Visualizing NBA Team Revenue and Valuation Data (2024)

A few days ago, CNBC released their latest valuations of NBA franchises. The data shows the Golden State Warriors with a nearly $2B lead on the Knicks as the most valuable franchise, and biggest revenue earner in the 2023-2024 season.

The Warriors’ move to the Chase Center and San Francisco has clearly earned huge financial dividends, though I can’t help but feel that their departure from Oakland has cost them something spiritually - trading away that blue-collar soul which made Oracle Arena so electric in exchange for more luxury boxes…

Anyways, I thought it would be fun to build some visualizations of this data, so that the information is easy to grasp - the table on the CNBC site is a bit dry, in my opinion.

Visualizations

Valuations

The easiest place to start is with the franchise valuations themselves! This data isn’t super rich, but we can start to explore how it varies across the league and then connects to the revenues earned by teams.

Bar Chart

NBA Team Valuations (2023-2024 Season)

Histogram

Histogram of NBA Team Valuations

Scatterplot

In this chart we build a scatter that shows that franchise valuations have a close and strong relationship with revenue - most teams are valued at 12x their annual revenue. Looking at this multiple is common in investing as a tool for benchmarking comparable businesses.

Franchise Valuation Revenue Multiples

Revenues

A richer place, in my eyes, to dig into the CNBC data is the Revenue and EBITDA data. For those need a quick refresher, EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, and is a good proxy for the “operating profit” of a business. Then , with Revenue and EBITDA known, we can infer Costs.

I thought two really interesting things popped out from these views, both for Los Angeles-area teams:

  1. The Clippers, now the league’s eighth most valuable team at $5.4B, had negative EBITDA of -$114m in the 2023-2024 season and were the only team to run such a large deficit
  2. The Lakers led the league in profit despite trailing the Warriors by about $250M in total revenue, pointing towards a much higher profit margin. I suspect this actually says more about the Warriors than it does about the Lakers, whose overall financial profile is very similar to the Knicks - the Warriors have paid huge luxury tax penalties in recent seasons to field their (expensive) rosters

Diverging Bar Chart

Bar Chart of NBA Team Revenue, Costs, and Profit (2023-2024 Season)

Scatterplot

Scatterplot of NBA Team Revenue vs Profit (EBITDA) in the 2023-2024 Season

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