Team Profits/Losses for 2009-10: My best guess

by Storyteller on Jul 25, 2009 2:34 PM PDT Comment 22 comments

I've been using Forbes' data on NBA franchises from 2007-08 (http://www.forbes.com/lists/2008/32/nba08_NBA-Team-Valuations_Rank.html) to try and make some predictions, not just on what teams made or lost money this past season, but also looking ahead to 2009-10. Here are some of my 'conclusions':

Important Notes/Assumptions:
1) I was able to make a basic comparison of home ticket income from 2007-08 to 2008-09 using average attendance and average ticket price data. However, there's that all-elusive 'other income' figure. For 2008-09, my assumption is that 'other income' dropped 1%.

2) My assumption is that overall income for each team drops 4% in 2009-10.

3) This is a snapshot using current player salaries and team salary figures for 2009-10. It does not include any free agent signings or trades that have not yet happened - although it does include players who have agreed to deals such as Andre Miller, Ersan Ilyasova, etc. I also made the assumption that all restricted free agents sign for their qualifying offer amounts. But there are no numbers entered for current unrestricted free agents, including Lamar Odom, Allen Iverson, David Lee, etc. So if you think that Atlanta will re-sign Marvin Williams for $8 million, then you can lower their financial projection by $0.64 million (the difference between $8 million and his $7.36 million qualifying offer). If you think that OKC will sign Lamar Odom for $9 million, then you can lower their financial projection by $9 million. If you think that the Lakers will re-sign Odom for $9 million, then you can lower their financial projection by $18 million (including luxury tax). And so on.....

4) My assumption is that non-player-salary expenses for each team stays the same in 2008-09 and in 2009-10 as it was in 2007-08. I thought about dropping these numbers some but ended up keeping them the same.

5) I could be totally off here, but I think I'm being conservative with these numbers, especially with the losses. The Minnesota Star-Tribune reported a couple of days ago that the Timberwolves lost $19 million last year - my 'guess' has them at losing $12 million. So the losses might even be larger than these 'guesses'.

Anyway here's what I've come up with:

For 2008-09, my guess at operating income for the teams is: (negative amounts are listed between < >)
Chicago - $46.49 million
LA Lakers - $42.32
Detroit - $34.04
Houston - $28.28
Phoenix - $27.03
Boston - $18.01
San Antonio - $17.64
New York - $17.28
Golden State - $15.13
Toronto - $13.85
Washington - $9.59
LA Clippers - $9.10
Miami - $9.07
Cleveland - $8.13
Philadelphia - $6.89
Utah - $3.10
New Orleans - $1.48
Denver - <$0.48>
Milwaukee - <$0.86>
New Jersey - <$2.95>
Sacramento - <$3.30>
Indiana - <$6.54>
Atlanta - <$6.96>
Portland - <$7.42>
Oklahoma City - <$7.66>
Orlando - <$9.50>
Minnesota - <$12.03>
Charlotte - <$12.79>
Memphis - <$14.92>
Dallas - <$25.25>

For 2009-10, my guess at operating income for the teams is: (negative amounts are listed between < >)
Detroit - $42.54 million
New York - $38.52
Chicago - $35.70
LA Lakers - $20.90
Houston - $18.21
Phoenix - $13.68
Golden State - $13.47
Portland - $13.45
Toronto - $13.20
LA Clippers - $10.92
Philadelphia - $9.83
Boston - $9.46
Sacramento - $8.45
Oklahoma City - $7.12
Cleveland - $5.79
Miami - $0.63
Indiana - <$2.63>
Milwaukee - <$3.77>
Minnesota - <$5.06>
New Jersey - <$5.47>
Atlanta - <$6.53>
Washington - <$7.45>
San Antonio - <$9.44>
Memphis - <$11.57>
Dallas - <$17.71>
Charlotte - <$18.68>
New Orleans - <$21.23>
Denver - <$23.87>
Utah - <$29.63>
Orlando - <$33.09>

Why is this important?

When considering future trade ideas, I think you need to consider not just 'is a team over the cap' or even 'is a team going to pay luxury tax' but also 'how will this trade affect the anticipated profit/loss margin'. For example, the New Orleans proposed deal of Tyson Chandler for a draft pick. From a purely basketball perspective, it doesn't make sense. From a financial perspective, it makes a lot of sense.

