Some NBA Teams Still Losing Money?

 
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Aeneas Hunter
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PostPosted: Tue Sep 19, 2017 7:25 am    Post subject: Some NBA Teams Still Losing Money?

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The nine teams that lost money, by the league's accounting for net income (which includes revenue sharing and luxury tax payments), were the Atlanta Hawks, Brooklyn Nets, Cleveland Cavaliers, Detroit Pistons, Memphis Grizzlies, Milwaukee Bucks, Orlando Magic, San Antonio Spurs and Washington Wizards. Sources pointed out that by a different accounting measure the league tabulates -- operating income, which discards various debt obligations -- only 10 teams (rather than 14) lost money before accounting for revenue sharing.


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In the wake of Kobe Bryant's retirement, the Lakers were devoid of a star player attraction last season for the first time in two decades. To retain their protected draft pick, they tanked the second half of the season, their fourth straight with 27 or fewer wins.

But it was a wonderful season financially. The Lakers finished with a gargantuan $115 million profit as measured by net income even after writing a revenue-sharing check for almost $49 million, according to league accounting. That was the highest net income in the league by nearly $25 million. The biggest factor was the $149 million they took in from massive local media rights deals, primarily with Time Warner.


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Some owners have argued that teams should share enough that all 30 finish in the black. Paul Allen, the owner of the Blazers and the NFL's Seattle Seahawks and one of the world's richest people, is among the loudest voices urging more robust revenue-sharing, sources say. One owner even pitched the idea at a recent meeting of the Board of Governors session in Las Vegas that all teams should be guaranteed $20 million in profit, sources said.

There will be pushback to those ideas.

"This is a club where everyone knows the rules when they buy in," one owner told ESPN.com.

Some have even floated the idea of shrinking the amount a team can receive in revenue sharing if it has taken in such payments for several consecutive years, sources say.


http://www.espn.com/nba/story/_/id/20747413/a-confidential-report-shows-nearly-half-nba-lost-money-last-season-now-what
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governator
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PostPosted: Tue Sep 19, 2017 7:53 am    Post subject: Re: Some NBA Teams Still Losing Money?

Aeneas Hunter wrote:
Quote:
The nine teams that lost money, by the league's accounting for net income (which includes revenue sharing and luxury tax payments), were the Atlanta Hawks, Brooklyn Nets, Cleveland Cavaliers, Detroit Pistons, Memphis Grizzlies, Milwaukee Bucks, Orlando Magic, San Antonio Spurs and Washington Wizards. Sources pointed out that by a different accounting measure the league tabulates -- operating income, which discards various debt obligations -- only 10 teams (rather than 14) lost money before accounting for revenue sharing.


Quote:
In the wake of Kobe Bryant's retirement, the Lakers were devoid of a star player attraction last season for the first time in two decades. To retain their protected draft pick, they tanked the second half of the season, their fourth straight with 27 or fewer wins.

But it was a wonderful season financially. The Lakers finished with a gargantuan $115 million profit as measured by net income even after writing a revenue-sharing check for almost $49 million, according to league accounting. That was the highest net income in the league by nearly $25 million. The biggest factor was the $149 million they took in from massive local media rights deals, primarily with Time Warner.


Quote:
Some owners have argued that teams should share enough that all 30 finish in the black. Paul Allen, the owner of the Blazers and the NFL's Seattle Seahawks and one of the world's richest people, is among the loudest voices urging more robust revenue-sharing, sources say. One owner even pitched the idea at a recent meeting of the Board of Governors session in Las Vegas that all teams should be guaranteed $20 million in profit, sources said.

There will be pushback to those ideas.

"This is a club where everyone knows the rules when they buy in," one owner told ESPN.com.

Some have even floated the idea of shrinking the amount a team can receive in revenue sharing if it has taken in such payments for several consecutive years, sources say.


http://www.espn.com/nba/story/_/id/20747413/a-confidential-report-shows-nearly-half-nba-lost-money-last-season-now-what


guarantee profit? insane
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PostPosted: Tue Sep 19, 2017 8:14 am    Post subject:

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PostPosted: Tue Sep 19, 2017 8:23 am    Post subject:

Without those teams there isn't a league. Paraphrasing Dr. Buss.
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Aeneas Hunter
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PostPosted: Tue Sep 19, 2017 8:43 am    Post subject:

I am skeptical of any accounting numbers from NBA teams, or for that matter from any business that has an incentive to depress its profits. Having said that, there is an interesting premise in this article. Total league revenues are booming due to the TV contract, but there is also a secondary boom in local revenues in selected markets. The salary cap number is based on average revenues, which include the local revenues from the selected markets. Because of the great disparity in local revenues, some teams are struggling to turn a profit in a market based on the salary cap number.

That's plausible, though I remain skeptical of the claim that so many teams are losing money. Still, I can definitely see how this could provide the impetus for expansion. The league would be able to score a pretty big expansion fee right now, and none of that goes to the players.
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lakersken80
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PostPosted: Tue Sep 19, 2017 10:56 am    Post subject:

Small market teams always complaining as usual. Last time I saw the Cavs had the highest league payroll. So they want to be highly profitable and be highly competitive as well? Not really a shocker that bad teams are the most profitable since they spend the least on payroll....but thats because they are rebuilding as well.
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Aeneas Hunter
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PostPosted: Tue Sep 19, 2017 11:31 am    Post subject:

The Cavs are actually profitable. It's the revenue sharing (probably via luxury tax) that puts them into the red. Ironic, eh?

Anyway, from looking at these numbers, what jumps out is that the Nets are still a basket case franchise even after all the changes. They were losing money in about the same range before the new CBA and before the new TV contract. It's hard to imagine how a team can be losing that much money while playing in Brooklyn with a no-name roster.

It surprises me that the Pistons are losing money in the same order of magnitude. Yeah, it's Detroit, but you have to wonder whether that franchise is sustainable there. At least the Nets have a potentially big upside in Brooklyn, if they ever get it together. Detroit has a low ceiling.
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PostPosted: Wed Sep 20, 2017 6:27 pm    Post subject:

Aeneas Hunter wrote:

Anyway, from looking at these numbers, what jumps out is that the Nets are still a basket case franchise even after all the changes. They were losing money in about the same range before the new CBA and before the new TV contract. It's hard to imagine how a team can be losing that much money while playing in Brooklyn with a no-name roster.


The nets are a special case though, the main part of building that stadium was to get the approval to gentrify a giant swathe of Brooklyn, he's made hundreds of millions from that.

And since it was all about real estate, it's accounting values are horse (bleep), I just pushed through a sale where the accounting valuation was less than 1/4 the sale price for example.
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Aeneas Hunter
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PostPosted: Wed Sep 20, 2017 7:13 pm    Post subject:

Telleris wrote:
Aeneas Hunter wrote:

Anyway, from looking at these numbers, what jumps out is that the Nets are still a basket case franchise even after all the changes. They were losing money in about the same range before the new CBA and before the new TV contract. It's hard to imagine how a team can be losing that much money while playing in Brooklyn with a no-name roster.


The nets are a special case though, the main part of building that stadium was to get the approval to gentrify a giant swathe of Brooklyn, he's made hundreds of millions from that.

And since it was all about real estate, it's accounting values are horse (bleep), I just pushed through a sale where the accounting valuation was less than 1/4 the sale price for example.


That was the prior owner, Ratner. You are absolutely right about his motivation to move the Nets to Brooklyn. Then he sold the team to Prokhorov, so Ratner came out just great. Prokhorov did get a piece of the arena, but I don't think he got a piece of the larger real estate development.
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