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As they face the reality of a sea of red ink playing in empty or near-empty arenas for the 2020-21 season, some NBA owners are quietly preparing to find cash to weather the storm.

Golden State Warriors owner Joe Lacob has informed fellow owners of a deal he’s considering with Goldman Sachs to raise up to $250 million to manage coming expenses, sources told ESPN. Other owners are investigating opportunities to raise capital as well, ownership sources said, with some pursuing legal action against insurance companies that have denied coronavirus pandemic claims.

Earlier in the summer, NBA commissioner Adam Silver told players that roughly 40% of the league’s revenues come from ticket sales and arena sponsorships as he prepared them for challenges ahead. The league and players’ union are expected to make adjustments to the current collective bargaining agreement before next season.

The Warriors are an outlier, as they derive around 80% of their revenue from Chase Center and can clear more than $5 million for some home games, according to league and team sources. Many teams earn less than $2 million per home date, and some get less than $1 million on average. But unlike some teams, the Warriors haven’t laid off or furloughed any employees. Lacob has also already significantly invested in technology and testing methods in an attempt to safely get fans back into Chase Center sometime next season.

Getting the fresh injection of capital could help the Warriors maintain their large payroll, which is expected to be above $150 million for the next few seasons. They have four players — Stephen Curry, Klay Thompson, Andrew Wiggins and Draymond Green — each scheduled to earn more than $22 million next season. They are assured a top-five draft pick and have a $17 million trade exception available to use.

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“The Warriors have the ability to raise money that a lot of teams can’t,” one team president said. “Good for them. If our team was in that situation, we may have to trade players to deal with it.”

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. Others might offload draft picks.

“I suspect first-round picks will be for sale in this draft,” one team executive said. “We haven’t really seen that in a decade.” The last first-round pick to be sold was in 2013 by the Denver Nuggets (the Utah Jazz selected Rudy Gobert at 27th).

The possible losses have teams looking at other ways to generate money, from the sale of assets, including real estate, or tapping credit facilities. One NBA team, the Minnesota Timberwolves, is already publicly for sale.

“I don’t know what will happen, but I may lose $50 million next season,” one owner told ESPN. “If that happens, I have three options: I could borrow the money, I could sell part of the team or I could do a cash call and me and my partners would have to write checks.”

The Warriors’ case is creating some concerns of a deepening gulf between the have and have-not teams that could affect the league’s short-term future, multiple owners and high-ranking executives said. In different pockets of the NBA, owners are making money moves. Brooklyn Nets owner Joe Tsai recently sold about 25% of his shares of Chinese tech giant Alibaba, stock valued at $3.3 billion as of July 10. He denied rumors he was joining a group to purchase the New York Mets.

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With ballooning payrolls and uncertain revenue, teams are bracing for difficult decisions in the coming months. Kelley L. Cox/USA TODAY Sports

Cleveland Cavaliers owner Dan Gilbert’s Quicken Loans filed for an initial public stock offering in early July. Once the private company’s finances — it had more than $800 million in profit in 2019 — were revealed, it became clear that Gilbert might soon be regarded as one of the wealthiest owners in sports, as his net worth could balloon by tens of billions after the IPO.

LA Clippers owner Steve Ballmer owns more Microsoft shares than Bill Gates, and the tech company recently saw its shares hit a record price, pushing Ballmer’s net worth to more than $70 billion. He has gained $10 billion since the start of the year and recently spent $100 million to buy the Forum in Inglewood, an arena he’s not interested in playing in, so that he could construct a new billion-dollar arena for the Clippers down the street.

With the Clippers having several key free agents in Montrezl Harrell and Marcus Morris Sr., Ballmer’s liquidity and a potential tight market elsewhere makes it clear how all of this could matter.

The Los Angeles Lakers are a family-run company, the controlling ownership held by the six children of the late Dr. Jerry Buss. Though they have billionaire minority owners Philip Anschutz and Patrick Soon-Shiong, the Busses don’t have deep pockets compared to their peers. It’s one of the reasons the Lakers applied for a Paycheck Protection Program (PPP) loan from the government at the outset of the COVID-19 pandemic, though they later returned the $4.6 million they were granted.

