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Orlando Magic Dispute Forbes Profit Estimates

2014 January 23
by Brian Serra

Alex-Martins-UCF

Forbes released their annual NBA franchise valuations recently, showcasing the Orlando Magic valued at a staggering $560 million. Within that report, they also cited an FY13 Operating Profit for the team of $12 million. Josh Robbins of the Orlando Sentinel spoke with Magic President Alex Martins regarding the report issued by Forbes, and Martins disagreed with the published numbers by Forbes.

“The assertion that the Magic made a profit last year is inaccurate,” Martins told the Orlando Sentinel before the Magic played the Atlanta Hawks.

“We did not make a profit last year. We have not made a profit in over a decade. That’s a product primarily of the DeVos’ approach that they’re going to continue to reinvest in the business and continue to reinvest in the product on the floor. But to assert that we made an operating profit last year is completely inaccurate.”

The argument over whether the team turned a profit or not is a classic red herring used by sports franchises throughout time. In general, these franchises don’t exist to create profits for their owners or shareholders. They are long-term investments which have typically balooned over time. See: Magic, Orlando – franchise value jumping $185 million in two years.

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