The View From Pluto: For Every Team, the NBA is a Billion Dollar Business
WKSU commentator Terry Pluto says it's a good time to be an NBA owner. Forbes reports the average team is worth $1.9 billion, up 13% over last year and three times the level of five years ago.
The Cavs, however, were the only team to lose value over the last year, down about $50 million to $1.2 billion. The New York Knicks top the league at $4 billion.
A sound investment
Cleveland's value ranking fell from No. 15 in 2018 to No. 25. It was expected after the league's superstar, LeBron James, announced he was leaving the Cavs for the L.A. Lakers. But Pluto says the Cavs remain a lucrative investment for owner Dan Gilbert.
'[Gilbert] still more than doubled his investment in the thing he bought in 2005'
Pluto flashes back to 1983, when Gordon Gund bought the team for $20 million.
“At that point the NBA was struggling. There was no [Michael] Jordan, and Larry Bird and Magic Johnson were just starting to help the league rise up. But Gund stepped in to buy the Cavs and assumed the debts, and then he built it up, and then he was a ‘buy and hold’ guy.”
Gund decided to sell the team to Dan Gilbert in 2005 for $375 million. He kept 15% ownership, according to Pluto.
A worldwide game
Pluto says the NBA is skyrocketing in value because it's becoming a worldwide game.
“You see it with their players and marketing overseas. And it seems to be a sport that even though curmudgeons like me don’t like the players running the show, I think a lot of younger people do embrace it because it is a star league. A lot of times fans just follow their favorite players wherever they go."
Tougher times ahead
In the year since LeBron James has been gone, attedance has remained strong. The Cavs rank 8th in the league, with more than 561,000 fans attending games this season. The average game attendance is more than 19,300.
“In the four years LeBron was here, they were ranked No. 2. Basically every home game was a sell out and the only reason they weren’t No. 1 was because they didn’t have more seats."
Still, Pluto says that's likely to change. "They’re going to have a big drop off next year because many of those tickets were sold before LeBron left. And, the revenue that comes in is going to go down for the Cavs without LeBron."
Still, things are going well for Gilbert.
"In his mind, if the Cavs are losing money right now, there’s only 30 NBA teams. It’s kind of like a Rembrandt comes on the market or something that will not be reproduced. You buy it and you hang on and you’ll sell it for more. But for now, you take all the losses."
Editor's note: This story originally said Gordon Gund had sold his remaining 15% stake in the Cavs. He has not.