From Deseret News archives:

Utah Jazz: Playoff payoff? Each home game has big impact on Jazz bottom line

Published: Friday, April 18, 2008 12:33 a.m. MDT
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The Jazz benefited from their run to the Western Conference Finals last season. Fans flocked to snatch up season tickets in record numbers after the 2007 playoffs, helping to put a dent in what they claim will be an inevitable deficit.

That's one of the main reasons the Jazz upped their value according to Forbes by 15 percent — about $45 million, as was reported in the Deseret News in December — from the previous season. Only Cleveland (20 percent), Toronto (18 percent) and Golden State (16 percent) had better valuation increases.

The magazine claimed that the Jazz's first NBA playoff stint since 2003 helped them earn $114 million in revenue for the 2006-07 season and $5.7 million in operating income (earnings before interest, taxes, depreciation and amortization).

According to Forbes,"the playoff run helped the Jazz add close to 6,000 new season ticket holders this year, one of the biggest sales gains in NBA history ... Miller can use the added revenue to help pay the $250 million worth of long-term contracts he doled out in 2004."

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Several months later, Rigby said the Jazz won't have any extra revenue. It's worth noting, however, the Jazz's claimed losses do not include any revenue from concessions at EnergySolutions Arena, which Miller owns. That likely accounts for a good chunk of the difference between Utah's loss claim and Forbes' report that shows revenue gains.

Rigby agreed that the playoffs are valuable — and not just for financial reasons.

"Sports is all about hope, about breeding hope to a community. The excitement and hope (during the playoffs) has a big impact on ticket holders, sponsors and the future years for them wanting to be involved with you," Rigby said. "The community has been great about rallying around (the Jazz)."

For years, it's been rumored that NBA teams pocket about $1 million for each home playoff game. But that figure, Rigby said, is high. For one thing, the NBA takes a 45-percent cut of each home gate during the playoffs (up from just 6 percent per home game during the regular season) to cover its annual expenses.

If a playoff series goes an odd number of games, the visiting team also gets 25 percent of ticket sales from the final game on top of that.

"We share a big part of our gate," Rigby said. "That impacts us."

Franchises also don't get as big of a chunk from TV revenues because of national production and broadcasts. Players and some personnel also receive per-round bonuses for playoff success.

Even with the financial losses — not to mention attractive purchasing offers, which Miller has received — don't count on the Jazz beelining for Oklahoma City or anywhere else. For one thing, Miller loves having an NBA franchise in Salt Lake City — for himself and his neighbors in the Intermountain West. That means the Jazz aren't going anywhere.

Recent comments

The Jazz foul the most but even Hollinger acknowledges that they get...

Moto x | April 19, 2008 at 9:55 a.m.

At the bottom line in accounting terms, it may show a loss. However,...

Dick of the NW | April 18, 2008 at 8:45 p.m.

Utah is very fortunate to have the Jazz. Larry H could have sold the...

Daren C | April 18, 2008 at 1:57 p.m.

Image

With each postseason game played at EnergySolutions Arena, the Utah Jazz make enough money to help pay down the payroll tax for exceeding the salary cap.

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