This question has puzzled me for a long time. A NBA team has to spend at least 30-40 millions a year on players' salary, couple more millions on coaches and other stuff. However, the ticket price is not that high and I am not sure whether they can earn enough money back from selling the tickets. Plus, many teams do not have too many fans going to the stadium. Of course they might get something back from selling souvenirs, T-shirts, TV broadcasting, etc. But, still, do you think any current NBA team is making profit now? How about the Rockets? I hope I wouldn't upset too many people because of my ignorance on this issue, but once again, we are at the moment that most of the fans are happy with our team performance recently¡_..
i don't think you realize that this is a multimillion dollar business going on. look at Mark Cuban and Bob Johnson, owners of the Mavs and (soon to be)Bobcats. those guys are billioniares, and they are definitely not hurting for profit.
Most of the money is made in broadcasting rights. Trust me.....they don't buy these teams for the fun of it (Maybe Cuban did....but he's still making lots of bank).
Radio/TV deals Concessions REVENUE SHARING (pay attention MLB) SALARY CAP LUXURY TAX (on teams that want to tip the wages: revenue balance over 55%) licences for clothing plus - they only have 15 players per team (with the IR) - and they (if the ave tix are $35 a pop - with ave. attendance of 17.5K per game =612K per game & 25 million for 41 home games) and that is just tickets
oh yeah ! and even if they don't make a profit - all owners with new arenas stand to cash out when they sell their teams for 10x what they paid
base team revenue = average attendance x average tick price x number of home games. layer in TV revenue from ch51. layer in NBA shared TV revenue form TNT, ESPN and others. Those are the key items I think. One of the most profitable teams in NBA is Bulls. Long forgotten is that after Jordan retired and they dumped nearly all vets and brought in rookie coach to boot - they continue to sell out. They have been a cash machine since that time. The other way that teams make money is by appreciation of value of the underlying asset. Difference between what Cuban paid for Mavs and what Mavs are worth today is a fortune. We often complain about what players are making - owners are making much much more. over and out.
Consider, if a team had a $50 million payroll. To pay for that over 41 games, they'd need to pull in 1.2 million per game. If 15,000 fans show up, that's $81 each. And though they have some seats for $13, they also have others for $200. Plus, the suites, etc. Obviously, I'm not counting other significant costs they have in overhead on running the team, and running the events. But, that's not even going into concessions ($6 beers), merchandising, broadcasting, etc, etc. I know there were many teams running in the red a couple of years ago, but it doesn't really strike me as an unprofitable business. According to Hoovers (http://www.hoovers.com/houston-rockets/--ID__44427--/free-co-fin-factsheet.xhtml), annual sales (however that is defined) for the Rockets in 2003 were $82 million.
I'd like to know what NBA games you're attending... There's also stadium revenue. That's why Les wanted a new arena, because he was paying rent to Chuck Watson...
here is a webpage about "NBA salary cap FAQ" in http://members.cox.net/lmcoon/salarycap.htm it's very long, I think it could give you some impression about this issue. For example, it explains BRI (salary cap is calculated according to BRI): Basketball Related Income (BRI) includes: Regular season gate receipts Broadcast rights Exhibition game proceeds Playoff gate receipts Novelty, program and concession sales (at the arena and in team-identified stores within a 75-mile radius) Parking Proceeds from team sponsorships Proceeds from team promotions Arena club revenues Proceeds from summer camps Proceeds from non-NBA basketball tournaments Proceeds from mascot and dance team appearances Proceeds from beverage sale rights 40% of proceeds from arena signage 40% of proceeds from luxury suites Proceeds received by Properties, including international television, sponsorships, revenues from NBA Entertainment, the All-Star Game, the McDonald's Championship and other NBA special events. The NBA and Players Union are also working to replace BRI with a new definition of revenues, called Core Basketball Revenues (CBR).
Will someone explain how exactly television stations, national or local, or even specific television shows get money? I understand shows are under contract with the channel, but how do the channels get money? What do Nielsen ratings have to do with getting $$$?
I think the question the thread starter posed is very legitimate. I would like to see some Excel files with NBA teams' business plans. My guess is that some of the teams are wondering the same thing as the thread starter.
Didn't Portland claim to have lost $100m?? And Grizzlies came out with all sorts of different claims as they were justifying the move from Vancouver. Would be really interesting to know the 'real' operating gains or losses for these teams. One thing is certain though: The owners didn't become as mega-rich as they are by investing in losing ventures.
I don't know, but I think if you could see some teams' books, you will see a large chunk of revenue from television, just like the NFL. And conversely, not sharing the television revenue in baseball is what's killing some of those teams financial positions.
Also, it is not in the best interest for most of these owners to turn a profit. For tax purposes, it is better to break even, or post a small (relatively speaking) loss.
Yeah, I never understood why a place like Nashville got a team. I'm not saying Nashville's a bad town, but we all know how Tennesseans are known for hockey. I still don't understand places like Anaheim, San Jose, LI, the Florida teams, Phoenix, Buffalo, and some Canadian teams. They used to be great hockey towns, but why they remained in some of those cities for this long is beyond me. The Nordiques and Whalers franchises were an obvious precurser to what should have come -- more franchise movement. Of course the NHL was and still is too stubborn to move (struggling) Canadian/Northeastern teams to places like Denver and Raleigh (which I don't get). There should be a good deal of franchises in Canada based on tradition, but on the other hand, there should be fewer. Point one - why Calgary??? The Flames were in ATL and moved...to Canada. Weird. Point two - No Canadian team has made it to the Finals since '94. That's just pathetic. Simply another reason why Canada sucks.
