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Originally Posted by chumdawg
The last NBA expansion franchise garnered, what, $350MM for the league? Just stop down and ask yourself why businessmen would pay $350MM for the right to lose money year in and year out.
That's really all you need to know, right there, if you will think about it. The NBA is a money-making operation, as of course you would expect it to be if you weren't held to a romantic notion of a diehard owner who wants a championship at all cost.
You can't sell franchises for $350MM if all those franchises are going to do is bleed money.
Let's use some common sense here.
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I think the idea is to break even every year, with the franchise value going up every year. According to "Breaks of the game" in the sixties franchises were sold for $200,000, in 1980 Dallas bought in for the insane amount of $12 million. Today it's at $350 million, in only 10 years it might be $500 million.
So even with Cuban having more expenditures than income year to year, he's still making money, even faster than with real estate at stocks I would think.