Oh boy, maybe this gives a little bit of insight into Josh Harris’ apparent (slight) change of heart: In their annual ranking of NBA franchise values, Forbes ranked the Sixers 28th, one spot below last year, but at the same valuation.
For the third straight year, the Sixers have fallen in the league rankings, while being outpaced by teams growing at much faster rates. Two years ago, the Sixers were ranked 23rd with an estimated worth of $469 million. Last year, that number jumped up to $700 million, but it placed them 27th as they were outpaced by other, more successful franchises. This year, they fell only one spot to 28th, but their estimated worth didn’t grow at all, staying stagnant at $700 million. They also had a lower operating income (profit) of only $13.9 million, down from $24.4 million last year. They are one of only four teams with a 0% change in value from last year (Denver, New Orleans, and Atlanta).
Since Josh Harris and others bought the team, even with this year’s 0% growth, the Sixers’ estimated worth is growing at an average of 25% per year. That looks good to us, but the flat-lining isn’t ideal for Harris. For example, the average revenue per fan – defined as local revenues divided by metro population with populations in two-team markets divided in half – is only $12. That’s not great. The Orlando Magic, in a smaller market, pull in $37 per fan, while the Knicks (the NBA leader in value) get $28 per fan in a much larger market. 43.6% of the Sixers’ valuation ($307 million) comes from “revenue shared among all teams.” That’s gonna be a decent amount for most teams, but probably not such a high percentage. (Most other big market teams count only around 25% or less of their revenue from revenue sharing). In other words: The Sixers rely heavily on income they, themselves, do little to earn. This is the crux of the concern of anti-processers– Harris wins regardless of on-court success.
So, maybe this year is a really important year not just for Sam Hinkie, but for Harris as well. If the valuation is plateauing (and falling behind the league’s pace), the need to win, sell merch and tickets might be one reason Jerry Colangelo is here to fix things. After all, Harris’ $287 million investment can’t just be worth only $700 million. That’s insane.