Report: Nearly half of NBA teams lost money last season; expansion discussed

Posted: 19/09/2017 in NBA, Sports
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Fourteen of the NBA’s 30 franchises lost money last season before receiving revenue-sharing cash from the league, and nine of those teams still ended up in the red after that, according to confidential financial records obtained by ESPN’s Brian Windhorst and Zach Lowe.

The report appears to confirm suspicions that despite record income from national television contracts, some teams are having trouble turning a profit – and not just in small markets.

The nine franchises to reportedly come out in the red, by the league’s accounting, after revenue sharing are: the Atlanta Hawks, Brooklyn Nets, Cleveland Cavaliers, Detroit Pistons, Memphis Grizzlies, Milwaukee Bucks, Orlando Magic, San Antonio Spurs, and Washington Wizards.

The Spurs and Cavaliers may raise eyebrows given their combined runs of success, but it was already widely reported the Cavs lost $40 million during their 2015-16 championship season – due in part to a $54-million luxury tax bill.

At the end of the day, small cities such as Memphis and Milwaukee cannot compare to markets like Los Angeles. However, Brooklyn is part of New York City, and Washington and Atlanta rank as the nation’s seventh- and 10th-largest media markets, respectively.

At least one owner brought up the idea of expansion as a way to increase team income, the report states. An expansion fee – likely over $1 billion per team – would be divvied equally among NBA owners and not subject to the 50-50 basketball-related income split with players under the collective bargaining agreement.

Commissioner Adam Silver is on record as saying expansion is not a priority, although markets such as Seattle may be soon waiting in the wings for a new team. Relocating less profitable franchises is another option, something a handful of richer owners have suggested, according to Windhorst and Lowe.

The chasm between the NBA’s most profitable and weaker franchises will be discussed at the league’s next Board of Governors meeting at the end of September, sources told ESPN.

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