Business is booming across the league, as an annual Forbes study of all 30 NBA teams estimates that the value of every single franchise has increased in the past year.This marks the second straight season of significant increases, which is not at all a coincidence given the team-friendly stipulations of the latest collective bargaining agreement.
According to Forbes' list, the four most valuable teams in the league -- the Knicks (valued at $1.5 billion), Lakers ($1.35 billion), Bulls ($1 billion) and Celtics ($875 million), respectively -- remain unchanged, although Chicago becomes just the third team to crack the $1 billion benchmark. The first shift comes in the No. 5 slot, where the Nets made the leap from their No. 9 ranking in 2013. Brooklyn's valuation showed the biggest increase by percentage between 2013 and 2014, as the upswing of $250 million in value represented an increase of 47.1%. Here are the top five teams in terms of percentage increase between this year's study and last:
Brooklyn's boon comes at an opportune time, as Forbes' study also reports that the Nets operated at a loss of $19 million during the 2012-13 season. That figure could grow beneath mounting salary and luxury tax costs this season, though at the least the Nets are making some corresponding gains in terms of the overall value of their franchise.
As one can tell from the chart above, the Lakers are in a different financial class from much of the league. The Knicks and Bulls are the only other NBA franchises to have crossed the $1 billion threshold in estimated value, though neither made the kind of year-over-year gains that the Lakers did in the past 12 months. That L.A.'s value rocketed up through Kobe Bryant's multiple injuries, Dwight Howard's departure, a first-round playoff exit, and now a losing season is some weird science from a basketball perspective, but far more goes into defining franchise value than on-court success. James Dolan nods in agreement before laughing maniacally all the way to the bank.
It seems that the current CBA is following through on at least some of its intended aims -- namely the compensation of the league's less profitable teams from those earning the most revenue. More on the NBA's more robust revenue sharing program from Forbes' Kurt Badenhausen:
The CBA also boosted revenue sharing from the NBA’s haves to have-nots. Only $55 million changed hands under the prior CBA, but low revenue teams were supplemented nearly $120 million last season mainly from the league’s top revenue clubs. Close to $200 million is expected to change hands this season based on last season’s financials. Former perennial money losers like the Charlotte Bobcats, Milwaukee Bucks and Memphis Grizzlies all turned a profit last season thanks to at least $10 million each in revenue sharing. Overall, only four teams lost money on an operating basis by our count.
The aforementioned Nets were one of the four teams to operate at a loss last season, along with the Hawks, Timberwolves, and Sixers. In total, though, Forbes notes that league-wide revenues swelled to $4.6 billion, while the average value of an NBA franchise grew 25% from last year to $635 million. The Kings were the only franchise to change hands in ownership since last year's study, and they sold for $534 million back in May. Current projections pin Sacramento's value at $550 million, the 16th highest mark in the NBA at present.