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Monday, October 27, 2014

How Does a 19-63 NBA Team make a $40+ Million profit?

~ Give yourself a Very Big hand if you can name just one of these players..

Professional sports franchises are very lucrative and very profitable..

And you don't even have to put a competitive team on the field (or court or ice rink) to make lots n' lots of money which frankly is not deserved to most owners..

We're going to look at the Philadelphia 76ers as our example..

Last year they tanked the entire season, meaning they intentionally put the worst players and the most inferior product out there on the court with the goal of always losing and getting the #1 pick in the draft lottery..
It didn't work out even with a 19-63 record, as the Cleveland Cavaliers lucked out with the #1 pick and the Sixers drafted 3rd..

So once again this year the Sixers are employing the exact same strategy since their top draft pick is lottery protected..

That means if they made the playoffs this year, that pick would end up going to the Miami Heat..  Miss the playoffs and the Sixers keep the selection.

But you'd think there'd be financial repercussions from all this intentional losing and making the local fan base completely disillusioned to want to see this collection of crap play live..
Wrong..  Sixers owner and billionaire Wall St Vulture/Venture Capitalist Josh Harris made a profit from last season

How?

Let's use this years' figures as the example..

The entire roster will cost the Sixers $34 million in salary for the 2014-15 season..  The salary cap is $63 million..

This means Philadelphia's owners will be spending $29 million Less than most other teams in the league
Currently each NBA team gets about $28 million from national TV rights annually..  You add that figure to the $30 to $40 million a large market team gets for corporate advertising, and you have around $58 to $68 million for each NBA franchises..

You subtract from the $35 million the Sixers are paying in salary and you're looking at a profit of $29 to $39 million and without a single person attending a game.

Then you have local TV and cable rights along with overall NBA revenue sharing and division of tickets, and each team makes a fortune..

The average NBA ticket draw per game is $750k..  Figure the away team gets a portion of the gross..  maybe 35%..
So on average, the Sixers would get $262,500 per full contest..  And when multiplied by 41 away dates, you're talking about $10.76 million in revenue playing on the road...

Add everything up and don't forget merchandising, and you're looking at the Sixers making as Profit a total of $40 to $55 million dollars.

For a terrible unwatchable, unlikable team that will ultimately be gutted and sold to the highest bidder

Because as long as the overall value of the NBA goes up, all its franchises, even the shitty ones go up in value too..
~ Philly Good ole' Days..  Dr J; 1977

Forbes in January of 2014 set the Sixers' valuation at $469 million..

Only three years ago Harris and his consortium of profit-seeking drek bought the franchise from Comcast for $280 million..

If the weasel sold the team today, Harris would make a profit of nearly $200 million on a basketball team that since the 2011-12 season has gone 88 wins - 140 losses; a .386 winning percentage

And that is why all the NBA owners came down so needlessly hard on former Clippers owner Donald Sterling this past summer...  No one and nothing threatens their cash-cows
~  Wilt Chamberlain; late 1960s

The NBA is a horrible product..  Only 4-5 teams have a realistic chance of winning the championship and because all player salaries are guaranteed and all trades involve a 15% cap differential, that means very infrequent movement...

Often the only way mediocre to bad teams have any shot at a future is an outright fire sale dump like Philly is doing and hoping by going terrible for a few years, this will parlay itself to success later on?
~ The Great AI; Allen Iverson - early 2000's

Will it work?  Who knows..

But that  Wall Street vulture owner of the ballclub will be make large profit hand over fist no matter, and the stupid simpleton Sixers fans will still keep attending live.