Jerry Reinsdorf purchased the Chicago White Sox for $19 million in 1981. Four years later, he bought the Chicago Bulls for $16 million. The two teams have won a combined seven championships for the city since Reinsdorf took over, though six of those can be directly attributed to a player he inherited, a fire-breathing dragon known most commonly as Michael Jordan.
Under Reinsdorf's watch, the Bulls have become a bulging cash cow, the franchise some estimate as the league's most profitable. A 2012 report in Forbes said eight NBA teams made over an average of $15 million in operating revenue over the last five seasons, with the top five teams averaging $37 million in profits. Forbes estimates the Bulls have pulled in $55 million per year, more than any other team over the same time frame.
Doug Thonus projects Reinsdorf has made over $1 billion off the Bulls, and it doesn't seem off-base (via B-a-B). The Bulls make money, lots of it. What's distressing for the fanbase is Reinsdorf's steadfast refusal to pay the luxury tax and help put the Bulls in the best position to win their seventh title. While less profitable teams like the Dallas Mavericks spend money to win championships, Chicago plays under self-imposed restrictions. In 2010, Dallas spent $93 million to win the title, when the dollar-for-dollar luxury tax was set at $70 million. The most recent Forbes report had the Mavs losing $3.7 million for the season.
The Bulls have never paid the luxury tax under Reinsdorf, though they are currently slated to for the first time in the upcoming season. Remember, the tax is assessed after the season ends, so just watch as the Bulls deal Rip Hamilton at the trade deadline to avoid paying the penalty.
Meanwhile, Reinsdorf's beloved White Sox continue to spend as attendance wains. The Bulls have essentially sold out every game for over two decades at this point; the Sox struggle to break the top 20 in attendance. While the Bulls annually limit their own payroll to about $70 million, the White Sox have spent at or near $100 million multiple times. In 2010, the Sox traded for starter Jake Peavy, who was set to earn around $17 million per year for the next two seasons, while the right-hander was on the disabled list. Could you ever image Reinsdorf signing off a similar deal for the Bulls?
It's tough to say how the White Sox do financially, but it's no secret they aren't nearly as profitable as the Bulls. It's also no secret which team Reinsdorf prefers. Reinsdorf grew up in Brooklyn idolizing Jackie Robinson's Dodgers and once said he would trade all six Bulls championships for one White Sox title before his baseball team eventually got the job done in 2005.
I've joked for years about the Bulls subsidizing the White Sox, and the joke becomes easier and easier every season. The Bulls always find a way to skirt a tax payment. Reinsdorf has long maintained he'd pay the tax for a "winner", but he's the one who decides what constitutes that.
It's difficult not to look at the team the Bulls have put out the last two seasons as a "winner". After all, they've won more regular season games than any team in the NBA over that period. Still, when superstar guard Derrick Rose tore his ACL in the first round of the playoffs against the Philadelphia 76ers, ending Chicago's title hopes on contact, Reinsdorf had backed into another out. The moves the Bulls have made this offseason have been about one thing: the bottom line.
Kyle Korver, Ronnie Brewer, C.J. Watson and Omer Asik each could have been retained this offseason by an owner more committed to his basketball team. All but Asik would have been back on one-year contracts, giving the team plenty of flexibility moving forward. Instead, the Bulls let all of them walk for nothing in exchange, save for a $5 million trade exception the Bulls likely won't use acquired from Atlanta in the Korver deal.
It's this easy: with Rose out, the Bulls don't believe they have to spend. It amounts to pouring salt on the fanbase's open wound. The Bulls made no attempt to get better this offseason, they have only tried to save money. The Bulls are really good at saving money. Remember that the first time Vladimir Radmanovic bricks a three, or when Nazr Mohammed gets into early foul trouble. It didn't have to be this way. The Bulls tied their own hands.
This bit of context may have been a tad long-winded, but I think it's essential to understanding a deleted tweet from the White Sox's official account last night. The tweet wasn't up for long, but a few people were able to quote it before the White Sox realized how foolish it was.
The White Sox actually put this out there on Tuesday:
Is the Bulls account going to RT this? RT @whitesox:"Basketball is a game. Baseball is a religion. Baseball is American." - Jerry Reinsdorf— James Fegan (@JRFegan) July 24, 2012
Basketball is so un-American.
The simple fact is that Jerry Reinsdorf should sell the Bulls if he can't run them like the big market bully they deserve to be. Even the Houston Rockets paid the luxury tax last season, and they had major attendance issues and didn't make the playoffs. The Bulls' profits don't just justify paying the tax, they justify going deep into the tax each and every season. This is the competitive advantage the Bulls have as a wildly profitable big market team, but they refuse to use it. They think they're the Bucks or the Pacers. With luxury tax penalties set to become far more punitive next season, do you think this will change any time soon?
It won't. Reinsdorf will keep turning major profits off the Bulls but won't take the next step in helping turn the club into a title contender. Baseball is his love, basketball is how he makes his money. The most sad thing of all is that the NBA is rapidly turning into baseball in one sense: it's haves vs. have nots, with only a thin slice of teams being able to compete. The Bulls are a 'have', but they refuse to act like it.