Tuesday, August 4

Jersey Logos: Thank You, But No

Have you ever had a friend who saw the value of his home skyrocket, so much so that if he sold his place, he could move to Cannes, settle in, and never have to work again for the rest of his life?

I’m sure we all know that guy … got average grades in school, not particularly bright, but bought a house at the right time and the right place, and now he’s got it made.

Now imagine if that friend, let’s call him Joe, came to your house for dinner, and spent the entire evening whining about how he has to put a new roof in on his $7 million shack, the new tennis court he put in has a bump on one of the sidelines, and his spa’s been acting up. You’d want to smack him in the head, right?

Now imagine further that the reason that Joe’s house appreciated so much was because of the new park the city put in down the street from his home, with a swimming pool, pitch and putt golf course, and dog park.

And, befitting his lack of hubris, Joe decides the best way to raise funds for his refurbishments is to place a huge billboard on top of his house, so that all the folks at the park will see it. Sure, he’s nominally rich, but that’s in book money only, not in cold, hard cash.

I’ve just explained to you how much it burns me up when other folks bring up the idea of placing advertising on NBA jerseys.

I shouldn’t pick on Henry Abbott, and to be completely fair, he’s not the only who believes that a jersey logo is an express train headed directly for our station. Let’s set aside for a moment the validity of his argument that advertising revenues will subsidize lower ticket prices (okay, one quibble: think of how many ways in which the NBA has introduced advertising in our lifetimes: rotating half-court signs, signs around the center of the arena, signs on backboard stands, signs on concourses, ads on team websites … has anyone else noticed a decrease in ticket prices after all these advertising revenues were introduced? I didn’t think so.)

Instead let’s focus on just how much value a team receives every year simply by being in existence. Shown below is a chart detailing the return per year for each team in the league, based upon the price paid for the franchise, the year bought, and the total estimated value of the team based on figures created by Forbes magazine in 2008 (and, yes, I am aware that there are those who dispute Forbes’ figures; they are, however, a reasonably close approximation).

NBA team valuations

As you will notice, the average NBA team returns a value to its owner of $15,589,404 every year. This isn’t direct revenue from ticket sales, or popcorn, or luxury suites, any more than Joe receives a check in the mail because his house is now worth 7 million bucks. It is entirely possible that many of those teams lost money last year, or the year before, just as it is entirely possible that Joe spent too much on jetskis last year and his VISA bill is through the roof.

But put yourself in the position of being the friend of the newly-minted millionaire at that barbecue. When Joe complains to you about his sad lot in life, about how his $17 million house is killing him, about how he needs to put up that ridiculous billboard regardless of how offensive it is to everyone around him, what is your response?

If you’re anything like me, it’s something along the lines of, “Um, Joe, if it’s such a crappy deal, why don’t you just sell the damned thing already?”

7 comments:

Anonymous said...

You have or will almost assuredly see it but I'll post the link anyways

http://newsok.com/thunder-out-to-fill-more-seats/article/3391661?custom_click=rss

Plenty of things that could be said. About actual OKC fan traffic and what could happen when the novelity wears off if big winning doesn't come. About how important those last few thousand seats are, especially these days. In OKC or Seattle or anywhere.
It is high rollers and TV and merchadise. The nosebleed section is chump change for them and should not be a major criteria for selecting a city or their arena.

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