Thursday, May 26, 2016

NBA playoffs. Follow the money

Obviously, when it's all over, there can only be one champion. But a whole lot of money is at stake along the way -- particularly for the owners of the franchises. True, many of them are already billionaires having already made their money elsewhere, so owning a team that doesn't make the playoffs isn't exactly going to send them into bankruptcy court.

Yet just getting to the post season is a big financial deal. And the deeper their team goes into the playoffs makes a huge difference in their bottom line. Consider-----

The Toronto Raptors. Most think they have little chance of getting by the Cleveland Cavaliers in the Eastern Conference finals. And they're probably right. Who owns the Raptors? The same conglomerate of faceless honchos that own the Toronto NHL team. Maple Leaf  Entertainment Inc. Close enough. While they will likely fall short of winning a title, the season has already been a financial windfall.

The first two playoff series' the Raps played in went the full seven games. Having home court advantage, that meant the owners reaped the benefits of 8 home dates. Currently against the Cavs, they will get a third home date, for a total of 11. This is big money.

For the sake of argument, let's throw out a few guesstimate numbers. An NBA arena can typically hold 15,000 to 20,000 fans. Any playoff game is a guaranteed sell-out. And at exorbitant prices. The seats might range from maybe two grand to sit court-side down to a few hundred bucks in "nosebleed" country. Let's assume the average seat fetches $500. Do the math. Even at the low number of packing in 15,000 people, that's $7.5 million bucks walking through the turnstiles every game. Throw in the cha-chings of parking and the cuts they get from concessions and paraphernalia sold. Any sports fan who has made the trek to an arena knows all about $6 hot dogs and $8 draft beers. The profit margin on such items is obscene. Add it all up and maybe we're at $10 million per game.

But it doesn't stop there. The television folks pony up countless millions for the rights to televise these contests. They recoup it through commercials to make their own profit, but this is even MORE money flowing in to the owners' pockets. With the huge infusion of TV bucks, can we safely assume each home playoff game might fetch $20 million?

If so, with the Raptors set to play their 11th home playoff game, the math is simple. That's $220 million bucks -- just in playoff money. With the salary cap currently around $60 million, the owners can not only meet total player payroll with ease, but likely pay all the coaches, trainers, doctors, other support staff, and everybody from the front office down to waterboys with a whole lot of money left over.

And that's not even taking into account the 41 home games their team played during the regular season. How much more mega-dough did THAT rake in? The parking, seats, hot dogs, beer, etc., were no doubt cheaper, but you just know they turned a handsome profit each and every game. Good grief, with the enormous TV revenue the owners get, selling tickets is just gravy. It could be argued that if NOBODY showed up all year, they'd STILL make a profit.

On the other hand, consider Dan Gilbert, principal owner of the Cavaliers. Oh, how he aches to finally bring a title to Cleveland. It would be the first that city has seen -- in any sport -- for over half a century. And this just might be the year. The Vegas oddsmakers have Lebron and Co. as the favorite to win it all.

The Cavs currently lead the Raptors 3-2, with Game 6 being in Toronto later tonight. So put yourself in Gilbert's place. Which would you rather have? Your team ending the series in this contest and getting a few days rest? Or perhaps the Raptors winning to force a Game 7 back in Cleveland? The Cavs have absolutely trashed the Raptors in the first three games they played at home, and there's no reason to think they wouldn't do it again in a Game 7.

Plus, there's that little matter of another $20 million or so to be pocketed for another home playoff date.

Ah yes, it's good to be an NBA owner. It's a no-lose situation.

It's even better when your team advances deep into the playoffs.  




No comments:

Post a Comment