The NBA is set to increase its team debt limit from $325 million to $475 million, marking the first adjustment since 2018. According to a report by Kurt Badenhausen of Sportico, the league submitted the proposal to its Board of Governors, with a voting deadline of Monday evening.

Sources close to the matter revealed that the proposal is expected to pass easily. However, additional steps will be required before teams can access the extra $150 million in borrowing capacity. The move reflects the league’s efforts to provide franchises with greater financial flexibility in the evolving sports landscape.

The decision comes at a time when the NBA faces declining viewership, which could influence revenue streams tied to media rights and sponsorships. Ratings for games across major platforms like ABC, ESPN, TNT, and NBA TV have dropped 25% through December 2024, according to Sports Media Watch.

Observers attribute the decline to various factors, including the league’s heavy reliance on three-point shooting and perceived lack of defensive intensity. Additionally, players resting more frequently and less competitive regular seasons have contributed to a waning interest among fans.

ESPN reported a significant 28% drop in ratings through November 2024, while TNT experienced a smaller 3% decline. The highly anticipated matchup between the Cleveland Cavaliers and Boston Celtics provided a slight boost for TNT, but overall trends remain concerning.

The additional borrowing capacity is likely to benefit smaller-market teams that often face difficulties in generating revenue comparable to their larger-market counterparts. It could also support teams dealing with increased player salaries and operational costs in an inflationary environment.