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NBA franchise values, where some owners can make bank

Jul 8, 2011, 5:59 PM EDT

Los Angeles Lakers v Regal FC Barcelona Getty Images

It’s one thing left out of the calculations on whether an NBA owner is making money on his franchise — the money he makes on the worth of the franchise.

It’s complex, it’s changing, but the fact remains that a lot of NBA owners have already made tons of money on their teams because what they paid for the franchise is a fraction of what they could sell it for now. That’s money not included in the profit/loss statements, it’s not money the players ever see a penny of (nor should they, the owners put up the money and deserve the rewards).

Tom Ziller broke it down over at SB Nation (and, as is required by law, Ziller broke it down in a tidy graph).

Jerry Buss has seen the Lakers’ value grow $587 million in 21 years. Michael Heisley has seen the Grizzlies’ value grow $97 million in 10 years. Dan Gilbert has seen the Cavaliers’ value grow $101 million in five years. Mark Cuban of the Mavericks: $166 million in 10 years. Cablevision with the Knicks: $286 million in 13 years. And on and on and on …

It’s also worth noting that the NBA owners themselves bought the Hornets for $300 million; George Shinn founded the franchise for a cool $32 million in 1987. So while Shinn cried poor, and while owners cry poor, all they have to do is stick a “for sale” sign out front and those losses turn into massive, massive profits.

The owners will correctly tell you this has not been true in every case, especially in recent years. Bruce Ratner and partners bought the Nets for $300 million and sold 80 percent of it to Mikhail Prokhorov for $200 million. Bob Johnson’s sale of the Bobcats also lost money. Franchise valuations do not just automatically go up every year anymore, and if you are losing money every year you may not be able to cover the costs when the team is sold anymore.

But for a lot of teams, they may lose a little money year-over-year right now, but the owners are sitting on a pile of money with the franchise the players will never see. It’s just another part of the equation.

  1. wiLQ - Jul 10, 2011 at 2:27 PM

    “Ziller broke it down in a tidy graph”
    But he didn’t include inflation which kind of ruins his point.
    And by an amazing coincidence I wrote similar article 2 days earlier…

    http://weaksideawareness.wordpress.com/2011/07/06/should-teams-prices-become-a-factor-in-next-cba/

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