes, television carries the day for NBA money, but gate receipts average about $2 million in revenue per regular season home game.

Do the math over an 82-game season, and the highly-touted 2021 free agent class could be looking at trying to squeeze into a salary cap of under $100 million per team.

Good luck.

How does that hurt the Bulls? Not as much as most of the league. Yes, while the Bulls have been a bad product to watch throughout most of this rebuild, they’ve also been economically flexible. Their cap is at $106 million for next season, but they shed at least $38.2 million next offseason with Otto Porter Jr., Cristiano Felicio and Luke Kornet coming off the books.

So while there’s going to be a lot of crying broke around the Association soon, the Bulls – valued at $3.2 billion at the start of this season — should have the fewest tears.