Still, the Sixers’ valuation is good for only 23rd in the league, despite a 12% increase year-over-year. They also were one of only four teams to operate at a loss in 2013, losing about $3.8 million, according to Forbes.
Like most things in sports these days, the crazy NBA valuations, especially for teams like the Sixers, are coming from both the new CBA – poorer teams get more money, and players get less of the overall share – and impending TV deals.
Franchise values got a boost from cost controls in the new CBA, as well as the much-anticipated next round of TV contracts. The current pacts with ESPN/ABC and TNT are worth an average of $930 million annually and expire after the 2015-16 season. Most big sports TV rights packages are locked up into the next decade and the NBA is sitting in the catbird seat as the last major opportunity for new sports channels, Fox Sports 1 and NBC Sports Network, to make a splash. ESPN is a slam dunk to retain rights to NBA games thanks to the sport’s importance to the network and its huge affiliate fees war chest. Speculation is swirling that the NBA might follow the NFL’s model and carve out a package for a third rightsholder to spread the wealth and boost the total value of the rights. A deal is expected in the next few months for at least double the current agreement.
It will be interesting to see what happens here. The league will get massive sums of money from the networks, which are desirous to have live sports programming, but, as we’ve continually discussed here (and on the new Cord Snipped podcast!), there is a shift in the market as more people cut the cord from cable companies. This means smaller carriage fees to the networks. [The NBA is allowing regional networks to stream local games, but that usually comes with the stipulation that you need a cable login.]
Either way, Joshua Harris just got more rich, by losing money. God bless America.