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Despite Dolan's and Isiah's Best Efforts, Knicks Still Most Valuable

By Mark

The Forbes report on the value of NBA franchises is out for this year and despite what you have been reading and hearing about the state of the league, the value of the typical franchise actually rose 6%. This in a year in which ratings for the NBA Finals were at an all time low; the league was rocked by a betting scandal involving a referee; Seattle filed suit against the Sonics to prevent the owners from moving the team to Oklahoma City; the Knicks were involved in a sexual harassment suit that exposed the ineptitude of team management for the world to see; and the Kobe Bryant circus continued in Hollywood.

Who would have guessed that values were up? Who would have imagined that not only would the Knicks maintain their ranking as the most valuable franchise, but the value of the team would rise amidst the travesty of the trial to a record breaking $608 million, despite losing $$42 million, on revenues of $196 million. Paying $18.5 in severance to Larry Brown surely didn't help the bottom line.

What the Forbes report demonstrated more clearly than ever is that the most valuable teams are those in big markets with rich local television deals, while the most profitable ones (and they are most definitely not the same clubs) are those that go far in the playoffs and have modest payrolls. What distinguishes the NBA from the NHL is that while both now have salary caps, the NHL is still driven primarily by ticket sales, as for the most part, local TV pacts do not bring large revenue, where in the NBA, it is local TV that can be the major driver of franchise value, particularly in the major markets. Tickets sales are important, but are almost a given in most markets. It is local TV, which is not shared, that is the difference maker.

For current NBA schedules and up to date information about where your team is playing this week, be sure to consult Doc's Sports NBA team schedules here.

Full post as published by Sports Biz on December 11, 2007 (boomark / email).