That statement is the only thing I cannot believable about the Pirate Bay trial.  I hope they win the trial but there is no way they operate at a loss.  My friend operates a website that draws 500000 people per month on average.  With the same or less ad coverage as pirate bay, he earns 1 US dollar for every thousand visitors.  For pirate bay, this equates to 1 thousand dollars for every visitor they have.  They claim 25 million active members, so figure a lower number of 5-10 million per day.  This brings in as high as $10000 per day if I'm staying conservative.  This is not counting donations and likely better ad deals due to the large numbers of people being drawn and time of each person spent on the website (ie, multiple hits by a person per day).  So the amount of money being drawn in per day has a lower limit of 10 grand.  365 days in a year, unless these people are complete morons they should be bringing in at least a million per year gross income.  More likely several million.  With these numbers, if they only get a million hits per day, which is well within everyone's, including piratebay's, estimations, then they would still be making on the order of $365000 per year.  There is no way operational costs equal or exceed this value even if they bought brand new servers every other year, which doesn't seem logical given my knowledge of networking.
Now they might be incorporating expansion costs, ie the new server banks in Russia and other countries, and other related costs to expansion in costs of business when saying they operate at a loss.  Hate to break it to ya, this means they're just spending money they already earned.  So yes, they do in fact earn that much money, they just spend it as fast as they earn it.  
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