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Forbes paints a murky financial picture for the Denver Nuggets

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The financial numbers weren't great for the Nuggets in 2014-2015

Mark J. Rebilas-USA TODAY Sports

Every year Forbes.com posts team valuations and varying financial statistics to help paint the picture of an organization's financial health. Each year the stats lag for one season so when this year's list was released it was based on the 2014-2015 season. The Denver Nuggets financial performance improved according to Forbes, however there are several concerning figures that present a less than optimistic picture of the team, couple that with the knowledge that next years numbers will be generated on NBA worst attendance and continuously declining viewrship and there is certainly cause for concern.

Unlike the Brookyln Nets, Denver did not operate at a loss

The best news to come out of the Forbes article was the Nuggets conitnued to increase their operating income. While operating income does not take into account interest expenses and taxes, the Nuggets reported OI of $23.6 million makes it clear the team did not lose money on the 2014-2015 season. They also continued to see an increase in OI for the third straight year and put another year in between the dreary recession times that saw most of the NBA operating at a loss. However, there's little to get excited about beyond this and even the jump in operating income can be largely explained due to a decrease in player expenses rather than an increase in revenues which saw just shy of a 3% increase from the previous year.

All teams in the NBA are valuable,  but the Nuggets are stagnating

When looking at how Forbes reaches a team's value, it's clear the Nuggets biggest asset is their right to the revenue that is shared across the NBA. Teams such as the New York Knicks, Los Angeles Lakers and Boston Celtics are making hand over fist on TV revenue and Forbes has attributed their values largely to the revenues their market generates (and the value of the arenas which sit in that market) as well as the "brand" value of the team. The Nuggets however make up the majority of their value through revenue sharing, then through the Denver market and the Pepsi Center. It's no surprise that the least of the Nuggets value is generated by their brand.

Perhaps the most concerning portion of the entire Forbes breakdown is that the Nuggets were one of only four franchises to see the value of their asset fail to appreciate. After 2014 saw major jumps in virtually all NBA team valuations due to the bar set by Steve Ballmer's $2 billion purchase of the Los Angeles Clippers, the Nuggets value increased by less than a percentin 2015. The only other teams to see a similar fate were the Atlanta Hawks, New Orleans Pelicans and Philadelphia 76ers. All three of those teams were involved in ownership changes in the past five years and there have been rumors swirling that Philadelphia, a team who outright told their fans they planned on delivering an inferior product, are again up for sale. While there's been no indication of the Kroenke's having any desire to sell the franchise, the basic economic principle of sell high could drive ownership's motivations if the team were to see repeated stagnant increases in equity.

Ticket prices have to become more reasonable

Despite fielding a team that even management acknowledged was not likely to complete for the playoffs, the cost to attend a game at the Pepsi Center was the thirteenth highest in the Association. Our own Andrew Feinstein has been perhaps the most vocal here at the Stiffs about the less than stellar approach the Nuggets marketing department seems to be taking to generating fan interest and one has to believe that with ever declining viewership on Altitude and dead last attendance numbers from the 2015-2016 season changes in the way Denver approaches marketing and fan interest are going to change.

Fan interest obviously helps drive revenues and even smaller market teams such as the Oklahoma City Thunder, Portland Trail Blazers and the Utah Jazz were given significantly larger valuations to their markets in comparison to Denver. This is likely due to the fact that these markets feature far larger fan interest which generates revenues both at the box office and through the television. Each of those teams were in the top half of attendance and also benefit from being the only professional sports team in town of the big four leagues. While the Nuggets will likely never capture the TV audience that the Denver Broncos can command in the Denver market, they can strive to make games more affordable and create a better fan experience like the Colorado Rockies have to help bring fans to the arena. Snatching a big name player in the draft, free agency or via trade also wouldn't hurt.

Bottom line, nobody's losing money, but financial performance could be waning

While it may sound like the Forbes article showed the Nuggets to be in dire financial straights, that's not really the case. Yes the 0% increase in value is alarming, as is the declining revenues from gate receipts and television viewership. Still, the Nuggets value landed at $855 million, good for 21st in the league and substantially higher than the price the Kroenke's paid for the franchise back in 2000. Additionally, despite increases in revenue beginning to curb over the past few years, the team has managed to likewise curb expenses and keep the organization profitable. If you throw in all the other workings of Kroenke Sports Enterprises, the "company" as a whole appears to be fiscally healthy and it seems unlikely ownership will change hands anytime soon. However, make no mistake the Nuggets shouldn't stand pat, in order for the team to start to appreciate in value in a fashion closer to the rest of the league, they'll need to find a way to start regaining the fan interest (and by extension revenue) that has been sharply declining over recent years.