NBA Revenue Is Higher Than Ever — So Why Do Owners Claim They Are Still Losing Money?

John Wall David Stern NBA Washington Wizards

Photo: Washington Post

NBA executives expect revenues to jump 3-to-3.5 per cent this offseason, but still insist they need change in league economics.Specifically, they expect to lose $370 million and want to cut players’ collective income by $750 million to $800 million.

Here’s what the league is telling the players in advance of labour negotiations, according to CBSSports’ Ken Berger. Assuming NBA revenues rise 3 per cent, or $120 million, the players get 57 per cent of that, or $68 million, under the current agreement. The remaining $52 million goes to the owners. But they spend $20 million in non-player expenses to generate that revenue, leaving $32 million to the 30 NBA owners.

Because the league doesn’t open its books, it’s difficult to see how it arrives at those aforementioned $370 million in losses.

The league generated $4 billion in revenue last year. After the players take their $2.3 billion, that would leave $1.7 billion for the owners. If it takes $1 to generate every $6 in revenue, then the owners would spend about $700 million to get their cut. That still leaves $1 billion to pad their pockets.

Granted, that might not cover the expenses owners encountered when they purchased their team, but over time, that appears to be a sustainable model. We’ve reached out to the league for comment, but they have yet to respond.

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