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Joined: 12/8/07 Posts: 14715
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For what its worth, I have access to a team's financials through work.

While it's 100% true that most of the owners are wealthy enough that they will be "fine" regardless (plus it should really be their burden vs. the players...that's just the risk of owning an asset like that), it was pretty shocking to see how much money is going to be lost. First of all, as with college sports, fans/the broader public seem to assume that sports is great business. We hear talking heads like Jay Bilas talk about the millions and billions of dollars in the system. When you actually look at the numbers, they tell a different story.

At least when it comes to pro sports franchises, they are not even close to cash cows. In a typical year, they are lucky to break even. Net Losses are incredibly common in normal years. The costs are enormous and there's not much you can do about them. The way owners make money off of franchises is by appreciation in value. While the teams are pretty crummy businesses, they are still really nice assets, even if they lose money occasionally. I mention this just to set the record straight because it definitely seems like some fans assume that these teams are enormously profitable and can afford to pay the players an infinite amount of money.

Fast forward to our current situation, from what I saw with this particular team's finances, the team stands to lose an enormous amount of money (we're talking 9 digits). And that is a cash loss, as in the owners are going to have to contribute a similar amount of money from their own pockets just to prevent the team from being turned over to its banks.

All of that being said, what I just mentioned is true regardless of what happens from here on out. That money is already gone. Based on the projections I saw, the team/owners would technically save a little more money by playing 0 games than by playing 50 (call it $10MM). So for that reason, while I sympathize with the owners for bearing the burden of the losses, it's ridiculous that they have been negotiating as they have been (I know, it's about giving an inch on future negotiations).

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Posted: 06/23/2020 at 09:08AM


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