Despite a league-low payroll, the Nets lost $44.3 million last year, according to confidential league documents obtained by ESPN’s Zach Lowe. That’s the league’s second biggest loss, behind only the Pistons who lost $45.1 million.
The Pistons’ losses were actually much greater. The Nets did not receive revenue-sharing money from the league and their profits from Barclays Center are not included in the analysis. The Pistons, on the other hand, lost $63.2 million before collecting revenue sharing last season, “the largest loss by a wide margin,” Lowe notes. Detroit doesn’t own its own arena, unlike the Nets.
A league source tells NetsDaily the issue is “revenue not expenditures,” that the 20-win Nets simply did not sell enough tickets. They will have additional revenue streams this season: a $30 million increase in local TV rights from the YES Network deal and $8 million for their jersey ads from Infor. In addition, the team expects greater ticket revenue after offseason acquisitions like D’Angelo Russell and Allen Crabbe.
The Nets basketball payroll, any NBA team’s biggest cost, was so low last season that it didn’t even reach the salary cap floor, as prescribed by the collective bargaining agreement between the league owners and players union.
The Nets, said the league source, have never made money in Brooklyn and didn’t make money their last years in New Jersey under Bruce Ratner and before that under the late Lewis Katz and Raymond Chambers. Ratner, in fact, ran up record debts financing the Nets losses. When he sold the team in 2010 to Mikhail Prokhorov, the team had $200 million debt, nearly identical to the team’s value at the time.
Lowe notes that the materials he obtained did not discuss the profit-and-loss picture for teams like the Nets who own their own arena.
Several teams own their arenas, and revenue they generate from hosting non-basketball events is not included in the league's basic financial reporting. For example, the Nets lost about $44 million last season, the documents show, but that doesn't account for revenues from the Barclays Center, which the team's parent company owns.
The arena does make money, although it too has had disappointing profits in some years. Prokhorov’s ONEXIM holding company owns 100 percent of the team and arena, having closed on the purchase of Ratner’s remaining shares last year. Prokhorov also owns the lease on Nassau Coliseum.
The main point of Lowe’s analysis is that despite the huge influx of national TV money last year, teams are still losing money.
Despite a flood of new national television cash, 14 of the NBA's 30 teams lost money last season before collecting revenue-sharing payouts, and nine finished in the red even after accounting for those payments, according to confidential NBA financial records obtained by ESPN.com.
The Nets rank second in those nine.