I’m not sure how you can profess to be “light-years ahead of probably every other team in structure, in planning, in how we’re going to go about things” and complain about the rules governing the structure and planning that all NBA franchises are subject to, but Golden State Warriors owner Joe Lacob is sure trying.
Lacob will have you believe it’s “very unfair” that the Warriors have to pay escalating taxes in order to keep a championship team together, when his unique ability to rage against that system is the very thing that turned his ownership group’s $450 million investment into a $5.6 billion valuation in the span of 12 years.
The Warriors were coming off a championship and finishing a record-breaking 73-win regular season when Lacob delivered his infamous “light-years” diatribe, and three months later, a one-time 35% spike in the salary cap made it possible for the Warriors to sign Kevin Durant and form the greatest team in basketball history.
(The reason for that cap spike? A nine-year, $24 billion television deal that earned teams an average of $800 million to split between team owners and players. The next TV deal is expected to triple in 2025.)
In between, his team blew a 3-1 series lead to the Cleveland Cavaliers in the 2016 Finals, but that did not prevent the Warriors from drawing at least $359 million in revenue from a roster with a $100 million payroll the following season. That figure rose every year until March 2020, when Lacob informed us that Forbes’ $474 million estimate of Golden State’s revenue — a record-setting figure — was actually “understated.”
“We have much more revenue than the [New York] Knicks and [Los Angeles] Lakers,” Lacob boasted, referencing two teams that also print money every season because they exist in the league’s largest media markets.
That was the first season the Warriors opened their doors at Chase Center, an arena that secured a record $2 billion in “contractually obligated income” before construction was finished. Their own estimates pegged annual basketball-related revenue at $700 million. They did not hit that mark in the first year of the COVID-19 pandemic, when the Warriors laid off 1,720 part-time employees and 10% of their full-time staff, but that figure is estimated closer to $800 million for this past season — another record for the NBA industry.
Not to worry, the Warriors offset any pandemic losses by selling a 5% stake in the team for $275 million.
How much did the Warriors really lose?
Losses can also benefit billionaire owners who use them as tax write-offs against other earnings. There are even ways to disguise gains as losses. Los Angeles Clippers owner Steve Ballmer has reportedly claimed $700 million in losses, even though Forbes lists their profits at more than $200 million since he purchased the team for $2 billion in 2014. The Clippers are the only team paying more luxury taxes than the Warriors.
It is not unlike how Sony wrote off the $3.2 billion that Warriors co-owner Peter Guber allegedly cost them, and then the company invested $275 million into his next venture. (The story of how Guber made a fortune alongside disgraced former business partner Jon Peters is as wild as it gets in the entertainment industry. Neither Guber nor Lacob are free from the scandals that have followed their powerful peers in recent years.)
Sports franchises are not philanthropic ventures for billionaires, even if they can be charitable. They are cash cows. There are reasons why Lacob has “a standing offer” to purchased the Oakland A’s and why Guber has ownership stakes in the Los Angeles Dodgers and Los Angeles Football Club. Follow the money.
Forbes’ estimates are not a full picture of what the Warriors generate beyond basketball. Chase Center sits on an 11-acre plot of oceanfront commercial and residential real estate that the team also owns in the country’s second-highest rental market. That includes a $1 billion, 20-year lease on Uber’s…
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