NBA and the Euroleague owners make money off of their teams from the sponsors, ticket sales, endorsements, merchandise etc. There are 40 majority owners that make up the 30 teams in the NBA. Several companies are also backing these teams. These owners are interested in a piece of these teams for several reasons. One being that you will make money when or if you sell. Over the last 25 years, there was just one franchise that was sold for less that it was bought. Just to show how much these teams are being sold for, the pistons sold in 2011 to a private equity investor TomGores for an amount reported to be anywhere from $300 million to $425 million despite losing an estimated $20 million to $30 million a year. Owning a team can also help the owners' businesses by gaining exposure especially with the NBA. NBA ownership gets them 8,000-word profiles in The New York times. There is also the potential for owners to make a fiscal profit. Even taking the NBA’s financial numbers at face value, there are eight teams make money for their owners.
One of the most interesting feature of the Euroleague is that there is no homogeneous structure. You can have one person owning a team, have a company own a team and you can have members owning the club. Contrary to the logic of a commercial league such as the NBA, most of the people putting money into European basketball know they will never see that money back. Of course, Euroleague is meant to be a money-making business but very rarely is it a business that brings money back to the owners. They do it as a marketing resource to promote their product; they do it for political reasons, to have better ties with a political scenario; they do it for personal reasons or for a relationship with the
local community. Or people do it just because they are crazy fans.
As you can see both the NBA and Euroleague owners have a level of self-interest invested in their team. Do you believe that these owners have interest in the teams that go beyond just a monetary investment?
- Curtis Businski
It depends on the club and who the owners are to actually know and understand if these owners care more about the teams than the monetary value of the team. Many owners in the NBA will buy teams because of emotional attachment and excess money burning holes in their pockets. In the Euroleague this isn't different in some instances where the team is owner by a singular person. There is emotional attachments in Europe because some of the teams are owned by the people that belong to their respective clubs. Yes, I do believe that owners of teams in both the States and Europe have attachments that don't revolve around money because more often than not these teams are incredibly wise financial investments.
ReplyDeleteMatt Vine
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ReplyDeleteThis comment has been removed by the author.
DeleteI would say that for sports owners it is a combination of love/passion for the sports and also, for the monetary aspect. I would think that NBA owners are more focused on the money. Because it is such a success in American, the amounts of money that pours in makes it easier on owners to enjoy it.
ReplyDeleteAs for Euroleague, I think it is a little more based on enjoyment and trying to make basketball take off. It is still about some money, isn't it always? I believe that Euroleague owners are more willing to put money in and not see it back because they have to invest into the sport in order to make a go of it in Europe.
For both, the owners enjoy it for the entertainment, emotions, competition, and lastly money. It is definitely easier for the NBA to focus on the money, but Euroleague is still working towards making basketball the next big thing.
By Naamah Stockdale