FanShot

Nate Silver: Calling Foul on NBA's Claim of Financial Distress

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[From the FanShots. Trying to balance lockout and non-depressing news here, but here's the former. Since this was published, the NBA has responded, and SBNation's Tom Ziller responded back -ed.] "The N.B.A.’s operating margin (operating income divided by revenues) was about 5 percent in 2009-10 and has been about 7 percent during the life of the current labor deal. A 5 percent or 7 percent profit is not dissimilar to what other businesses have experienced recently. Fortune 500 companies, for instance, collectively turned a 4.0 percent profit in 2009 and a 6.6 percent profit in 2010 (both figures after taxes). Profit margins in the entertainment industry, in which the N.B.A. should probably be classified, have generally been a bit lower than that. So why are N.B.A. owners seeking such significant reductions in player salaries, reportedly to about 45 percent of league revenues? The simple reason is that they think they can" There's a lot more in the article.
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