"The New Forbes Book is Here!"

[shrink]

http://www.forbes.com/lists/2009/32/bas ... ncome.html

Mimmesota Timberwolves

#27 Franchise Value of $268 mil, above the NOH, MEM, MIL

#28 in decline (11%), tieing WAS, and ahead of the MEM, SAC (13%)

#25-26 in Revenues ($96 mil), tieing CHA, and ahead of NOH, NJN, MIL and MEM

#23 in Operating Income (loss) -$6.8, better than MEM, MIL, NJN, CHA. IND, DAL, POR

Good debt value/arena debt (10th)

[Slum_Dillinger]

This is like christmas for you isnt it?

[deeney0]

Flat tax ftw

[Krapinsky]

Is this going to be another thread about how the Hornets are going to give us Chris Paul for a sack of nickels and Sasha Pavlovic?

[shrink]

Is this going to be another thread about how the Hornets are going to give us Chris Paul for a sack of nickels and Sasha Pavlovic?

Well, $1.1 billion nickels would be a pretty big sack ...

[John Doe [MIN]]

Can you explain 'operating income' to me? Somehow, New Orleans has a higher score than Orlando, Detroit is 3rd highest in the league, Philadelphia and OKC are high up on the list with Dallas and Portland all the way at the bottom... It all seems kind of random.

[shrink]

Can you explain 'operating income' to me? Somehow, New Orleans has a higher score than Orlando, Detroit is 3rd highest in the league, Philadelphia and OKC are high up on the list with Dallas and Portland all the way at the bottom... It all seems kind of random.

I wish they defined it better, but I imagine its all revenues (ticket sales, merchandise, concessions, parking minus expensises, like salaries for player and staff. I suspect losses from the arena are not included. I also suspect this is information from the 2008-09 season -- the NBA year running July 1 through June 30.

Here's some information on probably the biggest expense (player salaries) and revenue (attendance), and I''ll insert more information I have from other sources as I wave my hands trying to explain the differences for the teams you mentioned.

http://www.storytellerscontracts.info/r ... laries.htm

http://sports.espn.go.com/nba/attendance?year=2009

New Orleans barely broke even, with several near sell-outs and extra play-off games at the end of the season. Bad news this year, with horrible attendance, little chance for extra play-off games, and a new payroll that takes them over the lux. Orlando is $2 mil behind in profit, but paid about $11 mil last season for being over the lux. DET was #1 in attendance and tickets sold last season, and despite being in a small market, OKC's franchise is so new that a lot of people buy tickets to see their games (#11 in attendance). Philly is the 4th biggest market in the US, and teams don't have to share revenues for local broadcasts (within 70 miles). Dallas was $20+ mil over the lux, and the Darius Miles decision cost Paul Allen about $17 mil. POR also suffers from the fact that while they sold a lot of tickets, they were #28 in yield/ticket.

One of the things I'd point out though is how closely packed the majority of teams are. We have mutli-million dollar salaries for players, but its only a few million that sperate many teams. I think most of you probably roll your eyes at me when I say that NOH can't afford a payroll that should amount to $70 mil in losses the next two years. Look where $70 mil puts them on the table! I mention a deal with HOU that will save them $15 mil .. that savings would be half the teams total annual profit! MEM is just going to match any offer for Gay? Even is that made them the biggest loser financially in the NBA?

My point is that owners are running on very narrow profit margins -- if they make a profit at all. Granted some would be OK breaking even if they see a rise in the value of their asset (franchise), but only 5 teams in the NBA had an increase, and the buyers are disappearing. We like to focus on the talent because its the fun part we get to watch, but I think this data shows that owners have to be very careful balancing revenues and expenses.

[shrink]

I'd also point out that big market teams make a lot of money. The three biggest markets, LAL, CHI, and NYK, are in the Top 5, despite extremely different levels of success. With so many potential customers, and generally a more inflated local economy, people in big cities will pay high prices to see an NBA game, even if the team isn't good.

Things are getting worse too. Yesterday the Lakers casually offered Pau Gasol a three-year extension at over $21 mil/year (double it, because they'll surely stay over the lux) and then said they were going to try to give Kobe an extension (he makes $24 mil next season). The Lakers can afford to do this, since they make about 5 times as much as the Wolves do for every single home game, and local TV revenues are probably through the roof. I think that if the next Collective Bargaining Agreement doesn't contain a dramatic increase in revenue sharing, we're going to see small market teams struggle to retain their stars, and be little more than KC Royal-like farm teams for the big players.

[Esohny]

The next CBA should be interesting for a number of reasons. Revenue sharing, cap level, lux level, player buyouts...