Above all else, Philadelphia 76ers' owner Joshua Harris is a businessman.
Sure, he probably enjoys going to Sixers' games as much as the next man. But Harris didn't round up $280 million in investment capital just because he wanted the best seats in the house at the Wells Fargo Center.
The 48-year-old Harris has a history of turning around "distressed" properties, and the 76ers were distressed both on and off the court when the Harris-led group officially purchased the team back in October 2011. According to Forbes, that investment has increased nearly 70 percent in the 27 months since Harris signed his name on the dotted line.
In their annual valuation of NBA teams, Forbes recently pegged the net worth of the 76ers at $469 million (with revenues last year of $117 million). While that figure is impressive on the surface, it's important to note that the Sixers are just the 23rd-most valuable franchise in the NBA. By comparison, the New York Knicks are reportedly worth a league-high $1.4 billion (with revenues of $287 million in 2013).
2014 NBA Draft
2014 NBA Draft
Back when Harris acquired the Sixers (in the midst of a lockout, no less), the common thought was that the team was purchased at a bargain: Earlier that year, the 76ers were valued at $330 million. If the franchise's valuation in Forbes' annual survey is used as the sole measuring criterion, the Sixers' value has increased by more than 42 percent in just three seasons.
All in all, it's not a bad ROI for Harris, whose net worth is somewhere in the neighborhood of $2.5 billion. He didn't become a self-made billionaire without a fair share of "outside-of-the-box" thinking, which is why he sunk $330 million into the New Jersey Devils and Newark's Prudential Center last August (much to the chagrin of many Philadelphia sports fans).
In addition to the operational efficiency/synergy that comes with the two teams being so close geographically (case in point: Scott O'Neil serves as the CEO for both franchises), there's plenty of potential upside to owning under-performing professional sports teams in large media markets.
The Sixers' value will never rival that of the Knicks and the Los Angeles Lakers, but once the on-court product improves, there's no reason why a team in the country's fourth-largest media market can't be as valuable as, say, the Oklahoma City Thunder, who are worth $590 million according to Forbes.
The fact that the Sixers operate their very own minor league franchise (the Delaware 87ers) is a huge plus on the balance sheet (though not necessarily on the income statement). Furthermore, once the team's state-of-the-art practice facility gets past the blueprint stage, it'll serve a valuable asset in both the financial statements as well as for the development of the players themselves.
Of course, winning is the biggest boon that any team can have to its bottom line. Unfortunately, 76ers' fans may have to wait a few years before that happens on a consistent basis.
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