The Lakers, however, still likely will have no issues in re-signing star Anthony Davis, as their local television deal brings them around $200 million annually, sources said. Added with their national television share, the Lakers could bring in more than $300 million if they don’t sell a single ticket.

Many other teams aren’t in a similar position.

Houston Rockets owner Tilman Fertitta took out a $300 million loan at more than 10% interest in April to handle the debt service on his hundreds of restaurants, hotels, casinos and the Rockets, whom he bought for $2.2 billion in 2017. His recent purchase of the Rockets franchise, which he wholly owns, at a record price means he is more leveraged than other owners. Fertitta has said recently in multiple interviews that he doesn’t intend to sell any portion of the team to raise money. Brokers who have approached him privately representing bidders have been told the same, sources said.

In July, Fertitta sued the Rockets’ insurance company, Affiliated FM Insurance, because it denied a $400 million claim of its business interruption insurance after the NBA was halted due to the virus. Other teams are reviewing their policies and considering their own legal options, sources said.

Houston owes $119 million to its five highest-paid players — led by $41 million each for Russell Westbrook and James Harden — for next season.

The 2019-20 NBA season resumes on July 30 at Walt Disney World.

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Owners are allowed to borrow $325 million against the equity in their teams. Even though some teams have more than a billion in equity, that rule has long existed to protect teams from being overleveraged. A majority of teams, including the Warriors, have already maxed out that credit, sources said.

There have been some discussions about raising that debt ceiling, sources said, but the NBA just boosted it from $250 million to the current $325 million in 2018.

Indiana Pacers owner Herb Simon has seen his company, mall operator Simon Properties Group, lose more than $25 billion in stock value since January. The Pacers’ payroll for next season is slated to be more than $125 million, highest in team history, and star Victor Oladipo is eligible for a contract extension.

Miami Heat owner Micky Arison has lost $2.5 billion in net worth since March, after his Carnival Cruise Lines Corp. was shuttered. Though the Arison family has a completely different debt portfolio than recent buyers, they bought the team in 1987 for $32.5 million. In 2015, Arison liquidated $433 million in Carnival stock.

The Heat have the second-highest payroll in the NBA this season with several key players such as Goran Dragic, Jae Crowder and Meyers Leonard headed for free agency. While they expect to save cap room to chase free-agent stars like Giannis Antetokounmpo in 2021 and might not extend young All-Star Bam Adebayo this year to help facilitate that plan, their spending for next year could be impacted by these financial factors.

The Oklahoma City Thunder’s ownership, led by Clay Bennett, is largely supported by the energy business, which has taken a financial beating in recent months. After Bennett, the largest stakeholders are the estate of Aubrey McClendon, whose shares have been for sale for more than a year, and George Kaiser, a banking and energy magnate who has lost more than $2 billion in net worth since last year. One of its primary sponsors, Chesapeake Energy, filed for bankruptcy in June.

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The Thunder have the third-highest payroll in the league with key player Danilo Gallinari headed to free agency. All-Star point guard Chris Paul is scheduled to make $41 million next season, set to be the second-highest salary in the NBA.

All owners, many of whom run hedge funds or are in private equity, are impacted in some way by the virus, as markets have fluctuated over the last five months. There is also uncertainty about how a deal with the players will pan out; with the current 50-50 revenue split, the players are contractually obligated to share the losses with owners by giving back money from their contracts.

Getting a clear picture of what will happen in October, when the NBA’s offseason is expected to commence, is a challenge. But the signs already point to hard decisions coming and possible player movement to handle the money challenges.

“With few exceptions, no one wants to make long-term commitments right now,” one general manager said. “You can already feel it coming.”

ESPN’s Ramona Shelburne contributed to this story.

Note: An earlier version of this story incorrectly stated that the Rockets reached their $325 million debt limit.

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