Its always something about luxury tax and all that crap, what i wanna know is how do these owners get money. If they only get it from ticket prices, then their constantly losing money. So someone tell me how owners make money.
That's sort of what I thought. Isn't baseball trying to get a system like that, where the whole association pays everyone. I guess the owners could spend money and get money back so they wouldn't lose much. I'm just guessing this as well. If all else falls, I'm sure most of the owners still have something else to get money. Isn't Cuban like an internet dude trader thingamajig? (sp?)
Most NBA owners don't make money off of their teams. They would like to win; however, they want to lose as little money as possible doing so. Most have successful business interests outside of sports that allowed them to enter the ownership arena, such as Cuban with Broadcast.com or Rich DeVos with Amway. As such, they can afford to spend some money on their teams, but unless they are truly devoted to winning, they aren't going to blow their finances.
TV rights, merchandise, tickets. I'd bet that there are quite a few profitable NBA teams out there, for example I'm pretty sure that the Lakers operate at a profit. But then, there are many owners who are rich beyond rich, so losses don't matter (Paul Allen, for example) and for whom the teams are just toys to play with and tools for self-marketing and ego-stroking (Cuban, I'm pointing in your direction...)
Television revenues and merchandise sales get split between teams.The teams each received approx 4o million each during season 2000/ 2001. Ticket sales at the gate make up the balance of revenues. The last year the Lakers were in the Forum they made a net profit of 8 million=a very poor margin. I'm sure they are doing better since moving to Staples. The following teams have mega wealthy owners: NY Knicks-Cable vision Detroit Seattle -Starbucks Portland- PAul Allen-Microsoft co - founder Lakers-Micky Aronson The Rockets owner is middle class in this group. Most all the teams cannot help but make a profit. The following variables will affect this: Arena income-Rockets will soon improve Attendance Payroll With the collective bargaining agreement in place, the salary cap is tied to Television contract revenue- if you can stay withing the cap and avoid the luxury tax the team should be ok-I think the tax revenues get split between teams I could be wrong about the specifics and details
Some teams make money, some teams loose money. What remains consistant however is that all franchises appreciate in value with time. So even if your franchise looses 10 mil a year for 10 years, if its a popular franchise and a sucessfull one you can easily double or triple++ your investment if you decide to sell the franchise some years after buying it. I may be wrong, but Im unaware of any franchise being sold for less than it was bought for. ps: For the Knicks, Cablevision is huge, but about a month ago their stock was utterly taking it up the Wazoo, which is great news for any sports fan outside of New York. Im not sure how they've been doing since.
Most NBA teams MAKE money. The only variale for each team is ticket sales and regional broadcasting rights. All national TV, merchandise and marketing $$ is pooled by the NBA and split evenly between all 29 teams. Last year, each team received about $40 million from the league and the rest was up to them. For the 2000-01 season - the average GROSS income was $86 million and the average PROFIT was $5 million. That year, the Houston Rockets grossed approximately $81 million and made a profit of about $3.8 million. Portland, Dallas and New Jersey "lost" a combined $55 million in 2000-01, but those losses are tax write offs to their megawealthy owners - otherwise the average NBA team net profit would be closer to $8 million. The NBA's collective bargaining agreement (CBA) is a great thing. Salaries are tied to a % of revenues. The cap is set at 48% of revenues and it was agreed to between the owners and players that 55% is the maximum that player salaries can be. Anything over 55% is given back to the teams and if salaries hit 61% then the luxury tax kicks in to punish the biggest spending teams. Take away the contracts of Shawn Kemp, Juwon Howard, Scottie Pippen and Karl Malone - and there would be no luxury tax on the upcoming season. It's a shame that almost all contracts are fully guaranteed - otherwise there would be no problems at all. Seriously - I've done the math and the whole luxury tax issue could have been avoided if the new TV deal (which Stern helped to write!!) didn't drop over $100 mil from last season. My estimate has the tax overage being about $70 mil in total - less than the income of the 4 overpaid players I listed above.
