CNBC analysis: even if the Nets lost $44 milion, not $77 million, it suggests NBA losses (but what about the new arena?)
(I wrote separately about how the document reveals that the loan from Mikhail Prokhorov is at 11% and the 5% development fee to Forest City Ratner is a minimum.)
According to CNBC Sports Business Reporter Darren Rovell's analysis, even if the team's claimed $77.2 million loss in 2008-09 is overstated, a more realistic $44 million figure could be used to back claims of NBA losses.
Income and losses
The team earned $78.8 million in operating income, mainly from ticket sales and broadcast revenues, two figures that likely would leap upon moving to the new arena in Brooklyn.
Operating expenses were $147 million, including $66 million in salaries and $33.3 million in "amortization of intangible assets." Rovell notes that the latter is considered creative accounting by the players union, and he agrees the team's loss is "probably closer to $44 million."
He also acknowledges disputes over depreciation and interest. His conclusion:
So now take the Nets loss of $44 million that year. That means that the Nets share of the losses were nine percent of the total losses. If all teams used generally accepted accounting practices, is it possible that 23 other teams lost an average of $19.1 million that year? Of course it is.Keep in mind
I'd suggest an additional conclusion: the new arena will help the team do much, much better. After all, as Tom Ziller writes on SB Nation, that had a lousy year:
The Nets finished 14 games under .500 in 2008-09, and had the sixth-worst total attendance in the NBA. The Nets were still playing in the awful, antiquated and awful Izod Center at that point, despite constantly brewing plans to move to Brooklyn. (Those plans should be realized after the 2011-12 NBA season.) The Nets of East Rutherford -- they now play in Newark -- were always considered to be uniquely cursed: they had all the media costs of New York City and all the earning capacity of, well, East Rutherford, New Jersey. After trading Jason Kidd and Richard Jefferson, the Nets could no longer even boast a decent team.
Nets Financials 2009/2010