coldfish wrote: TheSuzerain wrote:
Betta Bulleavit wrote:OMG. Please tell me that you don’t truly believe that. Answer this question for me. How many franchises are owned by poor people? Second question. How many are owned by billionaires or billionaire groups? Last question, did any of those billionaires become such by accident? Every owner is looking to make money. All of them. Period. If they weren’t, they wouldn’t be wasting their time. Billionaires don’t operate to lose money. They operate to make it. It’s jist that simple. Very black and white.
All owners grow richer due to the escalating value of their equity in the franchise.
But there are definitely owners who are in the red in terms of cashflow/yearly profits.
For some of the uber-rich, the NBA team itself is the luxury asset and is not a source of cashflow.
If you are an uber rich guy, you don't need billions of dollars every year to live. With that said, most rich guys want to be richer.
So, how does your typical rich guy accomplish this? Pay themselves a nominal salary to cover their own expenses either through their sports team or other interests. Then they want NO money coming to them directly. The tax on profit going to an owner is absurd because the business pays tax on it and then the owner pays tax on it as income.
Effectively, a rich guy would far and away rather increase the value of his sports team by $100m than to get $100m in profit in his pocket. The former is only taxed at capital gains at a time of his choosing. The latter gets double taxed immediately. This gives them a pretty big incentive to plow profits back into the company to grow it. They want to *show* no profit with significant revenue growth, in effect.
it all becomes income eventually when the team is sold, though, right? it's not like the owner can dip into the team funds for personal use so that he gets the personal benefit of the revenue w/o paying the income tax. re-investing is better than taking the income and sitting on it, but it's also just postponing the inevitable, which is even MORE income to be taxed
as for the general discussion, it's pretty obvious that $$$ is the primary motivation of the bulls organization. which is to be expected with an ownership group. it's probably the primary motivation for almost every sports organization. finishing second every year is a nonsensical objective, however. if you're good enough to finish 2nd, you're good enough to finish first. and obviously after winning a title the fans don't say to themselves "that was fun! now that my basketball team has gotten to the mountaintop, I think i'll move on to other entertainment options" no, they come back the next season and hope to watch their team win it all again. what IS good business strategy is to maintain hope within the fanbase regardless of whether the team actually has a strong chance of winning it all. spending enough to maintain the fanbase but no more than necessary