December 11, 2018

The Milwaukee Bucks Have New Owners

2014/04/21 1:06 am 024 0 comments

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It is hard to believe that someone would invest fresh capital in one of the worst franchises in the NBA. The Bucks are not only one of the bottoms last teams on the NBA standings, but they are in a not so appealing financial situation as well. The team was valued at $405m in January by Forbes, which stands as the lowest in the whole NBA.

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Milwaukee holds the fifth smallest market in the association and a great proof of that is the fact that an average of 13.000 households were watching Bucks games at Fox Sports Wisconsin last year. The club also has one of the oldest arenas in the NBA with its BradleyCenter built way back in 1988 and the best part is that they only get a small portion of all club merchandise that is being sold. Their overall revenue for last year was $109m and they have $60m locked in player salaries.

It doesn’t sound quite as a product that you would like to buy doesn’t it? Now lets see why Wesley Edens and Marc Lasry have decided to make such a venture. First of all you need to consider how is the Collective Bargaining Agreement, voted after the lockout in December 2011, affecting smaller teams. With the CBA the NBA is trying to help all teams make profits. The first step towards this was to reduce the player share of revenue from 57% to 50%. Because of this move low earning teams like the Bucks will receive more than $20m for the upcoming season.

The next big thing for NBA owners is TV rights because the NBA is one of the last places where TV networks can snatch a broadcasting deal. Latest case was the $5 billion deal that the Los Angeles Lakers signed with Time Warner Cable for the upcoming 25 seasons. Low revenue teams can expect to sign contracts of this type, but for smaller amounts in the next year or so.

Globalization is also a big factor for success in the NBA business circles. Last season featured 92 international players from 39 different countries from around the globe. Other professional leagues in the US can’t come near to this number. More than a half of the pageviews on the official NBA web page come from outside of North America. The association is also expanding its business to the Asian market, especially in China where there are tons of ex-NBA players currently providing their services to local teams. Stars like Kobe Bryant and Derrick Rose are considered gods in China and that’s why their jerseys are among top sold items on the NBA store. Just imagine how the presence of only one Chinese player will affect the revenue potential of the Milwaukee Bucks.

Milwaukee has a good chance of a Top 5 pick on the upcoming NBA draft, which is considered to be one of strongest in recent years. So this fresh investment couldn’t come in a better period for the team and for its new owners. The deal still needs to be approved by the NBA commission body.

 

 

 

 

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