The NBA as a league may be growing in popularity in a drastic way, but not all of the teams are feeling the effects. According to a report from ESPN’s Brian Windhorst and Zach Lowe, 14 of the 30 NBA teams before collecting revenue-sharing payouts. Of those, nine still operated in the red.
According to the league’s standards the nine teams that lost money are the Atlanta Hawks, Brooklyn Nets, Cleveland Cavaliers, Detroit Pistons, Memphis Grizzlies, Milwaukee Bucks, Orlando Magic, San Antonio Spurs and Washington Wizards. Note that not all of those teams are bottom-feeders of their respective conferences. Some are playoff teams and even recent NBA champions. In the fast-changing financial landscape of the league, smaller markets are unable to keep pace despite the revenue-sharing model. “Teams in small markets are told we need to run our businesses better so we can make money,” one ownership source told ESPN.com. “But teams in the largest markets can run their businesses poorly and still make money.”
The gaps between teams, despite the revenue-sharing model, still appears to be quite the chasm. The Lakers and Grizzlies, who are on the high and low ends respectively, highlights the differences. The Lakers, despite a poor season, made an enormous profit even after coughing up a $49 million check for revenue-sharing. The Grizzlies, who are a playoff squad, lost $40 million and earned a league-low $9.4 million in local media rights. Comparatively, the Lakers cashed in $149 million from their local TV deal with Time Warner.
Teams in the negative are trying to remedy the issue many different ways. For example the Detroit Pistons, who lost a whopping $45.1 million, are moving to a new arena in downtown Detroit to get to a more densely-populated area and increase ticket sales. The Grizzlies are expecting a new local TV deal that will help boost revenue too. Relocation may happen as a result of disappointing financial figures, a last-ditch effort for sure.
Some answers to some of these issues might be addressed as soon as this month. The NBA’s Board of Governors Meeting takes place at the end of September, which includes a half-day session pertaining to the revenue sharing system according to the ESPN article. Many solutions have been proposed, but a true answer has yet to be found.
