The NBA teams that are currently making a handsome profit either reside in major markets, or have had recent success on the court. But the toxic combination of playing in a small market and being a bad basketball team, nearly always results in major financial woes. For the teams that have lost the most money recently—teams like the Bobcats and Grizzlies, who have little history in their respective markets—the inability to consistently fire up their small fan-bases with winning basketball has led to major financial issues. The Knicks, given their history, and the size of their market, can put out a mediocre product for years and still make a profit, but the Bobcats don’t have that same luxury.
Here are 5 NBA teams that have been leading the league in losing money:
Owner: Michael Jordan (Net Worth: $525 million)
Current Value: $277 million
Revenue (2010-2011): $101 million
Loss (2010-2011): $25.5 million
Salary Expenditure (2012-2013): $58,082,382
Michael Jordan is a born winner, a perfectionist, and someone who finds failure unacceptable. Whether it’s on the basketball court, the golf course, or playing cards with friends, Jordan cannot stand to lose. Which makes the fact that he owns the most futile team in the NBA particularly bizarre. Amazing players don’t necessarily become amazing executives and owners—there is little correlation between the two—but Jordan and his brand have been so synonymous with success over the years, that it’s hard to believe he’s going to stick around too much longer with a franchise that’s wallowing in failure. Last year the Bobcats posted the worst record of all time (7-59) and things aren’t going too much better this year. Off the court the team continues to hemorrhage money, and in their home state they’re probably less popular than Duke and Jordan’s beloved UNC. How long before he abandons ship?
Owner: Rick DeVos (Net Worth: $5 billion)
Current Value: $385 million
Revenue (2010-2011): $140 million
Loss (2010-2011): $16 million
Salary Expenditure (2012-2013): $84,212,066
Team owner Rick DeVos may be rolling in cash, but his team isn’t doing too well financially. Part of that is due to the massive amount of money the Magic are paying out on player salaries; $84 million this year, plus one dollar for every dollar they’re over the luxury tax, which works out to be an additional $26 million. The biggest money sucker, as far as salaries go, is the contract of Gilbert Arenas. Arenas was amnestied by the team, which means that his salary doesn’t count against the cap, but the Magic are still required to pay off his contract. Arenas is due $20 million this season, and $22 million next year—yikes. Once they begin to rebuild their team, and get the salary situation under control, they may begin to move out of the red and into the black.
Owner: Robert Pera (Net Worth: 1.5 billion)
Current Value: $269 million
Revenue (2010-2011): $99 million
Loss (2010-2011): $24.8 million
Salary Expenditure (2012-2013): $74,127,785
Billionaire wonder-kid Robert Pera (he’s not a kid, but at 34, he’s a lot younger than most NBA owners) recently took over the Grizzlies, a team that has struggled financially for years. Memphis is one of the smallest NBA markets, which means that the franchise is never going to be able to post crazy revenues numbers, but it hasn’t helped that the team hasn’t been very successful on the court since their move from Vancouver. That’s begun to change in the last couple years, however, as the team has started to make the playoffs, and attendances have risen accordingly. In 2007 they had the poorest attendance record in the league, and this year they’ve moved to the middle of the pack. Economic realties have come to the fore recently, however, as there is much speculation regarding Rudy Gay’s future. Despite the fact that the Grizzlies are a playoff contender, they can’t afford to have Gay, Zach Randolph, and Marc Gasol all signed to massive contracts next season.
Owner: Greg Miller (Net Worth: $480 million)
Current Value: $335 million
Revenue (2010-2011): $120 million
Loss (2010-2011): $16.4 million
Salary Expenditure 2012-2013): $65,551,445
The Jazz may play in front of the most raucous crowd in the NBA, but the fact that they operate in a very small market—Utah is the least populous state to have a major professional sports franchise—means the financial numbers that the team have posted recently are very underwhelming. The Jazz have been owned by the Miller family since 1986, and before the last CBA there was some speculation that Greg Miller would sell the team if it continued to lose money. Those reports were shot down by Miller himself, but it’s always going to be tough to post decent numbers playing in a small market like Salt Lake City. Perhaps a boost in fortunes on the court can help the Jazz’s fortunes off it.
Owner: Michael Gearon Jr. (Net Worth: $295 million)
Current Value: $270 million
Revenue (2010-2011): $109 million
Loss (2010-2011): $14.7 million
Salary Expenditure: $66,598,487
The Hawks’ recent financial woes—they lost almost $15 million a year ago—primarily result from having one of the worst attendance records in the league. Last season the Hawks were 23rd in attendance, with an average crowd of little over 15,000, despite the fact that they were a playoff team. And people aren’t flocking to Philips Arena this season either. The franchise’s recent attendance woes result from the fact that the team has been stagnant for a number of years. They’ve made the playoffs since 2007, but have rarely moved past the first round, and have been playing uninspired basketball during that time. The Hawks may post better financial numbers in the next couple seasons, however, due to the fact that they traded Joe Johnson’s bloated contract in the off-season. Danny Ferry saved the Hawks about $80 million over the next four years by shipping Johnson to the Nets.
Team valuations, revenue and profit figures courtesy of Forbes:
Team and owner figures courtesy of HoopsHype: http://hoopshype.com/salaries.htm