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Friday, August 7th, 2009 at 11:00 am  |  15 responses

Shockingly, the Memphis Grizzlies are Profitable

Not only do they still have scouts, but the Grizz are reportedly making a nice chunk of change from their woeful operation: “For that [team owner Michael Heisley] is unapologetic, especially given several other owners have privately sought his advice. ‘We’re definitely in the top third of the teams in the league (in terms of the bottom line),’ Heisley said. ‘It’s because we’ve watched our expenses and we have the support of a good, hard-core group of people. We’re going to survive no matter what. But we cannot compete salary-wise with places like Los Angeles and Cleveland. Some of my worst financial losses came during those (playoff) years. You can’t sustain that.’”

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  • Ken

    That IS surprising.

  • http://slamonline.com Allenp

    It’s not surprising if you understand that ticket sales are only a small part of NBA franchise revenue. The biggest revenue maker is the television and other merchandising sales, and those profits are split evenly among all teams. Just like most sports.
    Sorry teams get a huge chunk of their income from these sources and as long as they are prudent as far as salaries and other expenditures they will consistently turn a profit. Ask Donald Sterling.
    Keep signing draft picks and journeymen and you will always, ALWAYS make money. The problem is when you have to retain talent and get better talent. That’s why a good GM is important. A good GM protects the bottom line by consistently getting good value for the players you spend money on. Winning games increases popularity. That allows owners to offset their increased spending with increased revenue from ticket sales and other advertising deals.
    But, the assumption that crappy teams always lose money is not based in reality. Crappy teams with bloated payrolls lose money.

  • http://slamonline.com Brad Long

    Great breakdown, Allenp.

  • http://sevendeu2u.wordpress.com/ Seven deuce

    Hmmm, well that does explain some of the perplexing moves I’ve seen in regards to teams tweaking their rosters. Thanks for the inside info AllenP

  • tavoris

    Allenp, when you get in a mood to write, it’s a joy yo read (even moreso than the original article)

  • http://slamonline.com Allenp

    Thanks everybody, but somebody hipped me to the game, so I can’t take credit for figuring it out by myself.

  • Teddy-the-Bear

    Nice Allenp! That was really informative. Thanks man.
    That last line… did you mean the Knicks? This coming from a Knick fan =\.

  • rav

    making money is more important than winning – sums up heisley (and sterling and some other guys who own teams) quite nicely for me

  • http://slamonline.com MiguelKG5

    I think that the Grizz should brace themselves for summer 2010 because a lot of players become available and they can reconstruct ur bball team.

  • http://hibachi20.blogspot.com Blinguo

    How this thread is going, can’t really make a Z-Bo joke on he also has a hard-core group of guys as support… but I guess I just did, and wasn’t planning on saying more than just that.

  • http://slamonline Negetivekreep

    Agree w/ everyone else on Allens comment.
    This offseason we saw a trend of teams dumping/ and trading the contracts of high paid vets.
    Vets getting smaller shorter contract offers.
    And teams on a ‘chip mission’ swarming the market to pick up peices of a championchip puzzle, like “La Raza” swarms calles on saturdays for garage sales. It’s a trend that ain’t goin’ nowhere anytime soon. Unless you think this recession will be over in he next year or two (dont hold your breath). It’s no suprise several other owners have privately sought Michael Heisley’s advice. We’re seing a new mindset of NBA owners and GM’s, one whose main focus is the bottom line. That is, unless your team has one of the 7 or so players with iconic global status, and whose presence makes the team a championship contender.
    The group of elite teams has alwasy been small.
    I think the only difference now is the concentration of talent. Veteran, high paid talent, the kind of talent teams pursue for one reason. Meaning, The (already small) group of elite clubs are distancing themselves even further from the pack. If Dwades as smart as i think he is, there’s no way he’s signing that contract extension. By 2010 there will be at least 3 or 4 teams with solid supprorting casts desperate to land one of the few guys that can catapult them into (or keep them in) that ‘elite group’of contenders. LeBron knows this, and will do this. As do gm’s for teams not part of the ‘elite’ NBA. Who will continue to trade away, dump big long term, vet, contracts. And keep their eye on the bottom line. When Michael Jordan one of the most competetive guys in the world has bought in. You know things are changing.

  • http://www.facebook.com/people/Sesa-Opas/738856357 Sesa

    High Risk High Gain, Low Risk Low Gain

  • Sean C

    the fact of the matter is, a lot of teams are using the salary cap as a reason for getting rid of these long term high priced contracts. the NBA, like all sports is a BUSINESS. let us not forget that. from what i’ve seen so far in the trade market, very few team are trading to make their teams better on the court, with the exception of teams that see themselves as championship contenders, (sorry Cleveland, that doesn’t include you). the bulk, are trading to either free up cap room and money for 2010, or to bring people into the arenas to watch an entertaining product, with little chance of winning games ( that means you New York). the owners have resigned themselves to the fact that L.A. Lakers , San Antonio, Boston, Orlando,
    Portland, Atlanta, Cleveland, Utah, Denver (now that they made the Billups trade), Detroit, are going to make the playoffs, and one of them is going to win, and all the other teams are is a farm system to develop talent to feed these teams. that is why in the past ten to fifteen years, only a handful of teams have won it all. Boston sucked for years, but they traded and gambled and they became champs. Lakers after Magic and Kareem sucked. they traded and won three. Denver trade A.I. and went to the conference finals. so if you as basketball fans, want to pay for an inferior product with the hopes that in 2010 you will land a Dwayne, a Lebron, a Joe Johnson, a Dirk, dream on. if they don’t resign, they will be going to
    championship caliber teams, for small money. nuff said

  • http://www.triplejunearthed.com/dacre Dacre

    cashcow..
    O_o

  • Coast

    Great breakdown Allen.
    This is really interesting given the CBA talks. We all assume that the owners will be against the players, but we could see some owners against each other by challenging the current revenue sharing system.
    As Allenp pointed out, if you will have a tough time competing for the playoffs (pretty much half the West Conference teams) then just minimize payroll, and “rebuild” (stock up on cheap young guys and promote their “potential”). So what incentive will owners of teams like Portland, Toronto, etc. have for investing into player contracts if a first round appearance is all they get and the massive ticket sales revenue partly goes to a team not looking to compete yet like Memphis. Owners of teams that spend might want a bigger share of revenues if they don’t already get it. Surely L.A., Cleveland, Boston, etc that generate huge TV deals should get a greater share if they don’t already.

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