The Cavs Continue to Lose Money, Should Fans Be Worried?
The financial status of a team is not something that we as fans ever put much thought into, although it is far more important than we think. The finances for a team will dictate many of their future decisions including who they can re-sign, bring in and in extreme cases if the team will need to relocate. While the Cavs have found plenty of success since the return of LeBron James in the summer of 2014 the revenue hasn’t necessarily reflected it.
The Cavs continue to be one of the teams that lose money year in and year out since the return of James. Now, this could be attributed to several things, but the biggest would be that the Cavs have a very high payroll in a smaller market. While Cleveland is still a rather big market it doesn’t bring in the money that a New York, Chicago or Los Angeles ever will. Even when the Cavs ended the Cleveland championship drought the Cavs still lost $40 million dollars, an NBA high that season.
Once again the Cavs look to be a team that will lose a substantial amount of money as they have far surpassed 2017 NBA Salary Cap Max. Currently, the NBA Salary Cap Max is $99, 093,000 compare that to the total cap allocations of the Cavs which is $139,353,204, and the Cavs are gearing up to lose another $40 million dollars this season. Obviously this is not ideal, however, owner Dan Gilbert has been more than willing to pay the luxury tax for the team, and now with renovations for the Quicken Loans Arena now official, Gilbert should be able to make more money back.
On September 6th the Cavs officially revived the plan to renovate the 22-year old Quicken Loans Arena, while also extending their lease at the arena through 2034. The $140 million dollar project will completely recreate the arena with more dining areas and a glass exterior. This renovation will surely do wonders for the team as it will be able to generate more money for the team. With a renovated arena things like tickets and concessions will go up in price and help generate more money for the team.
While the Cavs have been consistently losing money it hasn’t necessarily hurt them. This offseason they were able to bring in several free agents including recent addition Dwyane Wade. The Cavs got him to sign for the veteran’s minimum not doing much damage to the team’s overall salary.
The Cavs have been the team to beat in the Eastern Conference for the last three years, and doing that does not come cheap. The Cavs will once again lose money this upcoming season, but will also probably end up in the Finals. The renovations for the Quicken Loans Arena will surely help to make the team more money and attract more fans to the arena. While the Cavs are not making the money, they’re having all of the success, which I think we as fans can all agree is far more important.
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Photo courtesy of NBA.com