Forbes ranks the value of NBA teams, and as of last year, the news was generally excellent. The average team profit last season was the highest in at least a decade. The average team is worth a whopping $379 million.
The effect of market-size is undeniable, however. Most would agree that the Knicks could hardly have been managed more poorly over the last few years, yet the New York team remains the most valuable. Meanwhile the Hornets have been a model of turnaround, at least on the court, yet rank close to the bottom, doubtless thanks to a lack of economic might in the New Orleans area.
A couple of notable exceptions to that trend: The San Antonio Spurs snuck into the top ten, while the Los Angeles Clippers managed to be near the bottom in franchise value.
There's also a great story about Portland owner Paul Allen hitting a free throw that made the Blazers players whoop and holler. Portland is the team whose value has increased the most over the last year.
I learned new things about the Memphis Grizzlies, Indiana Pacers, and Sacramento Kings, however. Kurt Badenhausen, Michael K. Ozanian and Christina Settimi report:
The Memphis Grizzlies retain all of the revenues from their home, the FedEx Forum, which opened in 2004. Yet fans have tuned out the Grizzlies. Attendance is down 24% since the building opened, and the team has racked up $48 million in losses since 2004. The team cut ticket prices 22% this year to help curb the attendance free fall, but it continues unabated. Less than 12,000 fans per game are showing up this season, last in the NBA. We value the Grizzlies at $294 million, 27th in the league.
Other teams on the decline include the Indiana Pacers and Sacramento Kings, which both saw their values drop 9% this year. Both teams were model small-market NBA franchises for years, with passionate fan bases and winning squads. The Kings sold out every game from 1999 until last year's opener.
But attendance fell off a cliff last season, down 18% as the team stumbled and fans grew tired of the Maloof brothers' pleas for public money to fund a new arena for their team. Pacer fans also stopped supporting their team, which posted a losing record for a second straight year and had players frequently showing up on the police blotter. Attendance plummeted 20% to last in the league.
To some degree, our NBA team values take into account the turmoil in the financial markets, but without recent transactions (the last sale was Bennett's purchase of the former SuperSonics in 2006), it is impossible to gauge the exact impact the recession has had on prices. But if the economic downturn continues to worsen, it is quite possible that 2009 could be the first time in a decade the value of the typical NBA team declines.
