Big Fundamentals: Assessing Tim Duncan's $300 Million Impact Upon The San Antonio Spurs

Tim Duncan, otherwise known as The Big Fundamental, had a big impact on the financial fundamentals of the San Antonio basketball franchise he played for over the course of two decades.

With Tim Duncan announcing his retirement on Monday, pundits all across the globe will opine on whether Duncan is among the top 10 players to ever play in the National Basketball Association.

What one cannot question, however, is the constant and integral role Duncan had on the franchise’s success over the last two decades over his 19-year career, and how that success propelled the Spurs finances far above markets of similar size who have not tasted the same level of on-court success.

Consider these facts:

• San Antonio is only 1 of 3 NBA markets (Oklahoma City and Miami being the others) with a median household income below $40,000
• San Antonio is the 25^th largest MSA in America, and among NBA cities, the only markets smaller are Memphis (42^nd), Oklahoma City (41^st), Milwaukee (39^th), Cleveland (31^st), and Sacramento (27^th)
  • Apart from Cleveland’s 2016 NBA title, the only other titles coming from this group are Milwaukee’s 1971 title and Oklahoma City’s title as the Seattle Supersonics in 1979
  • Furthermore, apart from LeBron James (Cleveland) and Kevin Durant who recently left the Thunder to join Golden State, it has been decades since these other mid-market teams had a transcendent talent
  • The average franchise value of these teams (excluding Cleveland) is $832.5 M.
    • The Spurs current value is $1.15 B, a difference of $317.5 M.

Regarding the most recent Forbes franchise valuations for NBA teams:

• Every mid-market team above (except Cleveland due to LeBron’s return) is ranked in the lower half of franchise values, with Memphis 25^th and Milwaukee 29^th
• Of the 15 teams ranked in the lower half of team franchise values, only 4 (Philadelphia, Detroit, Atlanta, and Washington DC) would be considered bigger-market franchises, meaning there is a strong correlation between being a mid-sized market and being among the NBA’s least valued franchises
  • 4 of these 11 smaller-market franchises include teams playing in markets (Minneapolis, Denver, Charlotte, Portland, Orlando) which rank between the 16^th and 24^th largest MSAs…all larger than San Antonio
  • And Portland, ranked just inside the top half of franchise values at 15^th overall, is the 23^rd largest MSA…ahead of San Antonio
• There are 7 NBA franchises ranked between the 14^th and 27^th largest MSAs in the U.S. (Detroit, Minneapolis, Denver, Charlotte, Portland, Orlando, Sacramento). Of these teams, only Detroit and Portland have won titles, and only Detroit’s titles occurred within the last 3 decades.  Yet, Detroit franchise value was significantly stunted by the economic downturn of 2007-09, which closely mirrored the team’s on-court downturn.
  • The average franchise value of these 7 teams is $853.6 M
    • The Spurs current value is $1.15 B, a difference of $296.4 M.

While the massive increases in media revenue in the NBA have made even the least valuable teams extremely valuable (the least valued New Orleans Pelicans were worth $650 M, a 19% increase from the year prior, making an estimated $20 M in operating profits), there is no question that San Antonio’s franchise value would be $300-325 M less today if not for the 5 NBA titles earned by the Spurs over  Duncan’s 19-year career (1999, 2003, 2005, 2007, 2014).

While Duncan was by no means a lone ranger behind the Spurs’ successes, he was the catalyst.

He was the leader.

He was and always will be The Big Fundamental.

Without whom, it could be easily argued that the Spurs franchise would not have won 5 titles, and thus, would be worth roughly $300-325 million less than presently calculated.