Blog Entry

NBA: We lost money in every year of last CBA

Posted on: July 5, 2011 11:19 pm
Edited on: July 5, 2011 11:24 pm
The National Basketball Association has released new specifics about its financial struggles. Posted by Ben Golliver. lockout

On Tuesday, we noted a New York Times analysis of the National Basketball Association's finances which concluded that data collected by Forbes makes it seem that perhaps the league isn't in as dire a shape as it claims to be.

Later Tuesday, the Times printed a statement from the NBA which said the figures used "do not reflect reality" and shed new light on the league's financial struggles.

The statement, attributed to spokesman Tim Frank, said the NBA has incurred "substantial and indisputable losses" and reiterated that the league's books have been shared with the National Basketball Players Association. 

Here are a few choice cuts.
The N.B.A. and its teams shared their complete league and team audited financials as well as our state and Federal tax returns with the Players Union. Those financials demonstrate the substantial and indisputable losses the league has incurred over the past several years. 

The league lost money every year of the just expiring CBA. During these years, the league has never had positive Net Income, EBITDA or Operating Income.

Ticket revenues have increased 12% over the 10 year period, not the 22% reported.

In 2009-10, 23 teams had net income losses. The losses were in no way "small" as 11 teams lost more than $20M each on a net income basis ... Our net loss for that year, including the gains from the seven profitable teams, was -$340 million. 
As of yet, the NBA has not made its books available to independent media analysis. Its claims are therefore unverifiable. There will be skeptics until (if?) that last step is ever completed. 

Just because they are unverifiable, however, doesn't necessarily mean they are totally unreliable. What the NBA is admitting too here is pretty striking. Year after year of losses. A plurality of teams losing money. A third of the league's teams losing lots of money. All this despite rising ticket revenues and a solid television deal.

Given all of this new math, solely blaming the players, whose salaries are tied to Basketball-Related Income, simply doesn't add up. Increasing transparency as the league has seems only to only increase the questions the owners should be asking of each other.

Here's three questions for starters. To what degree do they need to protect themselves from themselves when it comes to spending on player salaries? How much does revenue sharing need to increase? How serious are they, really, about a hard cap system?  Those are big, hard questions that will eventually require sacrifices and compromises from someone.

Since: Sep 5, 2006
Posted on: July 6, 2011 2:37 pm

NBA: We lost money in every year of last CBA

Big Stack - thank you for having a brain and using it. How refreshing to see your post instead of the standard "those greedy players can stay on strike all year for all I care!" nonsense. Yes, the owners are to blame. They want a system that will assure they can't mangle their own finances, no matter how stubborn and stupid they are. Should players like Arenas and Lewis decline the $100 million they were offered by owners? Did the absurdly useless Jerome James give himself $30 million while the owner was tied up in a closet somewhere? And I suppose it's the players' fault that the commissioner stupidly and greedily flooded the sport with crappy teams in crappy markets. This is a league that gave Shawn "Krispy Kreme Baby Daddy" Kemp $98 million after the lockout of 1998, so who is really to blame here? The owners raved about the last CBA. You know, the one they say is killing them now. So, too, did the puppet lap-dog commissioner. I don't dispute that some teams are losing money - although the reverse-Enron ways they keep their books are transparent and deeply flawed - but a lot of those losses can be corrected with a revenue sharing plan that wasn't written by a toddler with a half-eaten crayon. Instead, the league wants the players to foot the entire bill. The owners are counting on Meathead Nation to rise up and blame this whole mess on greedy players, but I don't buy it.

Since: Jul 25, 2010
Posted on: July 6, 2011 10:40 am

NBA: We lost money in every year of last CBA

People forget about how happy the owners were after the last CBA. They got almost everything they wanted! They again are the issue not the players. Players don't pay themselves, don't offer contracts to themselves, don't draft themselves and can't trade themselves. Manage your business better and maybe you would have fewer problems!

Since: Mar 15, 2011
Posted on: July 6, 2011 6:33 am

"Lost" money

these paper losses are a bunch of BS---hopefully, the union lawyers don't believe any of this.  The greedy owners are trying to make up stories about losses to hose the players and cut their salaries---the players need to hold out until they get all the money they want.

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