LeBron James had what I think is the most sensible reaction to the news that the Sacramento Kings are going to be sold to a Seattle-based ownership group for $525 million, namely to wonder how it is that the owners of the Kings and other NBA teams were crying poverty just last season.
The Kings, after all, are one of the fabled “small market” teams that allegedly can’t make money in these days of sky-high player salaries. The answer to the riddle is that you shouldn’t generally expect sports team to earn a profit. The real value of owning a sports team is that owning a sports team would be fun. And the real financial value of owning a pro sports team is that at the end of the day if you feel like you’re losing too much money on your hobby, you can always sell the team to some other rich guy who enjoys the same hobby. Turning a profit would be nice, of course, but if you buy shares in any company, what you’re primarily hoping for is an increase in their value. Sports teams are just an exaggerated version of that because owning a share in a sports franchise is a lot more fun than owning a share in an office supply store.
