Making The Playoffs Vital To Bottom Line For NBA Teams
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Rigby Says NBA Teams
Need Playoffs To Turn Profit |
Jazz President Randy Rigby said making the playoffs is "critical" to an NBA team's financial success, according to Jody Genessy of the DESERET NEWS. Rigby said that in the past, teams often would "break even or better during the regular season and then 'make a little money' in the postseason." But the financial profit for a team now "often gets licked off by skyrocketing player salaries and other franchise costs." Rigby: "There are roughly half the teams that are making money, and half that are losing money." He added the Jazz "will not make money in the regular season. That's just the dynamic." Rigby did not reveal how much the club will lose, but noted that the team's "biggest expenditure'' is player payroll, which will cost Jazz Owner Larry Miller at least $60M this year. Rigby said making the playoffs is important "not only what it establishes for you financially for the remainder of the season but also what it does to establish credibility for the future year." Genessy notes it has long been thought NBA teams earned about $1M for each home playoff game, but Rigby called the figure "high." In order to "cover its annual expenses," the league takes a 45% share of each home gate during the playoffs, up from 6% during the regular season. Also, if a playoff series goes an odd number of games, the visiting team also "gets 25[%] of ticket sales from the final game" on top of the league's 45% share. Rigby: "We share a big part of our gate. That impacts us." Genessy also notes NBA franchises "don't get as big of a chunk from TV revenues because of national production and broadcasts" (DESERET NEWS, 4/18).
FEELING THE HEAT: In Ft. Lauderdale, Ira Winderman reports the Heat, which had the fifth-highest team payroll this season, will "have to pay about $8[M] in the dollar-for-dollar penalty for exceeding the [luxury] tax threshold of $67.9[M] in salaries." The club also finds itself "operating at a deficit" in avoiding the projected '08-09 tax threshold of $70.4M due to buying out the contract of G Smush Parker. The Heat and the Knicks are the only two teams paying the luxury tax that failed to make the playoffs. The four teams paying the highest luxury penalties are the Knicks ($30M), the Mavericks ($19.8M), the Nuggets ($14.8M) and the Cavaliers ($13.9M) (South Florida SUN-SENTINEL, 4/18).
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