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Forbes wants you to know they still don’t buy owners’ math

Nov 9, 2011, 7:03 PM EST

David Stern, Adam Silver AP

It has been one of the more interesting sidebars to the entire NBA lockout:

From the start the NBA owners have said they lost $300 million last year, $400 million the year before and money pretty much every year in the past decade. The players and plenty of others have called that, um, well let’s say fertilizer. They note that the losses include debt service on loans to buy teams and when owners do things like own the arena and team there’s plenty of ways to have the money shift pockets.

In an article at Forbes.com Wednesday talking about the lockout math, the magazine once again took shots at the owners’ claims of loss. (Hat tip to Zach Lowe.)

When you tally the aggregate projected operating incomes of all 30 NBA teams, this yields a surplus of $182.6 million. Granted, Forbes may not be privy to all the financial data that ultimately determine a team’s financial position…and their estimates have come under scrutiny before for this reason.

But $482.6 million off? That seems a stretch. Even if Forbes’ operating income estimates are inflated by 25% (which I seriously doubt), you’re still looking at $137 million in aggregate profits.

I don’t think you’ll find anyone who isn’t paid to slide on an NBA uniform who didn’t think the old NBA Collective Bargaining Agreement needed changing. There were issues. But the idea that the owners needed to damage the game like this because of the massive financial losses they incurred remains questionable. At best. Which makes their hardline fighting all the more ridiculous.

  1. zblott - Nov 9, 2011 at 7:22 PM

    There are PLENTY of ways for owners to disguise gains and make them look like losses. Until they actually open their books completely and show that they’re not totally full of crap, players have no reason to negotiate with them under the owners’ premise of “we’re losing money so the talent should make less.”

    http://www.behindthebasket.com/btb/2011/11/7/5-items-the-owners-should-reveal-before-any-deal-is-signed.html

  2. kinggw - Nov 9, 2011 at 7:38 PM

    Of course the owners are fudging the math. They are claiming broke because they are aware that most people dont understand how they determine “revenue”. They figure if they blame the players for being greedy the average person will take their word for it. For what its worth, NBA players like every professional athlete, are overpaid. Damn Forbes and their factual reporting.

  3. tapefolie - Nov 9, 2011 at 8:18 PM

    Does anyone still watch the nba?

    • david8726 - Nov 9, 2011 at 8:44 PM

      I guess you’re unaware of the best ratings in years that last years playoffs had.

      Troll.

  4. brooklynbulls - Nov 9, 2011 at 8:38 PM

    I hate to admit it, but if there is a season, it is tarnished. There’s no deal, arrangement or schedule they can come up with to truly salvage the season at this point. Actually I’m beginning to doubt an agreement will be reached this year at all

    • david8726 - Nov 9, 2011 at 8:49 PM

      Well it obviously won’t be as good as an 82 game season, but “tarnished” is going too far I think.

      If a deal is struck tonight, there will be more than enough games left for teams to play all the conference games they normally would, plus plenty of out of conference games. That’s more than enough to get a good playoff seeding and have a credible post-season.

      I don’t think anyone considers the 1999 Spurs championship to be “tarnished” just because of that lockout, and if a deal happens tonight there will be more than 50 games.

      • brooklynbulls - Nov 9, 2011 at 9:08 PM

        David you are one of the few posters here I normally agree with…but not on this. I’m one of the more diehard NBA fans mainly because it is the only sport I love and the only sport I follow. Tarnished is actually a generous word. A replacement schedule is not going establish the competitve balance needed for the best seeding…i.e. the number of back 2 back games, inter-conference play etc. A shortened schedule benefits some teams while hurting others.

  5. brooklynbulls - Nov 9, 2011 at 9:10 PM

    …..and that ’99 Spurs championship will forever be accompanied by an asterik and a world of what ifs

    • david8726 - Nov 9, 2011 at 9:31 PM

      We’ll agree to disagree, I guess.

      The most important thing in my opinion is that a full slate of conference games gets played, and that will happen. Inter conference games will be lost, but I don’t think everyone needs to have the exact same inter conference schedule for fair playoff seeding to happen.

      In the NFL, there are wildly different strength of schedules for each division.

      The inter-conference (and even in-conference) NFL schedules are very different from team to team. Still, no one questions the validity of the playoff seedings in that sport even though one team might have had an easier schedule than another.

      • brooklynbulls - Nov 9, 2011 at 10:46 PM

        Agreed…Both sides have contributed to the irreparable damage to the momentum gained last year. If the die hards are put off by all of this back n forth, the casual fan has definitely jumped ship

  6. borderline1988 - Nov 9, 2011 at 9:39 PM

    While I agree that the owners are most probably inflating their losses, it’s good to note that even a $130 million operating net income is extremely weak relative to revenues and relative to their investments. And I’m not sure why debt service costs shouldn’t be accounted for (these are private companies; at the end of the day, the interest is coming out of the owners pockets all the same).

    I dont wish to bore anyone with this stuff (as an accountant, I already do too much of that) but I don’t believe NBA owners earn a respectable rate of return on their money considering the risks of the business, even if the return is positive.
    This is especially true if you consider that big-market owners earn a disproportionate share of the league revenues.

    Ultimately these owners are grown men and have to deal with and take responsibility for their own investments, whether it be an NBA team or other business. The problem is, I can assure you that none of those owners had to deal with such opposition for cutting wages of their employees. And the funniest thing about that is, those employees are millionaires to being with.

  7. jonrambo - Nov 9, 2011 at 10:16 PM

    Forbes doesn’t think they are losing money? Why does the NBA own the Hornets? Obviously the big boys are doing fine. Revenue sharing/luxury taxes aren’t enough to keep smaller market teams not only viable but competitive. Do we want this to end up like baseball where half teams are out if it before the season begins? Btw I give that league 5 years til it’s done.

  8. twitter:Chapman_Jamie - Nov 9, 2011 at 10:55 PM

    It’s their team. if the players don’t like it then get a different job.

    • hardjudge - Nov 11, 2011 at 2:45 AM

      I suggest that the players start their own league. They play the game. The owners can buy a ticket if they want to watch pro basketball.

  9. bmorehomeofthewire - Nov 10, 2011 at 7:17 AM

    For all those I referred to in other post about being critical of the NBA players and their salary, Forbes only confirms the GREED on the owners part, and like I said before the players shouldn’t budge on their position….

  10. rayburns - Nov 10, 2011 at 3:29 PM

    The stubbornness of the owners is based on one principle: Save Us From Ourselves.

    Because there are owners in the NBA who can’t help but overpay fair to middling players, thus driving the costs for true NBA stars through the roof, the owners want a way that will, hopefully, keep a lid on salaries.

    As for the NBA players, yes, they’re greedy. But when you’re a 6’11” power forward who has difficulty tying your shoes much less posting up LeBron, should you really be blamed when an owner offers you $10 Million a year?

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