Thunder in the black:

Special Report
NBA Team Valuations


NBA Team Valuations - Forbes.com (http://www.forbes.com/lists/2009/32/basketball-values-09_NBA-Team-Valuations_Income.html)

The above information is from Forbes, it shows that the Thunder made money last year ($12.7 million).

There has been a lot of misinformation posted about the Thunder's ability to operate in a small markeet like Oklahoma City.

Thunder in the black:

Special Report
NBA Team Valuations


NBA Team Valuations - Forbes.com (http://www.forbes.com/lists/2009/32/basketball-values-09_NBA-Team-Valuations_Income.html)

The above information is from Forbes, it shows that the Thunder made money last year ($12.7 million).

There has been a lot of misinformation posted about the Thunder's ability to operate in a small markeet like Oklahoma City.

You've got THAT right. A lot of people think we are a rinky-dink small hole in the wall. They would say we would compete with cities like Joplin (for example). That article is proof that what I write defending Oklahoma City is quite acurate. Never sell us short.:congrats:

Great news

Great news! I think this year they will report even better profits.

Great news! I think this year they will report even better profits.

true true they made 12.7 million in a season where they went 23-59

This is good news indeed. However, considering how much they paid for the team, it might not be such a good investment. IIRC they paid $300 mill for the team? This means that it will be 24 years before they reach 100% payback. Or am I missing something?

This is good news indeed. However, considering how much they paid for the team, it might not be such a good investment. IIRC they paid $300 mill for the team? This means that it will be 24 years before they reach 100% payback. Or am I missing something?

You're missing a great deal. The other area where owners hope to reap a profit is simply the valuation of the franchise itself. Clay Bennett is not the only owner of the Thunder. There are other members and occasionally one of them wishes to sell his/her share. If the value of the franchise has increased then the selling owner has made a profit. Its also possible other owners may be able to use the book value of their share of the franchise as collateral for other business ventures (could be wrong on this if there are franchise or league rules against this. Maybe someone else knows for sure).

Most franchise values in pro sports have risen significantly even when the team is losing. Its a matter of supply and demand, the prices other franchises sell for and if there are alternative markets that want a similar franchise. If it's known, say, 6 other major cities badly want an NBA franchise, the value of the existing ones may rise significantly - especially since pro sports has anti-trust protections granted by the government. Other factors are TV contracts, the quantity of team-related paraphanalia that sell, endorsements, etc.

So, if the group paid $300 million for the franchise, but 5 years from now it is valued at $450 million, quite a profit can be realized if and when there is a sale.

You're missing a great deal. The other area where owners hope to reap a profit is simply the valuation of the franchise itself. Clay Bennett is not the only owner of the Thunder. There are other members and occasionally one of them wishes to sell his/her share. If the value of the franchise has increased then the selling owner has made a profit. Its also possible other owners may be able to use the book value of their share of the franchise as collateral for other business ventures (could be wrong on this if there are franchise or league rules against this. Maybe someone else knows for sure).
Good point unless they want to keep it.


Most franchise values in pro sports have risen significantly even when the team is losing. Its a matter of supply and demand, the prices other franchises sell for and if there are alternative markets that want a similar franchise. If it's known, say, 6 other major cities badly want an NBA franchise, the value of the existing ones may rise significantly - especially since pro sports has anti-trust protections granted by the government.
True this increase in valuation only offsets what they paid for the team when/if they sell their interest.



Other factors are TV contracts, the quantity of team-related paraphanalia that sell, endorsements, etc.
These items should all be included in their profits already. Sure there will be more competition for TV contracts and when they start winning championships, the paraphernalia sales will increase but right now, their profits should already include these items.


So, if the group paid $300 million for the franchise, but 5 years from now it is valued at $450 million, quite a profit can be realized if and when there is a sale.
True but the value of any franchise also includes how much profits new buyers would be willing to accept. These are businesses so when a potential new buyer is valuing a team, they think about how much profit they will earn every year. Since that factors into their calculations, they are less inclined to pay more if the teams profits are lower.

Good point unless they want to keep it. True this increase in valuation only offsets what they paid for the team when/if they sell their interest.

Not exactly, unless I am mistaken, the value of their share of the ownership of the franchise can be used as collateral for other business ventures so, in essence, they can use that valuation - even without selling. There are probably limits to the extent to which they can do this.


These items should all be included in their profits already. Sure there will be more competition for TV contracts and when they start winning championships, the paraphernalia sales will increase but right now, their profits should already include these items.

It factors into the profits, sure, but just as stock prices fluctuate with the current and forcasted profits of a corporation, the more merchandise they sell, the higher the franchise shares will be valued.


