A losing streak for the ages. A roster of D-League players. A batshit-crazy owner. Doesn’t matter. The Cavs are making money hand over foot like never before. How?
Their expenses are way down, having stayed under the luxury tax bar this year after James, Shaq, and others left. At the same time, all their revenue streams were locked in for this year regardless of what the roster looked like. Season ticket holders had to renew their seats by May — long before LeBron’s decision — and few, if any, gave up their seats. Add in a supremely lucrative local TV contract with Fox Sports Ohio — worth $25 million a year — that was signed a few years ago, and you have the recipe for a highly successful business even if the product sucks.
This article appears in Feb 9-15, 2011.
