The bad news keeps coming about the NBA.
While various news outlets were pumping up the fact that over 100,000 people attended the NBA All-Star Game last weekend, making it the most-attended NBA game ever, some absolutely devastating news also was announced.
Commissioner David Stern announced the league will lose $400 million dollars this year.
Some characterized the announcement as an exaggeration in order to scare players into taking massive cuts when the next Collective Bargaining Agreement is negotiated.
But consider the following:
According to Forbes, 21 NBA teams lost value from the 2007-08 season to the 2008-09 season. Four other teams had no value change. Only the Lakers, Trail Blazers, Magic, Thunder and Bulls gained value.
Think about that in business terms — 25 out of 30 teams either lost value or gained no value.
If 83.3 percent of a company’s entities lost value or gained no value on a year-to-year basis, the company would be bankrupt and investors would be running far away.
Additionally, only one team had more than a four percent value gain.
Sixteen teams had at least a four percent value loss.
Is it that unrealistic that a league with so many teams losing so much value could be hemorrhaging cash at the rate the NBA is?
Not only is it possible — it is extremely probable.
