Full-Court Press: Forbes Puts NBA Franchises Up 6% This Season

The value of the average NBA franchise rose 6% this year to $372M, and the Knicks became the first franchise in league history to be worth at least $600M, according to Badenhausen, Ozanian & Settimi of FORBES. NBA teams posted an average profit of $9.8M -- prior to interest, taxes, depreciation and amortization -- on revenues of $119M, marking the highest income since the magazine began tracking NBA finances in ’97. The league’s financial success “is a result of three components: a steady increase in gate receipts; bigger TV deals, despite sagging ratings; and a [CBA] that tightly controls spending on players.” The following presents Forbes’ NBA franchise values for ’07.

* = Value of team based on current arena deal (unless new arena is pending) without deduction for debt (other than arena debt). ** = Includes arena debt. ^ = Net of arena revenues used for debt payments. ^^ = Earnings before interest, taxes, depreciation and amortization.

KNICKS: Despite being the league’s most valuable franchise, the Knicks “still managed to post the biggest operating loss in the NBA last year.” The club spent $166M on players, including luxury taxes, while losing $42M, which includes the $18.5M severance for former coach Larry Brown (FORBES, 12/24 issue). In N.Y., Peter Lauria noted the Knicks’ loss “is the third-biggest ever for an NBA franchise in a single season,” with only the Trail Blazers in ’02-03 and ’03-04 topping that mark. Forbes Associate Editor Kurt Badenhausen said, “The Knicks’ spending was particularly out of control last year, but profitability should improve this year” (N.Y. POST, 12/7).

NOTES: The Cavaliers saw a 20% increase in value to $455M, due to its NBA Finals appearance and its new deal with FSN Ohio for an average of $25M per season. The Raptors saw an 18% jump due to its improved on-court play and the improved Canadian dollar (FORBES, 12/24 issue)....Suns Managing Partner Robert Sarver, whose ownership group bought the team in '04, said, "We have been very successful in terms of our success on the court, which has led to an increase in revenue, which has led to us spending more on basketball." Sarver also indicated his "stake in the team is slightly more than 38[%]" (ARIZONA REPUBLIC, 12/9).