Next time you go accusing the NBA of being cheap, take a step back and look at the facts. Thanks to a new report with confidential information, we now know that nearly half of the league lost money in 2016. With players taking home astronomical paychecks, how is that possible? Well, let’s look at the facts.
THE NBA HAS A SERIOUS MONEY GAP
Much like the rest of America, the NBA has a large gap between the rich and the poor. Take the Los Angeles Lakers for example. They accumulated a massive $115 million profit after the 2016-2017 season. Keep in mind this was their fourth straight year with less than 27 wins and no star player to attract fans.
Still, they recorded the biggest net income in anyone in the league by almost $15 million. On the other side of the spectrum, The Grizzlies lost almost $40 million.
HERE IS WHY SOME NBA TEAMS ARE LOSING MONEY
How does the NBA determine the salary cap? Well, the 30 teams get together and their combined revenue ultimate decides what the salary cap is. Of course, the most popular teams make the most cash and that drags up the cap for everyone else. This only brings in more money for top players and top teams while the rest sink well below the threshold.
Look at the Golden State Warriors for example. Notwithstanding playing in the greatest arena and paying $42 million in revenue sharing, they still profited $92 million. Compare that to teams in small markets, and the number is downright laughable. So is there a solution?
THE SOLUTION FOR THE NBA’S MONEY PROBLEM
Some owners around the league say that teams should share the revenue. That way all 30 teams finish in the black. One daring owner even proposed the idea that all crews should be promised a profit of $20 million. As you can imagine, the top tier teams will challenge those proposals but they certainly bring up interesting points.
This problem won’t go away anytime soon and it’s unlikely those small market teams will profit without some kind of intervention. The coming years will be entertaining ones in basketball news, that’s for sure.