Dose Of Reality: Luxury Tax Will Send NBA Kings In The Red
NBA Kings' co-Owner Joe Maloof is projecting that the Kings will lose $5-9M this fiscal year, "mainly because of escalating player salaries, no matter how deep the Kings go into the playoffs," according to Gilbert Chan of the SACRAMENTO BEE. Maloof: "Some years you're going to make money and some years you're not. A trap a lot of sports owners get themselves into is instead of looking at a five-to-10-year plan, they look at their profit and loss every year. You're trying to build the asset value of your franchise." Maloof said the Kings have "lost money every season except last year" since he and his brother Gavin bought the team in '99. Only "a run to the Western Conference Finals helped the team make a $3.7[M] profit" last year, otherwise the team would have lost $2-$4M. Chan noted the Kings "have seen their revenue more than double in the past five years. In the past year alone, the revenue from the Kings' sponsors has increased by $4[M]." Twelve new sponsors signed on this season, bringing the total to 55, with the Kings' largest sponsors paying $700,000-$1M a year and smaller sponsors investing $80,000. Every sponsor up for renewal has re-signed. Additionally, team merchandise sales were up 38% over the previous year. But the Kings are "bracing for an NBA [luxury] tax of up to" $17M, as their $69.9M payroll ranks among the top five in the league. Maloof: "We invest in our product. We're not afraid to do that. We've made Sacramento a place where players want to play. They understand we're in it to win a title and not just survive" (SACRAMENTO BEE, 4/19).
|