Anyway, these are just my best guesses.....

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Comments

Will the jazz take out one of those loans offered by the NBA?

If they can’t move boozer…….~$30 million isn’t exactly chump change.

by ppilot on Jul 25, 2009 2:42 PM PDT reply actions 0 recs

Which is why I (wrongly) predicted

that Utah would not match the offer for Millsap.

by Storyteller on Jul 25, 2009 2:49 PM PDT up reply actions 0 recs

Good job, but from an outside perspective it's very hard to predict sometimes as I saw in my post on who took the NBA loan

I think you are e.g. wrong on Sacramento. I have heard reports of up to minus $25 million, and would definitely assume a double digit loss.

by Norsktroll on Jul 25, 2009 3:00 PM PDT reply actions 0 recs

Extremely hard

Lots of assumptions means lots of room for error. I started the thread not because I have all the answers. I put it up because I think it might demonstrate which teams might be looking to ‘sell’ this next year. Who might be willing to make a trade that, from a basketball perspective, doesn’t make sense.

I haven’t heard that report about the Kings – $25 million is a lot of money, even for the Maloofs.

by Storyteller on Jul 25, 2009 5:32 PM PDT up reply actions 0 recs

this is extremely labor intensive and hard

did you consider the average cost of tickets going up in 2 or 3 markets while other markets froze or lowered their prices?

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by Philthyanimal on Jul 27, 2009 1:47 PM PDT up reply actions 0 recs

I think I read that the Grizzlies were profitable last year.

They pulled some financial shenanigans to compensate for their poor attendance.

I’m shocked that you put the Thunder operating at a loss when they basically sold out almost every home game. Can’t imagine Bennett willing to take on additional salary like a Carlos Boozer this year especially since Durant and Green will be coming up for extensions soon.

"I'm at the thingamajig talking the yakety-yak" - Kenny Smith

by blzrfan on Jul 25, 2009 3:35 PM PDT reply actions 0 recs

OKC

Yes, they averaged over 18,000 per home game, but their avg. ticket price was only $36.35. And, their team salary figure was more than $6 million higher in 2008-09 than it was in 2007-08.

by Storyteller on Jul 25, 2009 5:39 PM PDT up reply actions 0 recs

And TV deal was probably less good

And less corporate $s, etc. That will come with time perhaps but not this soon.

"Good evening Blazer fans, wherever you may be!"-Bill Schonely

by skywaker9 on Jul 25, 2009 6:00 PM PDT up reply actions 0 recs

Simmons has said that Detroit was almost giving away tickets just so they would sell out. I’d bet that their numbers are inflated.

life is better as an optimist

by Cablinasian on Jul 25, 2009 10:36 PM PDT up reply actions 0 recs

Storyteller

I would be very interested in the actual numbers behind these results. Would you care to share? Maybe not for all teams as that would be very lengthly, but just for Portland. I have done alot of digging to find out if Portland really is in as bad of financial shape as the Vulcans would like us to believe. My results were very close to yours, but a little different, and I would like to see where we assumed differences.

Specifically I would like to know where you found/came up with the following info:
Amount the Blazers made from local TV rights, (how much is comcast paying the Blazers per year)
Amount the Blazers made from local coorporate sponors
Amount the Blazers made from local Merchandising
Amount the Blazers made from playoff game tix sales
Amount the Blazers were given by the NBA for:
National Merchandising
National TV rights
National Coorporate sponors
Amount you project the Blazers to recieve from the league in 2009-2010 for being under the lux tax.
Specific, (if you could find any) operating costs of the Rose Garden and Specific, (again if you could find any) amount made by the Rose Garden for other events, concerts, etc…
Estimated costs for marketing/advertising/sales staff/administration staff/etc… for the Blazers per year.

Ben II Blazersedge.com || New to Blazers' Edge?

by usmcr3049 on Jul 25, 2009 4:32 PM PDT reply actions 0 recs

access to the numbers

I’m not sure if there is anywhere to look up the numbers, but I recall forbes putting out an article every year about net worths of teams that generally show what you are looking for.

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by Philthyanimal on Jul 27, 2009 1:49 PM PDT up reply actions 0 recs

Right

that is what i am getting at. I am wondering if Storyteller found some info I have not been able to find. I did find a few articles that listed some dollar figures for the NBA’s National TV contracts, and a few others, but nothing about local TV deals, local corp sponsors, or merchendising. Without which this is a completely worthless venture to try and determine what the teams are making or losing.

