A while ago, Malcolm Gladwell penned a Grantland story building an impassioned case that it's a bit silly to judge NBA teams strictly as businesses, because they exist in part simply to be fun for their owners. Gladwell describes the "psychic value" of team ownership, which does not show up on balance sheets:
The issue isn't how much money the business of basketball makes. The issue is that basketball isn't a business in the first place -- and for things that aren't businesses how much money is, or isn't, made is largely irrelevant. ...
The best illustration of psychic benefits is the art market. Art collectors buy paintings for two reasons. They are interested in the painting as an investment -- the same way they would view buying stock in General Motors. And they are interested in the painting as a painting -- as a beautiful object. In a recent paper in Economics Bulletin, the economists Erdal Atukeren and Aylin Seçkin used a variety of clever ways to figure out just how large the second psychic benefit is, and they put it at 28 percent. In other words, if you pay $100 million for a Van Gogh, $28 million of that is for the joy of looking at it every morning. If that seems like a lot, it shouldn't. There aren't many Van Goghs out there, and they are very beautiful. If you care passionately about art, paying that kind of premium makes perfect sense.
Pro sports teams are a lot like works of art.
There is earnest work going on these days to figure out how to make NBA teams function as businesses. One of the people on those front lines told me Gladwell's article so disgusted him that he could not even finish reading it.
This is not, I have been told, how those on the inside see owning an NBA team.
Then I ran across this passage from Cavaliers' owner Dan Gilbert. As a CBA Hawk, the Quicken Loans chairman is said to be pushing Stern to drive a hard bargain, presumably because he wants to run his team as a business and not as a work of art.
Or so you'd think.
But look at this 2005 quote from Gilbert, in Terry Pluto and Brian Windhorst's book "The Franchise":
To me, NBA franchises are like pieces of art. There are only 30 of them. They aren't always on the market, especially a franchise that would have been such a natural fit ... If you just looked at the Cavaliers in terms of revenues, profits and balance sheets -- and you paid this amount for it -- people would say "You're insane! You're nuts." But if you look at all the tentacles, the impact on our other venues, it makes tremendous sense. We have now opened a Cleveland office [of Quicken Loans] and that's tremendously successful. Our employees love it that we're associated with the Cavs and can come to games -- that helps us attract and keep better people. There are a lot of non-profit things that can be done with pro sports. It brings an unbelievable amount of excitement.
I don't intend this as a big ol' gotcha. Certainly plenty of owners are business-minded, and they have every right to be.
But whether it's 28 percent, or some other number, the psychic value of owning a team is certainly not zero -- and that art analogy isn't going away.