Published: Wed, September 20, 2017
Sports | By Nelson Rowe

NBA Teams Lost Money in 2016-17

NBA Teams Lost Money in 2016-17

Almost half of the NBA's 30 teams reportedly lost money before collecting revenue-sharing payouts during the 2016-17 season.

Because of the fact that many small-market franchises can't generate appropriate revenue, revenue sharing was implemented to help them. National television contracts mean a huge influx of money for franchises, the jump in the salary cap means big contracts for superstars and role players alike, and player movement has never been more fluid.

The Bucks, Cavaliers, Grizzlies, Hawks, Magic, Nets, Pistons, Spurs and Wizards took losses after revenue sharing, with the Cavs and Spurs hurt by the system.

The NBA's Board of Governors will now meet on September 27 and September 28 to discuss possible solutions.

The talent level is at an all-time high, they just recently signed a massive TV deal worth $24 billion, the value of franchises is soaring (see Rockets, Houston), and there's a budding dynasty in Golden State.

In all, 10 teams transferred $201 million combined in revenue-sharing to 15 other teams in 2016-17, according to the documents. The Pistons lost $63.2 million before collecting revenue sharing last season, the largest loss by a wide margin, despite being one of the NBA's larger markets. If these aren't rising in lockstep (Spoiler alert: They're not) teams then are forced to deficit spend, especially those who are over the luxury tax threshold.

It is notable six of those nine teams made the playoffs last season, including the Cavaliers.

For example, the Charlotte Hornets had a negative operating income in 2016-17, according to the report, but still finished in the black after receiving profit-sharing and luxury-tax payments.

It's important to disclose that these figures are purely related to income generated by the game of basketball, stripping out additional revenue generated by ownership in ancillary businesses. This report does not infer that Dan Gilbert, owner of the Cavaliers, lost money a year ago; it's that he didn't make any, from an accounting standpoint, through the Cavaliers.

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