What The Current Value Of NBA Franchises Means For The Upcoming CBA Negotiations

01.20.16 3 years ago
Michele Roberts, Adam Silver

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NBA franchises are growing in value at an incredible rate, and they don’t show any signs of slowing down, according to Forbes. The New York Knicks, last season’s second-most valuable franchise, reclaimed the top spot this year from the Los Angeles Lakers. The Knicks are valued at $3 billion, while the Lakers, despite their terrible team, are worth $2.7 billion. That these two franchises are at the very top really isn’t a surprise.

What is a surprise, however, is how many teams are now valued at at least $1 billion.

The average NBA franchise is now worth $1.25 billion, up 13 percent over last year on the heels of a 74 percent gain the previous year after the national media deals were completed.

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Thirteen teams are worth at least $1 billion, up from just three, two years ago.

The league’s 30 teams generated $5.2 billion in revenue last season and $900 million in operating profit (earnings before interest, taxes, depreciation and amortization). Both are records.

The Bulls, Celtics, Clippers, Warriors, Nets, Rockets, Mavericks, Heat, Spurs, Cavaliers and Suns are the other teams who have crossed the billion-dollar threshold. We’ve seen this meteoric rise in real time over the past few years with the sales of teams like the Bucks, Warriors, Hawks and Clippers. Each team sold for far, far more than their original purchase price – remember, Steve Ballmer paid a cool $2 billion for the Clippers two years ago.

While this is great news for the league, it might actually hurt their cause when the owners come to the negotiating table with the NBPA for a new collective bargaining agreement.

The Forbes report states that every team except for the Nets turned an operating profit last year. This means the owners can’t claim franchises are continuing to lose money, one of their main talking points from the previous negotiations in 2011. This is a big deal for the NBPA, who lost leverage in those negotiations because some teams weren’t turning a profit and the Association was losing money overall.

Commissioner Adam Silver claimed a “significant” number of teams were losing money in the 2013-14 NBA season, and that’s an assertion he can’t make now. This new report from Forbes all but negates one of the owners’ primary bargaining chips in 2011. (We’ll forget, for a moment, that the owners hilariously used their own capitalistic incompetence to prove they needed a larger stake of Basketball-Related Income – BRI.)

The NBA is doing well, and the books are finally matching that reality. Now we’ll see if this data means the owners capitulate on the BRI (currently a 50/50 split after the 2005 CBA gave players 57 percent) or other divisive issues in the next CBA negotiations.

One things for certain, though, they certainly can’t cry poor anymore.

(Via Forbes)

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