http://sports.yahoo.com/nba/news?slug=ap-f...p&type=lgns<div class='quotetop'>QUOTE </div><div class='quotemain'>NEW YORK (AP) -- The New York Knicks are the NBA's most valuable franchise despite nearly $40 million in operating losses last season, according to a list compiled by Forbes. The Knicks topped the list for the second straight year with a value of $592 million, up 9 percent from the previous year. They had an NBA-high $185 million in revenues for the 2005-06 season, but also topped the league with losses of $39 million.New York had a payroll of more than $120 million, easily the NBA's largest, while going just 23-59 last season. The Knicks paid coach Larry Brown about $10 million for that season, then paid him another $18.5 million in a settlement after firing him with four years remaining on his contract. Though Madison Square Garden chairman James Dolan said earlier this season that "it's never OK to lose business," he pointed out that the Knicks represented only about 3 percent of the total business of parent company Cablevision. The Los Angeles Lakers were second at $568 million, while the Dallas Mavericks had a 15 percent jump after their first NBA finals appearance and were third at $463 million. Chicago ($461 million) and Houston ($439 million) rounded out the top five. The complete Forbes list will be appear in its Feb. 12 issue.</div>How does an organization that lost 40 million over the past year increase their value by 9%. What is it that I am missing?
<div class='quotetop'>QUOTE (Diawsome @ Jan 25 2007, 07:28 PM) <{POST_SNAPBACK}></div><div class='quotemain'>I guess that would do it, I was assuming the 40 million was a net loss </div>It was a net loss. L_C is, well, wrong. No offense to him.It's somewhat hard to explain if you don't understand economics, the market, or the sort. Imagine it like a stock. The value of the stock is somewhat independent of the company itself. All it means when they say that its value has increased is that if they sold the team today, it should sell for about 592 million.An easier example would be the Mavs. When Mark Cuban bought them, he paid 285 mill for them. They now (according to that article) are worth 463 mill. That doesn't mean that they have made 180 odd million off tickets or whatever since he bought them. It just means that they have increased the value of the team, whether it be through assets, the team itself, media, or whatever. The team is just worth a lot more now. Make sense?Now you have to think sideways and understand how NY could be worth more. It is indeed confusing, but perhaps it is because they have acquired more assets. Maybe people think that NY is safer now, thus more secure for a franchise. Who the hell knows, but the team is worth more.
