Despite arguments to the contrary spurring the NBA lockout, the league has seen annual profits of 7 percent over the life of the current collective bargaining agreement according to a study by Nate Silver of the New York Times based on data from Forbes and FInancial World.
NBA Lockout: League Has Had Annual Profits Of 7 Percent During Current Deal, According To Study
Silver dug deep into the publicly available numbers and found that despite the NBA’s claims of $370 million in losses in the 2009-10 season, data suggests the league made $183 million in profit. Silver’s work suggests that the NBA made a 5 percent profit that season, its lowest margin since the modern salary structure was created after the 1998-99 lockout but still a solid profit margin for an entertainment company.
Silver points out that while, adjusted for inflation, player salaries has remained on par with revenue growth, non-player expenses has shot up at more than double the rate of revenue and payroll over the past five years. It’s unclear exactly what is driving the sharp uptick in those expenses. Some have suggested accounting “tricks” have been a major factor in confusing the profit-loss situation.
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