NBA: 5 Teams That Are In Serious Financial Trouble

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1. Brooklyn Nets

May 4, 2013; Brooklyn, NY, USA; Brooklyn Nets shooting guard Joe Johnson (7) looks to pass the ball around Chicago Bulls shooting guard Marco Belinelli (8) and point guard Nate Robinson (2) in game seven of the first round of the 2013 NBA Playoffs at the Barclays Center. Bulls win 99-93. Mandatory Credit: Debby Wong-USA TODAY Sports

I put the Brooklyn Nets at the top of my list even though they are technically the second team that owes the most to its players next season next to the Miami Heat. The Nets have about $86 million committed next season, and that number is excluding the assumed re-signing Andray Blatche.

The Nets will be deep in tax next year and will have to pay incremental rates compared to the normal fee. The 2013-14 tax level will be calculated by taking 53.51 percent of the projected “Basketball Related Income,” or BRI, which is the basketball and basketball-related operation’s income received by the NBA. They then take that number, subtract projected benefits and then divide it by the number of teams in the league.

So for the 2012-13 season, that number was $70.3, and the Nets had to pay nearly $13 million to the league in taxes. They will be lucky to pay anything close to that number next year, as the rate will increase incrementally based on how much they owe, much like the tax system used by the government.

For the sake of comparison, if Brooklyn had to pay using incremental rates for the 2012-13 season, they would have owed roughly $23 million, essentially paying another Joe Johnson. Now, why am I putting the Nets at the top of this list when the Heat share the same problems and owe more?

Well, it comes down to profitability. Forbes magazine did an evaluation of the current value of all 30 of the NBA’s franchises. The Nets ranked ninth but had the lowest revenue of all the teams with a payroll of at least $84 million. This means that even if teams like the Los Angeles Lakers and New York Knicks going far beyond the tax level, they have the money to deal with it. The Nets, unfortunately, don’t have that flexibility.

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Topics: Boston Celtics, Brooklyn Nets, Chicago Bulls, Golden State Warriors, Los Angeles Lakers, Miami Heat, New York Knicks

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  • Jack Hoang

    “Biedrins’ most memorable playoff moment was probably his truly un-matchable ability to get five fouls in just 11 minutes of playtime.” haha good one

  • AJ Reuter

    I did not read past the first team. What a load of shit, I am sorry but is this written by a highschooler? High spending ≠ Financial trouble.

    • Dhara Taheripour

      You are the one of the least profitable teams in the league yet you have one of the highest expenditures. How is that not financial trouble? It’s not just high spending, that’s why I brought in the Forbes valuations as well. Its high-spending combined with the fact that the Nets are not nearly making as much money as the Lakers or Knicks. If you read the rest of the article, you would have seen that. That is why I didn’t mention the Lakers or Knicks having troubles.

      • AJ Reuter

        Its the term ‘financial trouble’

        Financial trouble, for me, is when the team is losing money and not having enough to keep it up. A risk factor related to the teams inability to provide sufficient financial resources to meet minimum needs. A family that cannot afford to feed their kids is having financial trouble. .The nets went through their first year with the new branding, its not like the teams worth is going to skyrocket in the first year (But it actually did). Fact is, they *are* making money. And the teams value is growing exponentially. You don’t just move the team and all of a sudden they are the most marketable team. It takes time.

        Financial trouble is poor wording, in my opinion. There is no trouble.

        • Dhara Taheripour

          I understand what you mean and I appreciate the criticism. You are correct when you say that the Nets aren’t really in “trouble” as long as Prokhorov has money to spend, but then again you could say the same about any NBA team. I only meant “trouble” in the way that they will have to pay luxury taxes. Perhaps it was poor wording because I did not mean to imply financial crisis, just that going into the tax is not something any team wants and that is something the Nets will have to contend with in the coming years. What I should have said was “Unsatisfactory Financial Conditions” or “Undesirable Financial Issues” . Re-branding and profitability aside, the tax issues will only get worse with time as teams will have to pay repeater rates. That’s all I was trying to say.