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League says it lost money every year of this CBA

Jul 6, 2011, 8:48 AM EDT

NBA & NBA Players Association Announce New CBA Getty Images

We’ve been bringing you reports questioning how much money the NBA owners are really losing. Frankly, we have doubts about the owners’ veracity on the numbers — they are losing some money but how m.

It’s hard to believe the owners when they say the league has lost money in each of the last 11 seasons.

The New York Times wrote one of those pieces we quoted, and the league has fired back with a statement from NBA spokesman Tim Frank saying the numbers that the Times based its analysis on (from Forbes) are flawed. The Times runs it in full, but here are some highlights.

The league lost money every year of the just expiring CBA. During these years, the league has never had positive Net Income, EBITDA or Operating Income.

The Knicks’, Bulls’ and Lakers’ combined net income for 2009-10 does not cover the losses of the 23 unprofitable teams. Our net loss for that year, including the gains from the seven profitable teams, was -$340 million.

This brings us back to a couple of points we have made from the start: 1) When the basis of this CBA was hammered out after a strike in 1999 it was considered a big win for the owners because they got a cap on players salaries and this deal makes players a fixed cost; 2) Players are still a fixed cost, they still get 57 percent of the gross income every year, what has changed is non-player expenses have ballooned (Forbes estimated it was by 43 percent over 10 years).

The players should be giving some money back in this new deal. They need to help make sure all the owners have a chance to make money and player salaries remain the single biggest expense by far. But the owners cannot just balance their books on the back of the players who did not alone create this problem.

Also, until the owners’ books are opened up for independent verification, you should be skeptical about what their real losses are. Many NBA owners are losing some money, but the league lost money for the last 11 years? Really? No doubt the owners are using accepted accounting principles — they are not cooking the books illegally — but within those principles are a lot of ways to move money around and exaggerate losses.

  1. ac0117 - Jul 6, 2011 at 9:16 AM

    Go to 53/47 owners players, keep the soft cap + luxury tax + bird rights, and renegotiate in 2015-2016 when the NBA’s TV deal is up. That would fix this imo

  2. savocabol1 - Jul 6, 2011 at 9:44 AM

    Forbes goes off of estimates and trends when they publish their reports. Anyone who takes their numbers as an accurate figure would have to be crazy.

  3. LPad - Jul 6, 2011 at 11:52 AM

    The real question is what exactly are these non-player costs and why have they increased by about 40% after inflation?

  4. nfl25 - Jul 6, 2011 at 1:54 PM

    So Kurt is saying they could have a lot of write offs to show losses, just like every self employed person does. I will make it easy for everyone. Lets add 340 million back in as a profit to what the league is actually saying. Now they break even. Arent you supposed to make a lot of money if you won an NBA franchise. Honestly I don’t believe these guys truly lost a lot of money, but they def aren’t making what they should be and the NBA is broke.

    Just please fix this soon. There is no reason either side should wait until we lose a month of the season before they decide to negotiate in good faith. You know there will be a deal done, why miss games when you know u will eventually make a deal.

  5. wiLQ - Jul 7, 2011 at 12:38 PM

    “When the basis of this CBA was hammered out after a strike in 1999 it was considered a big win for the owners […] Many NBA owners are losing some money, but the league lost money for the last 11 years? Really?”
    That’s a ironic comedy gold… 😉

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