NBA loses $400 million, yet salary cap goes up?!

[Bankshot]

David Stern increased the cap to help the Heat have more flexibility.

[Roy Hobbs]

I am guessing that NBA team's non-basketball expenses are out of control.

I imagine that is why the players don't like the league's figures.

"In each of the first four years of the deal. probably losses of a couple of hundred million, at least $200 million a year," Stern said. "At our current level of revenue devoted to players' salaries, it's too high."

Basically how it works is that the cap is set at 51% of basketball related income (with some carve outs for benefits, etc.) 

With teams spending to the cap, and well beyond in some cases, it's easy to see why things might not be sustainable for the league.  Basically, somebody needs to save the owners from themselves, like happened in the NHL.

[Spilling Green Dye]

The Joe Johnson signing pretty much signaled to me that Owners need help from themselves. 

[BballTim]

Doing some quick math, the NBA's revenue's last year were around $3.6 billion (which is how the cap is defined), so lossed of $400 million wouldn't be *that* out of the question. 

Well, maybe they are.  What the heck are the teams spending $4 billion on?  Let's say the average team payroll is $80 million.  That's $2.4 billion.  Where's the HUGE deficit coming from?

Insurance
Custom jet upkeep
Team and corporate trave
Hotel accommodations
Scouting and coaching
Administrative and executive salaries
Medical and training personnel
Taxes and upkeep on team owned property and training facilities
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I am sure with 30 teams these things add up.

  A lot of teams (I would assume) don't own the arenas they play in. Renting them out for 45+ games a year wouldn't be cheap.

[nickagneta]

Doing some quick math, the NBA's revenue's last year were around $3.6 billion (which is how the cap is defined), so lossed of $400 million wouldn't be *that* out of the question. 

Well, maybe they are.  What the heck are the teams spending $4 billion on?  Let's say the average team payroll is $80 million.  That's $2.4 billion.  Where's the HUGE deficit coming from?

Insurance
Custom jet upkeep
Team and corporate trave
Hotel accommodations
Scouting and coaching
Administrative and executive salaries
Medical and training personnel
Taxes and upkeep on team owned property and training facilities
Advertisement

I am sure with 30 teams these things add up.

  A lot of teams (I would assume) don't own the arenas they play in. Renting them out for 45+ games a year wouldn't be cheap.

Good point. Leases over years get expensive. TP.

[Andy Jick]

The Joe Johnson signing pretty much signaled to me that Owners need help from themselves. 

So did the Brian Scalabrine signing...5 years ago.