Earlier this week, Grantland’s Zach Lowe wrote about a confidential NBA financials memo he was able to view. Excerpt:
The basketball side of the Nets’ business is projected to have lost $144 million over the 2013-14 season, according to a confidential memo the league sent to all 30 teams in early June. (Grantland has reviewed and verified the memo with a half-dozen sources.) If that strikes you as out of whack, that’s because it is.
The NBA expects nine teams will end up having lost money once luxury-tax distribution and revenue-sharing payments are finalized. The Nets, with that monster $144 million figure, are the biggest losers. Next in line? The Wizards, with projected losses of about $13 million. That’s right: The Nets lost $131 million more than any other NBA team last season.
Lowe noted that this figure only reflected basketball activities; in Brooklyn’s
New Jersey’s case, it did not include benefits from an ownership stake in Barclays Center.
Wizards owner Ted Leonsis has previously said the Wizards were not making money; he told Washington Business Journal in November that annual losses were well into the seven figures. Tuesday, ESPN 980’s Scott Jackson asked Leonsis about the Grantland report.
“You know, I was really disappointed that a league document that just went to all of the owners somehow got into the hands of the media, but sometimes that’s to be expected,” Leonsis said. “And I’ve been pretty straightforward that the team was not profitable and was losing money, and that basically we knew that going in and we would continue to invest. And I believe, just like the Caps, if the team can perennially make the playoffs and we’ll get to a sellout situation, and our ratings will increase and then we’ll be able to get a better TV deal, the financial side of things will take care of itself.
“But short term there are losses, yeah,” Leonsis said “The situation is real. Those are audited numbers. That’s what the league sends to all of the owners now in how the league is doing. It’s something we have to work on. But I’m more focused on making the team better and making those investments than I am on ‘Are we making money or losing money.’ ”
Several hours before the Wizards reached an agreement with Marcin Gortat, Leonsis also talked about his strategy this offseason.
“What we wanted to do was be truthful and authentic to our fanbase,” Leonsis said. “And I hope people appreciate that. We’re incrementally getting better and better. That was a part of our plan. We rebuilt the team in total. John Wall is our most experienced and longest tenured player. And we were fortunate: both John and Bradley look like they’re going to be really good players, and Kevin Seraphin will be with the team, and Glen Rice will be with the team, and we’ll continue to have lots of young kids playing minutes. But now it’s time to keep the team together.”