Trade & FA 2024-25:

[SleepingHero]

This may be shouting into the abyss, but...

Has anyone ever done a comparison of player salary vs. revenue generated?

Embiid's extension averages $64.33M/year. That's about $784.5K/game. I have no idea how or if this affects the PHL tax situation.

Does the incremental revenue received over an average replacement validate the investment? Or more basically, does he (or any max $$$ level player, Luka included) generate enough basketball-related revenue to cover their salary? Are they, in effect, taking revenue generated by lower status players as compensation for perceived "star power"? Is their "worth" an artificial construct based on marketing and an owner's desire to be perceived as a "winner"?

I realize that this sounds somewhat Marxist, but my compensation is based on the value I bring to my company through increased revenue or improved margins. Real world measures that are then added to non-numerical evaluations (working safely, plays well with others, responsive to customers, etc.) to determine a value to the organization. Plus, it's the time of year when I have to do all this for my team in preparation for next year, so I'm in that frame of mind.

I guess the only commonality is that both organizations value retention of skills and experience, so (in theory) compensation has to be competitive with similar positions in the marketplace. Only professional contracts are usually public knowledge, so it's easy to compare between teams. Private business, not so much other than broad generalities.

Without access to Philly's records, it's hard to accurately gauge the true ROI a star player has on a team. But we can get close. 

NBA teams income comes from merchandise, concessions, ticket sales, but most importantly advertising and broadcast rights. 

The current deal this past year brought in an estimated 2.6 billion dollars. That alone split amongst the 30 teams is about 87 million per team. 

On top of that, there are licensing rights with Nike that brings in an additional 1 billion per year. (https://www.espn.com/nba/story/_/id/1305...-deal-nike). That's another 34 million per team. So just from broadcast rights and licensing, each NBA team is making about 125 mil rounded. 

These deals are only valuable because of star players that people want to watch. Philly has 21 nationally televised games which is 7th in the league for next year. Meaning they are a marquee draw for the league. 

Now we add in tickets+concessions. Philly was number 3 in the NBA in terms of attendance with an average of 19,218 seats filled, basically 95% filled every night according to ESPN. 

A Sports Media company called OhBets ran a study on the average ticket cost, concessions, and parking for each team so we'll use that as reference. The average ticket according to them (I couldn't find a median price) was $264. For concessions lets tack on another $15.28 per person (price of 1 beer and hot dog) and we'll add in parking for $30. That brings our total cost for an average ticket for 1 person at $310. At that price this means each game brings in about ~6 mil for the 76ers. A total season of 41 games would be $244 mil. A website called statista has PHI 2022-23 season revenue listed at a total $376mil. If we add in our broadcast rights+ticket sales we're pretty close to that. Then we factor in merchandise and jersey sponsorships and we're pretty close to that ~$380 mil estimate. 

Now lets compare this to a bottom dweller team with no marketable stars. Charlotte! They ranked 29th in total attendance by number at 17,358 according to ESPN, but their stadium only fills 17,500. According to the Charlotte Observer quoting that same OhBets study, the average ticket cost was $169. The price of a beer and hotdog was $14.08. And parking was $15. That brings the total for 1 person at $198.37. At that price each game would bring in ~3.5 mil, and an entire season they'd make $141 mil. 

That is nearly a 100 mil difference. The total difference in ticket sales per game is about 1860 (with only 142 being unsold seats). Let's just say CHA builds an extra 1860 seats, even then they'd only make an additional 15mil. Add in merchandise (Lamelo Ball was their best selling jersey which was 13th), I'll venture to say the difference having a star player is about $100mil a year. 

So Joel Embiid is worth easily his contract and PHI gets a positive return just by having him on the team.