There are two NBA publications that I eagerly await each season. The first is the GM Survey. The second is Forbes.com’s Business of Basketball. Despite four-straight sub .500 seasons, the New York Knicks are ranked as the NBA’s most valuable team for the fourth straight year. The Knicks took in $208 million dollars in revenue last season — $17 million more than the Los Angeles Lakers.
Here is Forbes.com’s top ten:
As you can see, the Chicago Bulls posted the largest operating profit of $55.4 million, while the Dallas Mavericks were the only team in the top ten to post an operating loss. The Mavericks weren’t alone. The Miami Heat (-1.1), Portland Trail Blazers (-0.9), Denver Nuggets (-26.3), Indiana Pacers (-6.5), Minnesota Timberwolves (-5.7), New Jersey Nets (-0.9), Memphis Grizzlies (-3.2), Charlotte Bobcats (-4.9), and Oklahoma City Thunder (-9.4) also posted operating losses. A third of the NBA’s teams lost money, and yet according to Forbes:
League-wide revenues hit a record $3.8 billion during the 2007-08 season, 6% more than the prior campaign, and the average team posted a profit (in the sense of earnings before interest, taxes, depreciation and amortization) of $10.6 million, the highest amount since Forbes began tracking NBA finances 10 years ago.
The typical NBA franchise is now worth a record $379 million, 2% more than last year. The new eight-year agreements with ABC, ESPN and TNT that began with the 2008-09 season are worth $7.4 billion, 21% more than the prior deals on an annual basis.
Broadcast rights are important, but ticket sales are the lifeblood of NBA franchises, and a number of teams are struggling in that department. Forbes cites the Bobcats, Grizzlies, Pacers, and Kings as teams whose attendance figures have slipped in recent years. The reason is simple: those teams are struggling to win games. Twelve of the top fifteen most valuable teams made the playoffs last season. The Knicks, Bulls, and Heat are the exceptions.
Other facts and figures:
- Houston Rockets owner Les Alexander was chosen as the NBA’s best owner after “doubling the Rocket’s revenue” over the past six years.
- The Lakers own the league’s highest average ticket price: $107. That’s $36 dollars more than the average ticket price in New York.
- The Knicks offer “center court VIP boxes a few rows off the floor. The boxes have private wait staff and flat-screen TVs and cost as much as $800,000 for the season.”
- Bulls owner Jerry Reinsdorf purchased the Bulls in 1985 for $16 million. Forbes values the Bulls at $504 million.
- Attendance fell for the seventh straight season in Philly.
- Teams collected $3 million for not exceeding the luxury tax threshold last season.
- The average NBA team generates $20 million in luxury suites and club seating. The Orlando Magic generated less than $2 million in luxury suites and club seating.
- The Cleveland Cavaliers are valued at $477 million. Forbes valued the Cavs at $222 million the year before they drafted LeBron James. Cleveland’s value “increased more than 30%” to $298 million the year after LeBron’s arrival.
- Cleveland’s value has increased by $255 million since selecting James with the first pick of the 2003 NBA draft. Utah was ranked one spot ahead of Cleveland (16th) the year before the Cavs drafted LeBron. Utah’s value has increased by $132 million since 2003. New Jersey was ranked one spot behind Cleveland in 2003. New Jersey’s value has increased by $77 million since the Cavs drafted LeBron. So by that crude comparison, LeBron James is worth at least $120 million. I’m just sayin’.
