I had written previously about the NBA player exhibitions, and how I thought the entrepreneurs who were running them were weakening the NBA owners’ bargaining position. And while that was technically true, it was never going to be enough to combat the leverage held by the powerful David Stern. The NBA owners aren’t losing money, as this blog post shows, but they have enough leverage and there is enough money at stake to make the players and fans suffer to increase their profit margins. Sad, but true.
A great summary of the NBA League finances, as compared to other professional sports franchises, by the incomparable fivethirtyeight blog at the NY Times.
The key takeaway:
Instead, independent estimates of the N.B.A. financial condition reflect a league that has grown at a somewhat tepid rate compared to other sports, and which has an uneven distribution of revenues between teams — but which is fundamentally a healthy and profitable business. In addition, it is not clear that growth in player salaries, which has been modest compared to other sports and which is strictly pegged to league revenue, is responsible for the league’s difficulties.