How to Make a $7 Million Profit Look Like a $28 Million Loss

thought · 06-30-2011, 07:53 PM

Cool look into some of the nifty accounting that goes on behind the scenes. Makes sense that players are treated as capital assets.

Quote:

We've obtained audited financial data for the New jersey Nets covering the three fiscal years from June 2003 to June 2006. Though the numbers end five years ago, you can still see the roots of the argument that will have NBA owners, come midnight, again locking out their players. You can also see how a team makes money and how it pretends not to be making any money at all.

Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

LX · 06-30-2011, 10:12 PM

How does it make sense? They are employees. And their salaries already get deducted as expenses before they get further deductions for depreciation. That's just another scheme for the rich to get richer. Wonderful. Please let me hire a bunch of highly skilled people and then write it all off multiple times while they make money for me. Beauty.

If this strike lasts all season, it's going to leave a bad taste in my mouth. Especially if these assholes try to make out like it's all being done for me as a fan. I don't buy it, and they might just lose me as a fan.

CobraKing · 06-30-2011, 10:32 PM

^^^

I agree LX. These NBA owners expect us to believe that their 'employees' earn more than them? Utter BS.

Granted that some players are heartless and there to collect cheques but there are alot of others deserving of their wages.

XiaominWu · 06-30-2011, 10:51 PM

As soon as players are willing to accept a share of any losses a team might suffer, I'll be wholeheartedly on their side in these matters.

Until then, I think they need to realize that they make a pretty damn good wage.

thought · 07-01-2011, 12:07 PM

Quote:

Originally Posted by LX

How does it make sense? They are employees. And their salaries already get deducted as expenses before they get further deductions for depreciation. That's just another scheme for the rich to get richer. Wonderful. Please let me hire a bunch of highly skilled people and then write it all off multiple times while they make money for me. Beauty.

If this strike lasts all season, it's going to leave a bad taste in my mouth. Especially if these assholes try to make out like it's all being done for me as a fan. I don't buy it, and they might just lose me as a fan.

of course it's a scheme for the rich to get richer; i just think the accounting behind it is kind of interesting. you depreciate an asset to match the expenses to the revenues it earns over the course of its useful life. typically as an asset gets older it gets less productive and a declining balance method of depreciation would reflect that. in that sense players and capital assets are a lot alike. after a certain point in their careers, players get less and less productive as they age. the depreciation would account for that.

based on principle it's fucked. theory wise though i think it's kind of cool.

LX · 07-01-2011, 04:58 PM

It is brilliant in a sense, but entirely evil just like all the schemes that have fucked over the whole economy. I don't know how accounting became such a creative pursuit. It's just so wrong in principle.

And I'm not on the player's side at all. I don't see either side trying to see where the game can be improved. Once again the fans get fucked. Every time that happens it causes me to care less, and be less of a fan. I guess I'm unusual that way, or these guys just refuse to take that into account.

**'trane** · 07-01-2011, 10:58 PM

Lockout official

this article does a pretty balanced job of explaining the 2 sides.

bjjs · 07-02-2011, 10:19 AM

Quote:

Originally Posted by thought

of course it's a scheme for the rich to get richer; i just think the accounting behind it is kind of interesting. you depreciate an asset to match the expenses to the revenues it earns over the course of its useful life. typically as an asset gets older it gets less productive and a declining balance method of depreciation would reflect that. in that sense players and capital assets are a lot alike. after a certain point in their careers, players get less and less productive as they age. the depreciation would account for that.

based on principle it's fucked. theory wise though i think it's kind of cool.

I think it's a reach to treat players as capital assets. Although I don't know exactly how they account for it, it just seems their is no way you can accurately predict a players future production and depreciation. And in the end, one players performance means nothing as far as revenues, it's all about the team.

What it does do is give these teams justification for spending these large sums of money on these players.

Shadowfax · 07-02-2011, 11:14 AM

Quote:

Originally Posted by LX

I don't see either side trying to see where the game can be improved. Once again the fans get fucked. Every time that happens it causes me to care less, and be less of a fan. I guess I'm unusual that way, or these guys just refuse to take that into account.

i'd say you're in the majority my friend

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06-30-2011, 10:12 PM	#2 (permalink)
LX truly truly truly in love with his skin In the Paint Join Date: Dec 2007 Location: Toronto Posts: 25,927 Representing:	How does it make sense? They are employees. And their salaries already get deducted as expenses before they get further deductions for depreciation. That's just another scheme for the rich to get richer. Wonderful. Please let me hire a bunch of highly skilled people and then write it all off multiple times while they make money for me. Beauty. If this strike lasts all season, it's going to leave a bad taste in my mouth. Especially if these assholes try to make out like it's all being done for me as a fan. I don't buy it, and they might just lose me as a fan.

06-30-2011, 10:32 PM	#3 (permalink)
CobraKing thankful that his expectations are low for the Raptors. Member Join Date: Dec 2008 Location: Toronto Posts: 224 Representing:	^^^ I agree LX. These NBA owners expect us to believe that their 'employees' earn more than them? Utter BS. Granted that some players are heartless and there to collect cheques but there are alot of others deserving of their wages.

06-30-2011, 10:51 PM	#4 (permalink)
XiaominWu ------------------------ Senior Member Join Date: Apr 2008 Posts: 3,335 Representing:	As soon as players are willing to accept a share of any losses a team might suffer, I'll be wholeheartedly on their side in these matters. Until then, I think they need to realize that they make a pretty damn good wage.

07-01-2011, 04:58 PM	#6 (permalink)
LX truly truly truly in love with his skin In the Paint Join Date: Dec 2007 Location: Toronto Posts: 25,927 Representing:	It is brilliant in a sense, but entirely evil just like all the schemes that have fucked over the whole economy. I don't know how accounting became such a creative pursuit. It's just so wrong in principle. And I'm not on the player's side at all. I don't see either side trying to see where the game can be improved. Once again the fans get fucked. Every time that happens it causes me to care less, and be less of a fan. I guess I'm unusual that way, or these guys just refuse to take that into account.

07-01-2011, 10:58 PM	#7 (permalink)
'trane on the outside, looking in. giant steps Join Date: Dec 2007 Posts: 16,071 Representing:	Lockout official this article does a pretty balanced job of explaining the 2 sides.