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Report: Cavaliers lost $40 million last season

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Jemele Hill and Michael Smith weigh in on LeBron James' decision to publicly call out the Cavaliers for not getting players that he wants. Considering that the team has the highest payroll, Hill doesn't understand it.

LeBron James is reportedly frustrated that Cavaliers owner Dan Gilbert, after promising unconditional spending to lure back LeBron in 2014, is keeping costs down this season.

The simplest retort: The Cavs have spent more than any other team.

Cleveland has the NBA’s highest payroll for the second straight season and is on track to pay the luxury tax for the third straight year. This season, the outlay on players is in line to be $154,616,543 –$127,519,873 in salary and $27,096,670 in luxury tax.

In addition to paying Tyronn Lue to coach, the Cavaliers are also reportedly still paying fired coaches Mike Brown and David Blatt.

Kurt Badenhausen of Forbes:

Gilbert’s massive commitment to spend whatever’s necessary to win a title led to a loss of $40 million last season by Forbes’ count in the sense of earnings before interest, taxes, depreciation and amortization.


Even with the massive influx of new national TV money this season, the Cavs are likely headed for another huge operating loss.


An anonymous source convinced Jason Lloyd of the Akron Beacon Journal, Joe Vardon of Cleveland.com and Dave McMenamin of ESPN the losses were even higher. Lloyd pegged it closer to $50 million.

But that’s not the whole story.

How much more valuable is the franchise because it has LeBron on it? The overall worth of the team is not captured in these annual profit reports.

How much more are naming rights to the Cavs’ arena worth with LeBron there? Those naming rights are held by Gilbert’s primary business.

How much more business does the casino next to the arena in Cleveland do as a result of LeBron? That casino is also owned by Gilbert.

How much does LeBron’s presence help get taxpayer funding toward $140 million in arena upgrades? Gilbert operates the arena and owns minor-league hockey and football teams that also play there.

Simply, LeBron helps Gilbert earn money in numerous ways -- even if the Cavaliers lose money on paper.

Does Gilbert, after reportedly promising unconditional spending to get LeBron back to Cleveland, want to mess with this arrangement while trying to save on the margins?

Just ask the Heat how that turned out.