No doubt the lockout is going to hit every owner’s pockets in some way. Well, at least they would have you believe it is not.
There is a lot of information and misinformation regarding the owners’ financial state. Many owners seem to think they will make money (or lose significantly less) if the whole season is canceled. And there is a good chunk of owners who seem to feel the season should be saved at almost any cost to avoid massive losses from an empty season.
While only the players and owners have actually seen the books and could tell you how much the owners actually make or lose — and they would dispute what those numbers mean too.
TiqIQ tried to calculate the amount teams would lose on the secondary market because of lost ticket sales during the lockout. To no one’s surprise, big market teams like the Lakers and Knicks stand to lose the most money. As Ira Winderman of the South Florida Sun Sentinel often suggests, Mickey Arison and the Heat don’t want to see a lost season with the LeBron James/Dwyane Ward/Chris Bosh trio all in their prime.
The Magic though? They stand to lose $6.7 million if the lockout cancels the season. That is ninth in the league. And arguably Orlando is the smallest market in the top 10, a signal of both Orlando’s massive payroll and its shiny new arena.
The NBA as a whole could lose $184 million in ticket sales TiqIQ calculates should the lockout be as bad as everyone seems to think and cancel the 2011-12 season.
TiqIQ calculated these potential losses by dividing the average attendance for 2010-11 by 10 and then multiplying it by 41 and then by the average ticket price in 2010-11. For the Magic, that is 18,972 average attendance and an average ticket price of $85.99. That is quite a significant loss, although obviously nowhere near what Miami stands to lose.
And, of course, this is just tickets and does not include any potential loss of revenue from merchandise or concessions. And this formula seems to minimize the effects of suite purchases — which is really what teams care about to fill their coffers. It also should be noted continually that this research involves secondary ticket markets. That covers only a portion of season ticket sales and embraces the popularity of teams in the ticket price.
This chart shows more the major divide between big and small market teams. Teams in larger markets, this data suggests, stand to lose much more money from a lost season than small market teams. Those teams are not making much money from ticket sales because they are not selling out even when there are games, theoretically driving the prices in the secondary market even further down.
According to TiqIQ, the Timberwolves would lose only about $2.9 million in the secondary ticket market if the season were canceled. The Pacers, Bucks, Hornets, Grizzlies, Nets and 76ers would all lose between $3 and $4 million on the secondary ticket market. These collection of teams show somewhat the divide facing NBA owners in these negotiations.
The Magic are squarely caught in the middle. It is hard to decipher where Rich DeVos might stand. These numbers suggest he would be in the “Let Them Play” party.
Chart via TiqIQ.com.