[Dead Spin] How (And Why) An NBA Team Makes A $7M Profit Look Like a $28M Loss

I think you guys would find it interesting to open up the new jersey books provided by deadspin. The cost associated with amortizing the team is interesting. like a real estate asset, it is depreciating while your asset supposedly is appreciating. unlike normal depreciation on a piece of equipment that will have to be replaced soon. the owners' value is in the appreciation of an asset, see drayton mcclane making what $400MM over 15-20 years, nice return. however the organization does have to make up the losses, and of course, the right down of the asset is a paper expense.

however, not all teams have been recently sold as the espn article states so you can't extrapolate that through the whole league. loan amortization is a cash flow issue. looking at new jersey's statements, the owners were making contributions in those years, which counted as net financing cash flow. i admit i didn't have the paitience to read through the finance section of the balance sheet. However in the cash flow statements there is a lot of movement between all their credit facilities. bottom line, they claim cash from operations losses that have to made up on financing.

but here is where sports franchises have cleaned up in the last 25 years, i don't even see a rent charge on the income statement. :confused

edit: arena lease is off balance sheet item looks like or is included in intangibles

 

from the notes, not all of the intagible is amortized over time. "long-lived" intangibles are reviewed for impairment.

okay, it does look like players contracts are double counted, the players contract is part of intangibles that are amortized. the franchise is the "long lived" asset. and the player's contract is an expense. it is confusing.

 

the league issues the team a loan to help repay obligations from its purchase. looks like that loan was paid and traditional borrowings were made