The NBA Lays Off

October 14, 2008

In anticipation of lower ticket sales, the NBA has announced that it is laying off 9% of it’s workforce.

Nine percent is such an exact number (“about 80 jobs”), it seems odd, but what’s more interesting is that the NBA is supposedly laying off people before they even know sales will be down. Businesses that lay people off as soon as they experience a bad quarter are poorly run ( and I know that includes a big chunk of the Fortune 500), but businesses that are run so poorly they have to lay off before they hit a financial bump?

It means either the NBA is run so poorly that they are nervous about folding in the face of any financial hardship and have no cash reserves OR…the NBA hasn’t been doing financially well for a while. I’m going to take a stab in the dark and say that over the past fifteen years, the NBA has stocked their rosters with early entries and high school players, suffering worse and worse ratings, declining revenues and now…one the eve of the possibility of lower ticket sales (which doesn’t include, ahem…the tv deal, which is the big revenue generator)…they are running to cut expenses.

I think the NBA is in trouble. It might be time for them to think about deeper changes than just having the players wear suits on the bench.