True but the value of any franchise also includes how much profits new buyers would be willing to accept. These are businesses so when a potential new buyer is valuing a team, they think about how much profit they will earn every year. Since that factors into their calculations, they are less inclined to pay more if the teams profits are lower.

Logically, you are correct, but in reality there is a "toy" factor with major league sports franchises. Some owners use "pocket change" to buy franchises while others put their heart and soul into them. As I said, if there are 6 cities (or 6 ownership groups) who very badly want an NBA franchise for their city, the value of all the existing franchises will go up simply due to supply and demand - demand is high and supply hasn't changed so the price goes up. Some owners may be willing to overpay for a franchise but the fact they are willing to do this increases the value of all franchises. Think of home prices in San Francisco prior to the economic crash - demand was sky high and supply wasn't changing significantly so prices went through the roof.

Click here!
http://www.okctalk.com/oklahoma-city-thunder/20127-thunder-20th-most-valuable-nba-team.html

This part is surprising. OKC is 20th in total team value. They are $3 million behind the Washington Wizards and $4 million ahead of the Atlanta Hawks.

Dallas Mavs were negative 17 million last year, however we are far from the top at $51 mil in profit.

Lets not get too excited here. We are like $12 million below the salary cap.

Revenues and operating income are for 08-09 season and are net of revenue sharing.
These numbers were from before the arena improvements, many of which increased revenue streams substantially (terrace suites, concourse, bunker suites). Another area where the team had very little revenue last year was with apparel. There was very little apparel even out until midway through the season, and almost none available online and in places where non-OKC folks could buy it. I think it's safe to say that at the very least KD jerseys are now popular in places other than here.

I can't tell from Forbes, but if they had some real access to the teams' numbers, the Thunder would have also taken pretty big hits with relocation costs, branding, etc.

Expect next year's report to be dramatically better than this one, further dispelling the "small market" misconceptions. Yes, we're a smallish market, but a team that doesn't have to compete with other franchises in the same town can do really, really well.

My problem is this... people around the country speak of Oklahoma City being a small market as if our population and economy see zero growth and zero loss. Oklahoma City is not going to remain a small market forever.

It definitely won't remain a small market forever.

The most important money maker on the MAPS 3 projects will be the convention center:

Why? It will almost insure potentially that three to five thousand new hotel rooms will be built downtown in the area of this convention center; then, we can start talking about an NBA ALL STAR Weekend for OKC's economy.

Oklahoma City is not going to remain a small market forever.

OKC is making moves, there's no question. Market size is a difficult thing to predict though. Especially, when we lump them into categories like "small" "medium" "large". It's hard to predict because, as you've heard it said, growth for one city doesn't happen in a vacuum; meaning that while OKC is growing, other cities are as well. So, we must leapfrog over other cities to make the jump in those subjective categories of small, medium, large. I don't know if I just made sense. I know what I'm wanting to get across, but I'm in one of those brain fogs that make me feel I'm not saying it right.

Not exactly, unless I am mistaken, the value of their share of the ownership of the franchise can be used as collateral for other business ventures so, in essence, they can use that valuation - even without selling. There are probably limits to the extent to which they can do this.

.

It factors into the profits, sure, but just as stock prices fluctuate with the current and forcasted profits of a corporation, the more merchandise they sell, the higher the franchise shares will be valued.



Logically, you are correct, but in reality there is a "toy" factor with major league sports franchises. Some owners use "pocket change" to buy franchises while others put their heart and soul into them. As I said, if there are 6 cities (or 6 ownership groups) who very badly want an NBA franchise for their city, the value of all the existing franchises will go up simply due to supply and demand - demand is high and supply hasn't changed so the price goes up. Some owners may be willing to overpay for a franchise but the fact they are willing to do this increases the value of all franchises. Think of home prices in San Francisco prior to the economic crash - demand was sky high and supply wasn't changing significantly so prices went through the roof.
Excellent points....cheers.

I wouldn't be too upset with OKC's value in the 300M range. In fact, that seems to be near the median for NBA teams. We shouldn't (yet) expect OKC to be in the same ranks as LA, NY, and Chicago (all significantly above 550M) and there's plenty of company in the 300 club.

At least we are above the 200M bottom feeders and poor Paul Allen (Portland) is hemmoriging. Is that saying something about the Pac NW..... ?

Surprised the Hornets were up at the top......

jw, does the profit include advertising revenues?

Surprised the Hornets were up at the top......

Yea, 28th in value just above Memphis:LolLolLol

The Thunder team evaluation is now $310 million.

PBC purchased this team for $350 million; that was $65 million more than what Forbes had valued them ($285 million) at the time of purchase.

Clay Bennett & PBC sold the WNBA Seattle Storm when they left for $10 million.

I'm looking for this team's value to top $350 million within the next 3 to 5 years.