Part 4/10:
The core issue, David notes, is that operating a sports team involves substantial expenses. These include player salaries, staff, facilities, and other operational costs. While a team might be valued at billions—say, the Lakers at over $8 billion—the reality is most teams are operating at or near break-even points and often lose money annually.
He cites historical data from baseball in the early 2000s, where approximately 20 teams were losing money consistently, and profits were minimal at best. Despite team valuations rising, the actual cash owners could extract was limited because most revenue generated by a team must simply cover ongoing expenses; it isn't profit in the traditional sense.