Financial losses for NBA teams may lead to trades, impact free agency

Sam Amico

The majority of NBA teams have already maxed out a credit of $325 million owners were allowed to borrow against the equity in their teams, according to Brian Windhorst of ESPN.

The Golden State Warriors and Houston Rockets were identified as two of the teams that have maxed out the credit.

The NBA set the credit limit to protect teams from being overleveraged, per Windhorst, raising it from $25 million in 2018. As Windhorst relayed, there has been some talk of again boosting the credit limit, likely because of circumstances created by the coronavirus pandemic.

"As they face what some expect to be tens of millions per franchise in losses next season, some teams might have to slash payroll, perhaps trading players or electing not to aggressively pursue free agents," Windhorst wrote. "Others might offload draft picks."