On the court, Cleveland is an unmitigated disaster. They’ve won one game since the start of December. They are losing big.
On the accountant’s ledger, the Cavaliers are winning big.
It’s the remnants of the LeBron James era — money committed before he was gone more than covers a post-LeBron payroll, as Jason Lloyd explains at the Beacon Journal.
The Cavs’ standard marketing plan, which forced season ticket holders to renew for this season before last year’s playoffs if they wanted postseason tickets, will ensure owner Dan Gilbert his best year financially despite the woeful product on the floor.
LeBron James, Shaquille O’Neal and Zydrunas Ilgauskas combined to make about $50 million last season as the Cavs’ payroll hovered around $100 million the last few years. It is now about half of that.
In addition, Gilbert will not have to pay a luxury tax this season after writing checks totaling more than $40 million in cap penalties the last three years. Instead, he’ll now receive a portion of that money.
Big-money sponsorship deals with the likes of KeyBank, Kia and others were locked in before James departed and the team is in the midst of a $25 million deal with Fox Sports Ohio for television rights.
The Cavaliers consecutive sellout streak just came to an end a couple weeks ago based off old momentum. Payroll is down to $52 million. Those sponsorships will come down but are paying big now.
No doubt Cavs owner Dan Gilbert would trade all the profits back to be title contenders again. (And yes, his accounting is done in Comic Sans.) He may not be the ideal owner but he’s not Donald Sterling. He cares. He may not always be smart about it but he’s not in it just for a profit. He has been willing to spend, on players and on a beautiful new practice facility. That said, you can expect that payroll to stay low for a few seasons as they try to build through the draft and with youth.
The NBA is a business, not going to knock Gilbert for making some money either. So long as much of it gets reinvested in the team.