The teams losing money in the last 12 months are the Dallas Mavericks, Portland Trail Blazers, Orlando Magic, Atlanta Hawks, Sacramento Kings, Indiana Pacers, Charlotte Bobcats, New Jersey Nets, Minnesota Timberwolves, New Orleans Hornets, Memphis Grizzlies and Milwaukee Bucks.
Teams’ average operating income was $7.8 million, with the Lakers at the top with $51.1 million, just ahead of the Bulls at $51 million. Portland’s value has increased the most, by 10 percent, while the Kings and Grizzlies each have dropped the most, by 13 percent.
via Lakers most valuable NBA franchise, Forbes says – NBA – SI.com.
The headline of course talks about the Lakers, and how rich they are and how popular. At the bottom it talks about how they have over $44 million (think about that number for a sec) more in operating income than the average. Meanwhile, buried within the story is how the small market teams (I would term PDX, ORL, SAC, IND, CHA, MIN, NOH, MEM, and MIL as small market) are in the red. The league, quite simply, has to do something about this. And Nate Jones (a Lakers fan and someone with close ties to NBA business) has strong feelings about what that something should be. He emailed this on Thursday.
Honestly, revenue sharing amongst the teams is the only way to solve this damn thing. Read the section on the Grizzlies. The economics of the small market are going to force the NBA’s hand. You can’t make money simply relying on your small market with no chip in from the big markets. It’s insane that the Lakers get to keep all of their gate revenue. I mean, it takes two teams to play a game. They should be taking 30% of gate receipts off the top. Same with local television and radio deals. An organization like the Grizzlies can’t focus on making winning decisions when they know that they are going to lose no matter if they put a winning team on the floor or not. Short of a name superstar arriving there, that market will continue to fail them.
Now, Memphis is kind of a special deal, outlined in a decade of misery and failure, based primarily (according to the article below) on the failures of Heisley as an owner, a premise which Heisley of course vehemently disagrees with:
So the owners are left to grouse about what might have been. Cates says Memphis can support an NBA championship team just as well as San Antonio does. The cities are similar in size and income, and both have only one major league sports team. “They just do things right, and we don’t,” he says. The Spurs, however, were lucky to get two superstars in the draft lottery, David Robinson and Tim Duncan, setting the foundation for four NBA titles. Spurs owner Peter Holt has also kept his executive and coaching staffs stable.
via Memphis Blues – Forbes.com.
The NFL has an economic and competitive environment that exists for every fanbase to cheer passionately and financially support their team with the assumption that they have as good a chance of winning a title as anyone else. The NBA more or less treats teams outside of its major markets as fodder to feed to the big markets on a Sunday afternoon. The Lakers just happen to be the fattest cat. Why else do you see LA playing at home on a Sunday time after time, often on national television later in the year? Why do they keep getting smaller Western Conference contenders on a TNT late game with an opponent coming off a back-to-back? Did you see similar advantages during the Spurs’ run? This trickles down over to Orlando, and why SVG is probably not completely off-track in how the media perceives his team as second-rate, despite being the defending Eastern Conference champions. Hedo nailed a fall away three two years ago to beat the Celtics on the road, and the announcers seemed stunned. I’m not saying there’s a conspiracy which affects play. But I am saying that there is a business model for each player, a business model for each team, and a business model for the league. And the league’s model is best served by one dominant franchise.
Don’t get me wrong, Los Angeles doesn’t luck into this. They have a supportive ownership group dedicated to winning that has made smart moves in hires. Any other GM would have panicked and traded Kobe for the best he could get when he demanded a trade, and most GMs would have given up on Bynum. But Kupchak didn’t, and it’s worked out. I bet their marketing group is one of the best in the league, and while that’s certainly facilitated by having one of the best bandwagon fanbase opportunities in all of sports, the most money of any team in the league, and a gigantic market to pull from, it’s still a chicken and the egg question. Compare that to the Clippers, who are not bankrupt only because they operate in LA.
People ask me why I care. After all, the biggest spenders should get the most reward. But at the same time, teams that have the same effort, with fans that want it just as much (and don’t chant for tacos after showing up in the late second before leaving with time left), and hard-working people in their offices suffer because they simply don’t operate on a level playing field. Every team’s fans root for their team and watch other teams only as an opponent. But as someone who loves the game, loves the fans, and loves the league, this situation creates a disservice to everyone except the biggest markets that are able to capitalize on the advantages given.
And in these economic times, shouldn’t we be focusing on stopping the bleed, rather than selling burial plot space and using the money to hold a party?
*******
An aside on Heisley:
Is it stunning to anyone else how a man can know he’s constantly ridiculed by league insiders and the media, to be aware that the decisions he’s been involved in have not worked out (Iverson, Thabeet), and yet to constantly maintain that he’s right, and that he’ll prove people wrong, all the while making comments which do nothing but hurt the value of his club and his team like “Sometimes I sit back and wonder why I did it”?
I mean, throw out cliches, defer to your GM, deflect responsibility, but at least seem like you’re aware of reality.
