Imagine if you took a $100 bill, then threw it into an incinerator. Don’t question why you’re doing it, just do it. Imagine doing that once every minute. Every minute, every hour, every day, every week, every month, for an entire year. With that committed devotion to wasting money over a prolonged amount of time, you could throw away over $52 million dollars… and you could also approximate the financial status of the New Jersey Nets.
Now, to be fair to the franchise, they are not on pace to lose 52 million dollars this year alone. Everything is fine. In fact, they’re not on pace to lose 51 million dollars this year alone. Everything is fine. Are they on pace to lose 50 million this year alone? Um, on that, we have no comment.
Per the SPORTS BUSINESS JOURNAL ($$$), the Nets’ ownership partners made their filings today, and the news is grim:
Forest City Enterprises, the real estate company that owns nearly 25 percent of the franchise but is responsible for 51 percent of the team’s expenses, reported in a Sept. 9 filing with the Securities and Exchange Commission a $12.5 million net loss for the Nets franchise.
Because Forest City is responsible for 51 percent of the team’s expenses, the actual net loss translates to the $25 million over the six months ended July 31. For the same period last year, Forest City reported a $14.4 million net loss in its share of the Nets. No reason was given for the increased losses.
Obviously, this is rough news for a franchise that was - and still holds out hope of being - one of the trendier teams in the league. After all, as the picture above shows, Jay-Z was one of the key factors in moving them to Brooklyn (hopefully, the team name and logo would change as well, because we can’t think of a more boring combination in any sport than these Nets); that plan is still in place for a 2011 move, according to management, though ground has yet to be broken on the Barclays Arena.
Further, this was a team that Bruce Ratner (who also owns the aforementioned Forest City Enterprises) bought for $300 million with Jay-Z just five years ago. So if they’re basically losing 1/6 of the team’s value every year, then that cost of ownership is catastrophically bad. Serious question: are Ratner and Jigga even going to make it to 2011 as owners like this?