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SBD/Issue 55/Leagues & Governing Bodies
Published December 2, 2002
MLS: The SPORTSBUSINESS JOURNAL's Jamie Trecker reports that MLS "cut its financial bleeding" by 50% this year, "saving $10[M] million in expenses from closing its Tampa and Miami teams and cutting overhead for a total savings in the neighborhood" of $15-17M. While "no team is profitable yet," the Crew, Wizards and Revolution "are within a half-million dollars or so of breaking even. Almost every other team is running a deficit of at least" $1M a season. Sources "have indicated that [the Fire] could lose as much as" $4M this year, while the MetroStars' losses "could run as high as" $5-6M (SPORTSBUSINESS JOURNAL, 12/2 issue).
NBA: In Toronto, Michael Grange writes Mavericks Owner Mark Cuban's fellow owners think that his "willingness to flaunt the cost controls the league won in the 1998-99 lockout is a threat to the well-being of the entire enterprise." One NBA exec: "We wanted to level the playing field so everyone can compete on drafting, coaching and player evaluation. Not who has the most money. Is it good to have exciting teams like Dallas? Absolutely. ... But if we don't pay attention to fiscal responsibility, we're ... like hockey." Cuban said the luxury tax "can be very valuable to the league, but I think it's structured completely wrong. There are two elements to the tax, cost and revenue. We reward people for keeping costs below a threshold, but we don't reward them for generating more revenue than the threshold. ... It creates a disincentive. Plus ... why not take a chunk of the tax money and use it in an advertising campaign for the league rather than putting it in owners' pockets?" (Toronto GLOBE & MAIL, 12/2).