Bad news for Thunder fans, but apparently good news for those of you in Oklahoma who failed your high school math classes.
Recently our pals at Forbes released new profit and loss numbers for current NBA teams, and immediately Oklahoma City fans sent me scathing rebukes and mockery over several articles penned last fall on this very subject. I had the gall to doubt that any NBA team could last long-term in your barren community of dust storms and inbred cattle.
According to Forbes last month, the Thunder are the seventh most profitable franchise in the NBA with a $22.6 million “operating income” for this past year of 2009-10. Party hype and popping off from delirious Oakie fans soon followed, celebrating this fantastic Forbes news! This wonderful NBA experiment with itty-bitty villages is supposedly a huge success! How marvelous!
Well not so fast, my tumble-weeded cursed brethren. Let’s take a look at the deeper meaning of these numbers, shall we?
The Thunder’s “Ford Center,” which opened in 2002 at a cost of $121 million (or one-eighth the cost of building Orlando's new arena), generated $45 million in revenue during the first full year of operations with the heisted Seattle NBA team in 2008-09.
Allegedly the Thunder had a “operating income” of $12.7 million, according to Forbes, with “Player Expenses” costing $73 million.
The following year, last year, the second season of operating with an NBA franchise, the profit doubled to nearly $22.6 million, with Oklahoma City fans jubilent over their new-found success.
Wonderful news indeed, if one doesn’t study the true meaning. However once one looks deeper and compares those numbers with future numbers, suddenly things don’t look so chipper.
First of all, the reason the “operating profit” of the team is up, is directly related to the player salary number being down. Way down.
In 2009-10, revenue increased from $111 million to $118 million, but “player expenses” decreased from $73 million to $62 million, while the gate receipts too, decreased by a million. And this after a playoff series with the Lakers, which makes it even more depressing.
Another little nugget from the Forbes report that Oklahoma City faithful like to ignore, is this paragraph:
"The Oklahoma City Arena is in the middle of a $92 million makeover funded by a one-cent sales tax that includes a new scoreboard, new restaurants and remodeled suites. It should be completed some time in 2011. A new $14 million practice facility funded by the same sales tax should also be completed this year. The original costs of the arena renovation and practice facility combined were planned at $121 million but cut back to $104 million because of less than expected tax revenue."
So in other words, in order to generate this wonderful “operating income” of $22.6 million for the team, all the city government had to do was fork over a paltry $104 million of tax payer money for stadium improvements.
Wow!!! What a deal for tax payers!!!
But back to the numbers. This was from a team with the third lowest payroll in the league, loaded with new budding superstars on the verge of demanding both yours and your neighbor’s family farms.
According to salary claims by USA Today and the online Hoops-Hype, here are the 2009-10 player salaries of the top six Oklahoma City Thunder players:
Nick Collison $6,250,000
Nenad Kristic $5,256,000
Kevin Durant $4,796,880
James Harden $4,004,160
Russell Westbrook $3,755,640
Jeff Green $3,516,960
All others $45,420,360
Total player salaries: $73,000,000
Keep in mind that all of these numbers are based on rookie contracts, which of course, are short-term bargains for the Thunder.
This past year, all of you were ecstatic over Kevin Durant’s new five-year extension worth $86 million. Meanwhile the other stars of this team, namely Harden, Green and Westbrook, are also playing under their rookie contracts.
What will these numbers look like in several years? Using the same reports, here’s what the 2013-14 numbers might look like:
Nick Collison $2,243,003 (according to the Hoops-Hype report)
Nenad Kristic $5,800,000 (only if his salary doesn’t increase for the next four years, which is of course unlikely)
Kevin Durant $16,460,480 (according to the Hoops-Hype report)
James Harden $13,000,000 (speculating)
Russell Westbrook $16,000,000 (speculating)
Jeff Green $15,000,000 (speculating)
All others $45,420,360 (the same amount that it is today, which again, is very unlikely it would remain this low)
Total player salaries: $113,923,842
Back to the 2009-10 Forbes report, which had the Thunder player salaries totaled at $62,000,000. Taking the updated salaries from 2013-14, that’s an increase in player salary of nearly $52,000,000.
Now this where it gets fun for those of us in Seattle, still cranky about having our team ripped off by a bunch of dirt-bag oil geeks.
Take that wonderful cushy operating income of $22,600,000, and subtract the new player salaries of $52,000,000, and the Oklahoma City Thunder (run by that genius and flat-topped businessman named Clay Bennett) will be losing some $29,400,000 annually.
And that's if you’re lucky and if the same core players are kept without your bench demanding more cash.
According to the Hoops-Hype report, Durant’s salary increases to $19,317,680 by 2014-15. And we can assume all the other star salaries will increase too, since four of these five players are young with soon-to-be backloaded contracts.
The point being that all of this ..... the entire Oklahoma City story of how terrific the team is doing now that they split the Seattle scene ....... has been a one big snow job of epic proportions. It's not fair to boast of profits when your team has stripped all the player contracts down to the bare minimum, to entice a community to spend money on a business loser.
If anything, OKC fans should be mourning the soon-to-be bankrupt Thunder. Or you could be celebrating how much additional money the community will be obliged to pony up, to help keep this team of multi-millionaires viable.
What should be especially annoying to Thunder fans and haters alike, is knowing that integrity-challenged David Stern and his buddies will soon be chastising your city for forcing poor suffering NBA athletes to play their games in your dilapidated and totally inadequate facility (add violins here).
In Seattle, Key Arena’s paint was barely dried before Stern and then-owner Howard Schultz started whining about how horrible playing conditions were. And this was not even a decade after the place had been completely rebuilt, with everything but the original rafters replaced.
Later Stern and Bennett demanded a brand new $500 million arena be built with 100 percent taxpayer funds. It would be like the Mariners and Seahawks demanding new stadiums today.
Most alarming to alert fans is knowing the team will not be anywhere near as good three years from now, as it is today. Clay Bennett and his oil cronies are not about to lose money on this venture, in spite of the rhetoric promised to the community.
Bottom line is that the Thunder will have worse players, less money, higher ticket prices and an owner both laughing at you behind the scenes while whimpering about how he needs your money to keep the team from moving.
So what I’m saying here Oklahoma City fans, is that this recent financial news is anything but cheerful. Things are about to get ugly like they were in Seattle before this con job put on you by your billionaire heroes. Only this time, you all get to learn this the hard way like fans of Seattle did!
Read Phil's latest article on this subject at: http://bleacherreport.com/articles/610697-time-for-a-competing-professional-basketball-league-in-north-america
Or read part one of the six part series on NBA arenas, this article refers to, at: http://bleacherreport.com/articles/483219-seattle-and-the-message-sent-by-the-nba-by-banning-key-arena
Sources for the above article: