Team Owners Losing Money? Report Says No, While NBA Says Yes

Commissioner David Stern and the 30 Team Owners of NBA franchises have stated throughout the negotiations for a new NBA Collective Bargaining Agreement that many NBA teams have been losing money under the system that expired last Friday. Because so many teams are allegedly operating their teams with a negative cash flow, the Association has asked the NBA Players Association to agree to some drastic concessions including reports that state that they want to reduce the players share of Association revenues to 45%, a vast reduction from the 57% they received in the now expired agreement.

Wednesday the “New York Times” published an article refuting the Association’s claims of teams operating in the red, citing a study by Forbes Magazine stating the NBA actually made a profit during the 2009=-2010 campaign. According to the study by Forbes the Association ended up with a tidy profit of $180 million for that season. A spokesman for the NBA, Tim Frank quickly disputed the figures by Forbes, and said that the NBA actually lost $340 million that season.

Unfortunately, it comes down to a game of he said/he said, as the Association has repeatedly refused the Players Association to see  the team’s financial records. Many players were already skeptical of the Association’s claims that many team’s are currently losing money. This report will only reinforce that skepticism and cause the NBA Players Association to dig their collective heels deeper into the ground as they hold on for what they consider a fair deal by NBA Team Owners.

Here is the bottom line: If an NBA Team Owner is operating at a loss during a time of huge success by the Association, then maybe they should just consider selling the team. Perhaps it is the incompetency of club’s “Brain-Trust” that is keeping them from showing a profit, instead of the players wanting too big a piece of the pie.

The Association is in the midst of a true “Golden Age” right now as the NBA is filled with young, talented and charismatic players. We have seen teams like the Memphis Grizzlies and Oklahoma City Thunder turn their teams around in a remarkably short amount of time, while clubs like the Minnesota Timberwolves continue to languish in the basement of the Association. That tells me it is not the System that is broken; rather it is some of the Operators of that System just continue to do their jobs badly.

Commissioner David Stern and the Team Owners of NBA franchises may get all the concessions that they are looking to receive from the NBA Players Association. However, it will be all for naught if they hold out so long that they drive their fans away, a situation that becomes more likely each day the Lockout continues.

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