Originally Posted by moremilk
I was referring to the ROI vs the initial investment. The average franchise is probably worth around 500m, based on the prices paid lately for Detroit and GSW. If I invest 500m and I make 10 million a year, that's a 2% ROI which is ridiculously low.
i don't think a franchise on average is worth anything close to 500 mil. GSW sure, profitable team, huge market (although they sold for 450 or so i believe?). I'd guess it's more ~350.
And the 50/50 split won't bring profits, at least according to owners' projections.
Either way, I agree, we are talking incredibly small profit margins here. There are tax exceptions, but still, the system does not really encourage buying teams unless you want to develop an arena or have other secondary benefits in mind.