Quantcast
Thursday, July 7th, 2011 at 9:20 am  |  16 responses

NBA’s Books Show League Lost $1.5 Billion in Last Five Years


After going on the offensive to defend its claims of financial woes, the NBA continued to hammer the point home by leaking financial data to Forbes showing a loss of over $1 billion over the last five seasons: “Net Income–which is after the deduction of all costs–would give a more definitive picture. Sources close to the NBA labor negotiations have provided Net Income numbers for the league each year over the last five years, plus projected losses for the 2010-11 season. Given that the NBA is saying that they are running at a net loss, as opposed to the NFL, which is saying they are seeing profits declining, the NBA is compelled to open their books as part of labor law, and have done so. The following numbers are audited figures. If the projected figures are correct, the NBA will have lost $1.845 billion over the last 6 years, not turned a profit, as reported by [Nate] Silver. The following shows the losses, as well as the number of teams that reportedly have run at a loss the last 5 years, plus projected losses for the 2010-11 season: ’05-’06: 19 clubs ran at a loss, total losses of $220 million. ’06-’07: 21 clubs ran at a loss, total losses of $285 million. ’07-’08: 23 clubs ran at a loss, total losses of $330 million. ’08-’09: 24 clubs ran at a loss, total losses of $370 million. ’09-’10: 23 clubs ran at a loss, total losses of $340 million. ’10-’11 23 clubs ran at a loss, total loss of $300 million. Before one begins to say that this all is skewed toward ownership, looking at the Forbes numbers that detail the 2009-10 season show that while some clubs are running in the red, some, such as the Knicks and Bulls are profiting handsomely.”

  • Add a Comment
  • Share
  • RSS

Tags: , ,

  • http://cnbc.com JTaylor21

    BS. You can’t be losing that kind of money and still be handing out 100+ million dollar contracts to the likes of JJ, Lewis and Arenas. People do know that Lewis made 20.5 mil last season (more than KG and TD), MRedd made 18.3 mil last season (more than Gasol, Yao and Dirk) and AK47 and Arenas made 17.5 mil last season (more than Bron, Wade, Melo, Rondo and other top players). No viable corporation continues to pay employees unwarranted amounts of money yet at the same time turns around and claims it’s bleeding money.

  • Mike

    The owners are hurting because of their own mistakes, nobody forced them to give max contracts to role players; they decided to do it. Now they want to blame the players now…

  • add

    dam

  • robb

    Wow, these owners really are maquiavelic

  • http://Twitter.com/darrellma Dma

    Can we really trust accountants though? I mean they’re the same people that ‘watch’ over the NBA draft lottery and helped enron hide all their money,among many other companies. Something is fishy here.

  • robb

    ^^^^^that’s a good point. No, you can’t trust accountants.

  • JL

    just giving a simple net income number doesn’t make any sense at all. Plus these numbers, on another site i saw, were audited by the League and the teams. Uh… yah you are doing internal audits. that’s very reassuring. However, you gotta be careful when you are arguing that teams are giving out huge contracts. That’s not really the point since there is a limitation on how much the players actually receive of the revenue. So if the owners don’t spend it, they will have to cut the check regardless. i do think that’s still dumb since it would be a one time thing to cut the check rather than 6 years of overpaying a player.

    Net income can be adjusted already for tons of other items. It would be better to know their operating profits and gross profits as well.

  • http://dsjfklf.com Jukai

    I’m with JL. Giving out the net income is worthless because you have no idea what you’re putting on the net income (ie the cost of buying the team along with interest)

  • All Day

    @Mike: co-sign! Now the owners are looking for financial payback for the mistakes they’ve made…reminds me of the idiots on Wall Street and the Banking Industry!

  • Klav

    Dma, so ur really gonna let a few corrupt accountants ruin it all for u? that’s just ignorance. if u really wanna know how the league is doing it, they’re using a tax shelter that’s been in use for decades. it’s a line item called “loss on contracts” where they’re essentially saying after they sign someone they get worse and worse. it’s true if ur signing a 34 yr old Ray Allen/KG, it’s different if ur signing a 20 yr old Blake Griffin. here’s the link. http://m.deadspin.com/5816870/exclusive-how-and-why-an-nba-team-makes-a-7-million-profit-look-like-a-28-million-loss STOP being ignorant and blaming accountants, they’re employed by the franchises to minimalist their tax payments.

  • http://twitter.com/BeezKneezy LA Huey

    Funny how the league is “leaking” the data to plead their case. Why not just open the books instead?

  • http://slamonline.com nbk

    Why didn’t they lose money 6 years ago? 7 years ago? The CBA was largely the same then. What’a crock of sh*t, 1.5 BILLION DOLLARS? What Business attempts to expand (David Stern said they plan a Euro Division this decade) when they are bleeding over 25Million Dollars a year? Oh, a business that releases false numbers. Nevermind.

  • http://slamonline.com nbk

    250* Million Dollars a Year

    Let me say that again, “who expands when they are losing 250+ MILLION DOLLARS A YEAR?”

  • doyouwantmore

    If the billionaires were trillionaires the league would pay the players better, spend more on promotion, and there would be no cheesy franchises that could pass for D-League teams from cost-cutting. But average people have been so brainwashed into hating rich people that they take the side of whoever has less money. Its just as evil to favor a poor man as it is to favor a rich man. Wealth flows downward, not around. That’s another line the media has been feeding you.

  • http://slamonline.com Allenp

    Trickledown economics is a load of crap.
    No proponent of that theory has every explained the fact that the gap between the most wealthy and the rest of society expands under politicians who favor trickledown economics.
    If it’s trickling, it ain’t trickling very far.
    Wealth trickles down, LOL. Explain that to monarchies and dictatorships.

  • Clownfish31

    Funny how a few choice words make it sound like one side or the other is the culprit. The NBA has LEAKED data … instead of say, the NBA has provided data. Anyone who knows accounting knows that it is based on rules that are open to interpretation. Just like any statistic can be twisted to convey and drive your point home.

Advertisement