NBA $$$: Warriors and Cavaliers are Billions Apart

Last season, only three NBA teams made over $100 million dollars, according to Forbes.  One of those teams were the NBA champ Warriors. The other two didn’t make the playoffs. The Lakers annually gross $150 million from their television contract, almost ten times the amount of small market teams. The Knicks rake in telelvision profits in massive amounts as well. Not surprisingly, all three teams are worth the most in a league in which every team is worth over one billion dollars.

  • 1. New York Knicks: $3.6 billion, 9% increase
  • 2. Los Angeles Lakers: $3.3 billion, 10% increase
  • 3. Golden State Warriors: $3.1 billion, 19% increase

The Warriors are the story here. When they were purchased in 2007 the price was $450 million. They have appreciated nearly eight times that much and after they move to pricey San Francisco they will more than likely bypass the Knicks as the most lucrative NBA franchise. And without a massive television deal on the back end. Fiscally speaking, what the Warriors have done this past decade is impressive.

The Chicago Bulls and the Boston Celtics round out the top five.

Of the teams whose value has shot up in one year:

  • Philadlephia 76ers: $1.1 billion, 48% increase
  • Minnesota Timberwolves: $1.0 billion, 38% increase
  • Milwaukee Bucks: $1.0 billion, 37% increase

The Sixers also had the biggest jump in television ratings thanks to Embiid and company, up 84%. They have a waiting list of 1,000 after their allotted 14,000 season ticket holders are catered to which is 11,000 more season ticket holders than when the Process began. Hint: talent and winning sells seats.

The Cleveland Cavaliers are in the middle of the pack, 15th, worth an estimated $1.3 billion, an increase of 10% which is attributed to inflation but nothing more. Their oversized contracts, their luxury taxes, the fact that they were the only team last year that didn’t post a profit because of their luxury taxes, has inhibited their value. No one is crying for Dan Gilbert though. That said, moneyball is probably the reason Dan Gilbert isn’t taking free agent advice from LeBron James. LeBron James has put Dan Gilbert in financial quicksand with the contracts of Tristan Thompson and J.R. Smith. The Cavs lost $6.2 million dollars because of their bloated $134 million payroll checks added to another $25 million in luxury tax payments. And they didn’t come close to winning the title.

Players don’t want to hear it and fans don’t want to hear it but profits and loss matter. Particularly now. Salaries spiked two years ago. Now they are going to level off and free agents not named Paul George and LeBron James are going to ask for more money than is on the table. The Alan Crabbe $74 million (12 ppg), Evan Turner $70 million (8.4 ppg), and Nic Batum $120 million (12.2 ppg) are distant overpay memories. This summer, the center will hold; reasonable logic will take over.

One more thing. Owners can no longer cry about the money they don’t have in their effort to lowball the players union as a whole. Everyone worth a billion means that if every owner sold his franchise he/she would come away with the best investment cash-out capitalism has to offer. The stock market, as we have recently seen, is volatile. Real estate lives and dies on the interest rate. The NBA is not so sensitive. The international growth makes the NBA the fastest growth league of the four sports. It lags behind the NFL as far as valuation but the NFL is treading water with CTE complications while the NBA has entered a period of luxury, growth and financial appreciation.

 

 

photo via llananba

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