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Bob Johnson Absorbed $80M In Bobcats Losses During His Ownership
Published March 8, 2010
|Johnson's (l) Losses Included
About $30M From '08-09 Season
Bobcats Owner Bob Johnson absorbed roughly $80M in “operating losses over the course of his NBA investment," which in part drove him to sell the team to Michael Jordan, according to John Lombardo of SPORTSBUSINESS JOURNAL. A source indicated that the Bobcats have suffered about $100M in operating losses since Johnson bought the club for $300M in ’03. Johnson’s ownership stake was about 80% “at the time of the sale, up from” 65% when he first acquired the team. The Bobcats lost about $30M during the ’08-09 season, and as “losses mounted, Johnson assumed more ownership as some partners diluted their shares instead of funding capital calls.” SportsCorp President Marc Ganis said, “It used to be that you’d never lose money on a sports team because you could make it up on the sale. That conventional wisdom is no longer the case” (SPORTSBUSINESS JOURNAL, 3/8 issue). The NBA placed the sale price of the franchise between $275-290M. In N.Y., Mitch Lawrence cited a source who placed the sale “in the mid-200 million to high-200 million” dollar range. The source said, “Bob lost money on the deal. He knew he would, but he felt it was time to move on. He had his fun.” Lawrence wrote Jordan “needs to show he’ll pour money into the operation, but also has to be willing to put in the long hours required to keep the franchise going in the right direction.” An NBA exec said, “Will he have the commitment to do it? That’s always the question with him” (N.Y. DAILY NEWS, 3/7).
HIGH HOPES: In Charlotte, Erik Spanberg noted several current Bobcats minority investors are high on Jordan’s “ability to transform himself into a first-rate owner.” They said that Jordan “represents a rare second chance for the Bobcats to make a first impression.” Because of the “significant financial commitment buying a franchise requires ... the hope among many is that the retired NBA star will be motivated to make the Bobcats his first priority.” Charlotte-based Private Sports Consulting Principal Max Muhleman: “Michael has been very conservative in his investments in the past. He’s sticking his neck out with this one. Owning a pro sports team is unlike any other business anyone, even Michael, will ever be involved in.” NFL Panthers investor Johnny Harris said, “There’s a different feeling about Michael than there was about Bob. And I think there’s a different understanding of Charlotte and the Carolinas from Michael than Bob had. He’s one of ours” (CHARLOTTE BUSINESS JOURNAL, 3/5 issue).
CAN JORDAN SUCCEED? In L.A., Mark Heisler wrote under the header, “Michael Jordan Doesn’t Show Signs Of Changing.” Jordan “lives to do things on his terms.” He still makes “millions, emerging long enough to shoot commercials with wide-eyed Charlie Sheen or Cuba Gooding Jr., but no one is smart enough to run an NBA team, or anything else, that way.” Heisler: “Now his money will flow and his name will sit atop the directory, but until it’s a mission to him, as it is to his rivals, Mike’s just a narcissist in a tower” (L.A. TIMES, 3/7). In Charlotte, Rick Bonnell noted Jordan "lives to win," but he is "unused to bearing the cost of winning." There is "not much the Bobcats can do to better themselves that wouldn't involve flirting with paying the luxury tax." But Jordan has "said repeatedly he can't justify paying the tax in this market, with this team" (CHARLOTTE OBSERVER, 3/7).