Ben II Blazersedge.com || New to Blazers' Edge?

by usmcr3049 on Jul 27, 2009 2:04 PM PDT up reply actions 0 recs

Not related

I’m not sure if this will be related to the NBA, but usually when looking up sales figures and salaries for other things, it can be like comparing apples to oranges. There are so many stipulations or incentives that it can be hard to compare. I remember looking at UFC wages and seeing what the fighters got paid out, and it being a relatively small wage, but when others added in incentives, guaranteed money, etc it ended up being substantially different.

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by Philthyanimal on Jul 27, 2009 2:09 PM PDT up reply actions 0 recs

One thing the Blazers can and do get $ from

Is since Alan owns the RG again, they sell cheap seats for low cost ($10 or below if you buy a season ticket) because they get a substantial portion of revenue generated by attendance from food/souvenir sales. I would guess the average fan at a Blazers game spends at least $20 for food/souvenirs, etc.

"Good evening Blazer fans, wherever you may be!"-Bill Schonely

by skywaker9 on Jul 25, 2009 6:02 PM PDT reply actions 0 recs

wow I'm cheap

I think I spent $27.50 on food and merchandise last season, and that’s with full season tickets. They probably hate me.

by Section323 on Jul 25, 2009 8:18 PM PDT up reply actions 0 recs

Nice...

I wish I could do that.

I’m doing a 1/4 season this year in Green (about $500 for the tickets) and figure I’ll spend $3-400 more on food and merchandise (I need a red B-Roy jersey don’t I, among other things).

"Good evening Blazer fans, wherever you may be!"-Bill Schonely

by skywaker9 on Jul 25, 2009 10:58 PM PDT up reply actions 0 recs

Hmm...since they sell out

why would they lower prices?

If I was a cheap bastard (which I am)…if the Blazers sold the seats for less money, that probably wouldn’t effect my spending in the RG. I’d still probably have happy hour or a meal prior to entering the arena. I’d still probably avoid parking at the RG.

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by Philthyanimal on Jul 27, 2009 1:51 PM PDT up reply actions 0 recs

Lakers / Clippers

Who owns the Staples Center, and how is the cost and revenue from the arena split between the Clips and Lakers? Would the Clippers survive if they had to go it alone without big brother?

The cowards never started
The weak died along the way
Only the strong survived
They were the Trailblazers

by lukeyhere on Jul 26, 2009 9:23 AM PDT reply actions 0 recs

The Staples Center is owned by the Anschutz Entertainment Group

Which has owernship stakes in pretty much every pro sports franchise in LA (besides the Clippers). The Clippers pay a measly annual rental fee (which expires in a few years I think) for probably the best arena in the NBA, and don’t have to deal with maintaining the arena at all.

The Chicago Bulls.....the more profitable Los Angeles Clippers.

by Ozzie Montana on Jul 26, 2009 11:57 AM PDT up reply actions 0 recs

The L.A. Arena Company (an investment group/holding) and the Anschutz Entertainment Group (AEG), a company that owns multiple arenas and teams in the US and abroad. AEG has a minority stake in the Lakers and Sparks, and own the Kings who all rent the Staples Center. Same with the Clippers. Reportedly the rent for the Clippers is very attractive (more so than their old arenas in San Diego and LA, and better than what the Lakers pay), enabling the owner to make a nice profit every year.

The Staples Center’s chief executive, Tim Leiweke, has said his building would make more money from five concerts than from a whole slate of Clippers games. But to guarantee the certainty of the team’s revenue stream, he let Sterling renew his lease in 2004 for just $1.5 million a year. Add it all up, and in the nine years after moving into Staples, the team made $140 million in profits. – From a very revealing ESPN Mag profile on Clips owner Donald Sterling

by Norsktroll on Jul 26, 2009 11:57 AM PDT up reply actions 0 recs

Storyteller

do your figures take into account playoff games? I remember hearing lat year that teams take in 1mil for each playoff game. Of course I do not have a source for this.

Thanks for the great article.

Life is exhausting when you are this stupid.

I will talk about DeJuan Blair no more forever

by jonestr on Jul 27, 2009 8:43 AM PDT reply actions 0 recs