A big report from ESPN’s Brian Windhorst and Zach Lowe revealed 14 NBA teams lost money last season, with nine of them still finishing in the red after revenue-sharing, according to league documents.
According to ESPN, the Atlanta Hawks, Brooklyn Nets, Cleveland Cavaliers, Detroit Pistons, Memphis Grizzlies, Milwaukee Bucks, Orlando Magic, San Antonio Spurs, and Washington Wizards all lost money, based on net income, which includes revenue sharing and luxury tax payment.
Now the league is going to be set up for a debate on its revenue-sharing system.
Even with a $24 billion TV deal now in effect, a rising salary cap and rising player salaries have not closed the gap between the NBA’s richest teams and struggling teams. According to ESPN, some small-market teams believe the NBA’s richest teams should share more while some big-market teams scoff at the idea.
According to ESPN, several ideas have been thrown around by both parties and more will be heard at a Board of Governors meeting in late September, when they have scheduled a long session on the issue.
According to ESPN, one owner suggested expansion, noting that the 30 teams would split a massive expansion fee and not have to share it with players. Another suggested struggling small-market teams should move to bigger markets.
Some owners have reportedly argued that teams should share enough money that all 30 teams finish in the black. Meanwhile, others have argued that teams should shrink the amount of revenue-sharing they can take in if they have received revenue-sharing over several consecutive years.
As ESPN notes, the players union may be skeptical of some of the numbers. The NBPA reportedly believes that some teams use tactics to make their franchises look less profitable than they really are. ESPN points to the Nets, which lost money, but the records do not account for the money made by the Barclays Center, which the Nets’ parent company owns.
The league is still in a good place overall, but the optics of losing money after such a big TV deal are not great. While the NBA already avoided a lockout, there is surely going to be a big debate to come about how to make all 30 teams profitable.