2012-13 Lockout Discussion Part VIII: "The 11th Hour" Edition
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12-06-2012, 03:34 PM
Join Date: Mar 2006
Originally Posted by
Thats not true. Only a few teams in the NBA actually profit.
A good portion of the "losses" of several NBA teams is actually due to accounting.
For instance, after the Nets were sold, the purchase price was much greater than the tangible assets of the franchise, so the difference between the two had to go on the balance sheet as an intangible asset. A portion of this total is then amortized over a certain length of time. This shows up on the income statement of the team as an expense, but no actual money was lost.
In 2005, the Nets declared a loss of over $40 million, but actual dollar amounts were around $7 or $8 million. This is true for all franchises that have been sold recently.
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