If no regular season games are played, projections puts the financial loss for the league around $500 million. No playoffs would be at least $500 million more. Adam Silver said that Daryl Morey’s Hong Kong tweet came with a $400 million price tag. Roughly $1.5 billion of potential losses would justify cutting wages and benefits, yet NBA owners are getting a lot of criticism for trying to do just that.
The Philadelphia 76ers announced plans to cut employee pay by 20%, arguing the financial pressure COVID-19 put on their cash flow. First Joel Embiid, their star player, shamed them with a generous announcement that he would cover the 20%. Then fans got involved and 76ers part owner Josh Harris quickly backtracked the decision. Let’s not be naive, if the 76ers got away with it, other teams would follow. In a time when everyone is hurting and lives are at stake, billionares complaining about losing millions exposes their lack of touch with reality.
A little advocating for the devil here – when you read that someone’s wealth is estimated to be $2 billion, that doesn’t mean they have $2 billion in their account. It’s an estimated value of all they own: houses, NBA teams, companies. Most of their assets are in publicly listed companies that sustained a significant hit, a lot of those bussines take out loans based on their stock valuations that verly likely plummeted.
Take Tilman Fertitta for example. His entire wealth is in the service industry: hotels, casinos, restaurants, amusement parks. Almost all have been closed, no cash is coming in. He didn’t pull a Balmer and just cash out for the Rockets (Balmer by the way, did have $2 billion in a bank account). Fertita had only 300 million in cash, and paid 2.2 billion for the Rockets. How did he do that? Fertita basically put up his entire bussines as colateral.
“The bond sale will be used for the $1.75 billion of equity Fertitta is using to buy the Rockets, along with $175 million of assumed debt and a $275 million loan from Leslie Alexander, the seller of the NBA team.”Forbes.com
So it’s quite possible some owners are having significant financial problems we don’t know about. All that being said, they should pay all their workers and take the hit themselves. Worst case scenario, they stand to lose a company or two – their workers stand to lose a roof over their head and health insurance. The math is clear here. But, how many Fertitas do we have amongst owners?
Forbes made a list of the top 20 wealthiest owners in the NBA. The criteria were they have to own at least 20% of the team to make the list. Here’s who they are, their estimated wealth and how they made their money.
1. Steve Ballmer (Los Angeles Clippers): $51.4 billion
Ballmer scored a huge win this week for his dream of building a new arena. He bought the Forum for $400 million from the Madison Square Garden Company, which tried to block a new Clippers arena near the Forum in Inglewood, California.
2. Philip Anschutz (Los Angeles Lakers): $11.2 billion
Anschutz owns one-third of the Lakers, plus the arena in which they play, the Staples Center, in addition to the NHL’s Kings.
3. Stanley Kroenke (Denver Nuggets): $10 billion
The real estate and sports mogul owns teams in the NBA, the NHL, the NFL, MLS and the Premier League.
4. Joseph Tsai (Brooklyn Nets): $9.9 billion
The cofounder of Alibaba Group completed his purchase of the Nets last year for $2.3 billion and bought the Barclays Center for an additional $1 billion.
5. Robert Pera (Memphis Grizzlies): $7.1 billion
Pera owns nearly three-quarters of wireless equipment maker Ubiquiti Networks. He was the lead investor in the Grizzlies purchase in 2012.
6. Daniel Gilbert (Cleveland Cavaliers): $6.2 billion
Gilbert made his first fortune from Quicken Loans, the largest online mortgage lender, which he cofounded in 1985 at 22 years old.
7. Tom Gores (Detroit Pistons): $5.7 billion
Gores and his brother Alec are both private equity billionaires. The Pistons opened a new $90 million headquarters and training facility in September.
8. Micky Arison (Miami Heat): $5.3 billion
Arison’s net worth plummeted 33% over the past six weeks with the collapse in the stock price of Carnival Corp. The world’s largest cruise ship operator was founded by Arison’s father in 1972.
9. Tilman Fertitta (Houston Rockets): $4.4 billion
Fertitta furloughed roughly 40,000 employees at his casino and restaurant empire to curb the economic impact caused by coronavirus-induced shutdowns. His fortune is derived from his ownership of the Golden Nugget Casinos and Landry’s, a Texas-based restaurant and entertainment company.
10. Mark Cuban (Dallas Mavericks): $4.3 billion
Cuban was one of the first sports team owners to commit to paying hourly arena workers for games missed during the coronavirus crisis. He’s invested more than $20 million as a “shark” on ABC’s popular Shark Tank show.
11. Joshua Harris (Philadelphia 76ers): $3.7 billion
Harris cofounded private equity powerhouse Apollo Global Management in 1990 with fellow billionaires Leon Black and Marc Rowan. He remains a managing director there.
12. Gayle Benson (New Orleans Pelicans): $3.2 billion
Benson inherited the Pelicans and the NFL’s Saints when her husband, Tom, died in 2018.
13. Glen Taylor (Minnesota Timberwolves): $2.8 billion
His printing firm, Taylor Corp., generates more than $2 billion in revenue annually. Taylor also owns stakes in Minnesota’s MLS and WNBA teams.
14. Herb Simon (Indiana Pacers): $2.6 billion
The real estate mogul bought the Pacers with his since-deceased brother, Melvin, in 1983, for $10.5 million. Simon Property Group is one of the world’s largest real estate investment trusts, with 206 properties in the U.S.
15. Antony Ressler (Atlanta Hawks): $2.4 billion
Ressler cofounded private equity firm Ares Management in 1997. He owns a small piece of the Milwaukee Brewers, in addition to his controlling stake in the Hawks.
16. Michael Jordan (Charlotte Hornets): $2.1 billion
The NBA’s GOAT sold a minority stake in the Hornets in September in a deal that valued the team at $1.5 billion. Nike pays Jordan more than $100 million annually based on growing sales for the company’s Jordan Brand.
17. Marc Lasry (Milwaukee Bucks): $1.8 billion
Lasry, a hedge fund titan, joined Wes Edens to buy the Bucks in 2014 for $550 million. He was born in Morocco and moved to the U.S. at age 7 with his family.
18. Gail Miller (Utah Jazz): $1.7 billion
Miller transferred ownership of the Jazz in 2017 to a family legacy trust to deter her heirs from selling or moving the team. Gail and her since-deceased husband, Larry, bought the team for $22 million in 1986.
19. Jerry Reinsdorf (Chicago Bulls): $1.5 billion
Reinsdorf led a group of investors who bought a controlling stake in the Bulls for $9.2 million in 1985. Good timing. It was one year after the team drafted Michael Jordan, who led the Bulls to six NBA titles. The team is now worth $3.2 billion.
20. Theodore Leonsis (Washington Wizards): $1.4 billion
Leonsis initially built his fortune as a senior executive at AOL, before investing in sports teams like the Wizards and the NHL’s Capitals.