NBA releases books showing $1.85 billion loss over six years

10 Comments

The league office has been working hard in recent days to make its case that the NBA owners are losing money. Big money.

They have now released some audited net income numbers — money left after all the costs are put out — to Forbes in an effort to make a more definitive case.

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 (in the New York Times).

Those numbers show a handful of teams — the Lakers, Bulls and Knicks for example — turning profits while a majority of teams lose money. The largest league loss was for $370 million in the 2008-09 season, while last season was $300 million. The players union disputes those numbers still, we need to add.

We also need to remind you that the players are a fixed cost for the league — the players get 57 percent of the gross basketball related income that the league takes in. Every year. That may be a high percentage (although not wildly out of line with the NFL an MLB) but it is a known number. What are driving losses for the owners is a rise in non-player expenses (that is supposed to be up 43 percent in the last five years).

Forbes also talks about a fix, which involves compromise.

For the NBA to get on any form of solid footing, there is going to have to be significant concessions by both the players and owners. When you see a trend of well over half your clubs running at a loss, there’s a problem that needs addressing.

With local television rights deals driving the economic disparity, the NBA owners are going to need to look at MLB’s revenue-sharing model closely.

In terms of the players, some ability to allow competitive balance has to come into play. Since owner can’t seem to self-regulate like Major League Baseball, then some adjustment of the cap has to be considered – other methods to allow cost certainty.

Compromise is the only way a deal is going to get done. But until there is real pressure — until the threat of lost revenue from games and lost paychecks gets closer — there is not motive to compromise. So we sit and watch two sides with their heels dug in for a summer lockout. And we hope when time for a compromise does come around, both sides are willing to do it.

Michael Porter Jr.: Pray for both George Floyd’s family and police officers involved in ‘this evil’

Nuggets rookie Michael Porter Jr. and Knicks forward Maurice Harkless
Bart Young/NBAE via Getty Images
Leave a comment

Several NBA players posted about George Floyd, a black man who died after being pinned to the ground by a Minneapolis police officer for about eight minutes.

Nuggets rookie Michael Porter Jr. struck a different tone than most.

Porter:

Knicks forward Maurice Harkless:

Harkless, whose dismay was shared by many, is a seasoned veteran. Porter has made made rookie gaffes.

But I’m uncomfortable criticizing someone for calling for prayer for anyone. For some, prayer can be effective way to cope amid tragedy. Many believe prayer can change the world.

Porter didn’t say prayer alone should be the solution. In fact, he called the situation “evil” and “murder,” seemingly suggesting the need for criminal justice, too.

Basketball Hall of Fame delays enshrining Kobe Bryant, Tim Duncan, Kevin Garnett

Lakers guard Kobe Bryant and Spurs forward Tim Duncan
Harry How/Getty Images
Leave a comment

The Basketball Hall of Fame originally planned to induct Kobe Bryant, Tim Duncan and Kevin Garnett in August.

But coronavirus interfered.

Jackie MacMullan of ESPN:

Jerry Colangelo, the chairman of the board of the governors for the Hall, told ESPN Wednesday that enshrinement ceremonies for the Class of 2020, one of the most star-studded lineups ever which includes Tim Duncan, Kevin Garnett and the late Kobe Bryant, will be moved to spring of 2021.

Colangelo stressed there will be separate ceremonies for the Class of 2020 and the Class of 2021, even though both events will now be held in the calendar year 2021. “We won’t be combining them,” he said. “The Class of 2020 is a very special class and deserves its own celebration.”

I’m so glad each class will be honored separately. Bryant, Duncan, Garnett and the rest of this class – Tamika Catchings, Rudy Tomjanovich, Kim Mulkey, Barbara Stevens, Eddie Sutton and Patrick Baumann – deserve their own night.

So does Paul Pierce and whoever gets selected in the next class.

Life can end at any moment. Bryant’s death was a tragic reminder of that. But there’s no specific urgency here. The Hall of Fame should wait until it’s safe to hold a proper celebration of this class… then the next one.

NBA being sued for missed rent payments amid coronavirus shutdown

NBA Store
Jeenah Moon/Getty Images
Leave a comment

The NBA has been sued by the owners of the building that houses the NBA Store, who say the league owes more than $1.2 million after not paying rent in April or May.

The league responded by saying it doesn’t believe the suit has merit, because it was forced to close the New York store due to the coronavirus pandemic.

NBA Media Ventures, LLC is required to pay $625,000 of its $7.5 million annual fee on the first day of each month under teams of its lease with 535-545 FEE LLC, according to the suit filed Tuesday in New York.

The NBA entered into the lease agreement for the property at 545 Fifth Ave. in November 2014.

Counting other fees such as water, the owners of the building are seeking more than $1.25 million.

“Like other retail stores on Fifth Avenue in New York City, the NBA Store was required to close as a result of the coronavirus pandemic. Under those circumstances, we don’t believe these claims have any merit,” NBA spokesman Mike Bass said. “We have attempted, and will continue to attempt, to work directly with our landlord to resolve this matter in a manner that is fair to all parties.”

The NBA suspended play on March 11 because of the coronavirus pandemic and faces hundreds of millions of dollars in losses this season, even as it works toward trying to resume play in July.

NBA latest timeline has games starting in late July, early August in Orlando

Michael Hickey/Getty Images
Leave a comment

Anyone hoping for a rapid return of the NBA is going to be disappointed (and hasn’t been paying attention to how Adam Silver operates).

The NBA continues to carefully move toward a return to games, likely with 16 or more likely 20 teams in Orlando at the Walt Disney World resort complex. Expect players to report in mid-July with games now looking like they start late July to early August, allowing more time for the league to get medical and testing protocols and equipment in place. This according to multiple reports, including Shams Charania of The Athletic.

Adrian Wojnarowski of ESPN reiterated that timeline. While Adam Silver and the NBA owners will be on a conference call Friday, no hard-and-fast timeline decisions are expected at that point.

The format for the NBA’s return also is not yet set, but momentum has shifted in the past couple of weeks away from bringing all 30 teams into the Orlando bubble/campus to finish some portion of the regular season. That would be too many people and too much risk for too little reward.

Instead, the restart likely will have either 16 teams — going straight into the playoffs — or 20 teams, with a play-in tournament of some kind (maybe a World Cup soccer-style group phase). And, as Marc Stein of the New York Times notes (and he is not alone), there is a push to have the clumped 9-12 seeds in the West — Portland, New Orleans, San Antonio, and Sacramento — be the four additional teams brought in (along with the 16 playoff teams).

Teams who last in the playoffs past the first round could be in Orlando for months, which is why the NBA will allow family members to come to Orlando for the later rounds, report Wojnarowski and Ramona Shelburne at ESPN.

Conversations have centered on the timing of family arrivals at the Walt Disney Resort, which are likely to start once an initial wave of teams are eliminated and the number of people within the league’s bubble decreases, sources said.

Family members would be subjected to the same safety and testing protocols as everyone else living in the NBA’s biosphere, sources said.

Considering how long players on contending teams could be in Orlando — from mid-July until mid-to-late September, and maybe longer — allowing family to join them is the right thing to do.

NBA Commissioner Silver is trying to make a return as safe as he can and build as much consensus as he can, although he will not get anything absolute in either case. It’s in his nature to move cautiously, especially through uncharted waters like these. The NBA will have games again this summer, but earlier timelines have proved to be a bit optimistic.