quentinNBPA Lacks Trust In NBA's Financial Handling
July 7th 2011 09:42
The NBA players' association is doubting the league's financial woes since it has made inaccurate projections before. The NBA said it does not matter since those financial projections have nothing to do with the final numbers it turns over to the union. The union and league official have talked very little about the financial information during the lockout, a day after a report questioned whether the NBA lost money two years ago. Even though the NBA said it lost $340 million dollars in the 2009-10 season, a New York Times blog entitled, “Calling Foul on NBA's Claims of Financial Distress” called the league “fundamentally a healthy and profitable business” with an estimated operating income of $183 million dollars that season. The union spokeman, Dan Wasserman, said the NBA conjectured a wane in revenues in the 09-10 season, but it actually rose, so the league final losses should have been less than the league said. In 2009-10, the NBA repeatedly estimated the league's revenue would decline as much as five percent or $180 million dollars, while also projecting losses of $370 million dollars. Revenues were up in 09-10, and the estimation was off by as much as $200 million dollars, but the loss figures were only adjusted by $30 million dollars. Because of the projected losses, the league foreshadowed a steep loss in the salary cap for the 2010-11 season, saying it could fall as low as $50.4 million dollars, but it set as $58 million dollars because of the high ratings of the seven game final series between the Lakers and Celtics.
The NBA spokesman, Mike Bass, said that “Mr. Wasserman's questioning of the league's audited financial based on this missed projection is a completed non-sequitur.” The Times blog based their information on the estimates prepared by the Forbes and Financial World magazines. Bass rebutted and said that information was inaccurate; said Forbes “does not have the financial data for our teams and the magazine's estimates do not reflect reality.” The league even said it believed Financial World went out of business. “The NBA and its teams share their complete league and audited financial as well as our state and federal tax returns with the players union,” Bass said to avoid the issue about the NBA's financial debacles. The league's projected losses of $300 million dollars last season after suffering losses of several hundred million dollars in each season of the CBA. It was also saying that $250 million of purported losses was due to “from an unusual accounting treatment related to depreciation and amortization when a team is sold.” The NBA said it uses the GAAP accounting approach. Bass added that “none of the league's losses are related to team purchasing or sale accounting.” The league followed up with another response Wednesday, saying “the notion that $250 million of losses is due to 'accounting procedures' is patently false and so vague an assertion as to be meaningless as a matter of financial analysis." Bass said the league never had a positive net or operating income in the last CBA, and that 11 teams had more than $20 million dollars in net losses in 2009-10. He said that 23 of the 30 teams suffered loss of money that season, while Forbes estimated 17 teams.
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