Owning an NBA Franchise no longer a license to print money.

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here was a time when owning and NBA franchise (or really most professional sports franchise) was seen as a can’t-miss proposition.

For a couple decades starting in 1980, the expansion of ways to make money on sports (fueled by the rise of cable television, new stadiums with luxury boxes and a society more accepting of advertising at every turn) meant that even if your team just broke even year to year on the balance books, the overall valuation of the franchise was skyrocketing. You just needed to hold on for a few years and when you sold you were paid handsomely, much more than you paid to own the team in the first place.

But with the value of NBA franchises so high now — there are varying reports depending on debt taken on, but the official value of the Bobcats purchase was $275 million — things are different now.

Henry Abbott has a fantastic post at TrueHoop, talking with George Postolos (who was in the running to buy the Bobcats and owns a consulting business to help people buy teams), and the upshot is that with the prices of franchises so high you get a different kind of buyer.

No question, but today in 2010, buyers are not looking for that as much. There’s a narrower set of considerations. But generally speaking, they’re looking for a good business with an opportunity to make money, in addition to those other considerations. That may not have been the case in a frothier environment, or when teams were less expensive. I mean, a lot of these families, the Millers in particular, when they acquired their teams the franchises didn’t trade for hundreds and hundreds of millions of dollars.

As the numbers have gotten bigger, a smaller set of investors are able to meet those requirements, particularly after what our economy has gone through over the last few years. Those people can be more discriminating, and they’ve become more discriminating, and they’re looking for a legitimate business with a legitimate chance of a return on their equity.

There’s still an upside case for sports franchises, but it depends on the particular situation, and it depends on skilled ownership and management. They’re more important than they’ve ever been.

Read the entire article, it’s a fascinating insight into team ownership today. It’s still a money making venture, but now you have to be smart. You can’t just coast to profits.

Cavaliers have three choices with Kyrie Irving. And no rush decide on one.

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There were a lot of questions around Kyrie Irving‘s unexpected decision to tell Cleveland he wanted to be traded.

The first was why? He reportedly wants out of LeBron James‘ massive shadow, to “be the man” with another team. It also strikes me as a preemptive move — LeBron could leave next summer and Irving wanted to be in control of his own destiny rather than deal with the “is LeBron leaving roller coaster” for a season.

Next was “why now?” This is harder to find a good explanation for. Back in June, Irving talked about staying with LeBron and finding ways to beat the Warriors, a month later he wants out. It has to be frustrating for the Cavaliers front office, if Irving had told them this back at the start of free agency Cleveland might have been able to land Paul George or Chris Paul.

Finally, the question settled on Cleveland and what will they do?

They have three legitimate options.

1. Do nothing and keep Irving. The Cavaliers do not have to trade him — Irving has two years left on his contract, and the Cavaliers have leverage. Cleveland could take notes from the Lakers after Kobe Bryant’s trade me demand circa 2007 — Los Angeles told him they were looking but not move him, and eventually smoothed things over (and won a couple more rings).

It may be a lot harder for the Cavaliers to do that. How deep is Irving’s dissatisfaction run? Can LeBron and Irving mend fences? Or is the discord in Cleveland too great right now to smooth things over? Usually winning can cure all ills, and the Cavaliers should win plenty again. Then again, star players in the NBA usually get their way so if Irving really wants out…

2. Trade Irving for players to help them chase a title next year. My guess is this is the direction the Cavaliers will go. Why? Because Dan Gilbert looks at his franchise valuation since LeBron’s return and wants to keep him, and if the Cavaliers can get another ring (or at least look like a more serious threat to the Warriors) he’s far more likely to stay.

Because Irving does not possess a no-trade clause, the Cavaliers are not forced to send him where he wants to go (unlike Carmelo Anthony). Irving wants to go to San Antonio, but the Spurs would want to send LaMarcus Aldridge back, a guy who is also older and starting to decline, can be exposed defensively, and it leads to questions about a second ball handler for the Cavaliers. A Carmelo Anthony trade with the Knicks creates the same questions — ‘Melo wants to be a Cavalier, but would he and a young player (Frank Ntilikina or Willy Hernangomez) going to make the Cavaliers better. Or even keep them in front of Boston.

That said, there may be deals with other teams not on Irving’s list that better fit the Cavaliers’ needs. What if Phoenix offers Eric Bledsoe, a young player (Marquese Chriss, Dragan Bender, T.J. Warren) plus a pick? Cleveland gets a good point guard (not as good as Irving overall, but a better defender), a young athletic player, and they can stay near at the top of the East. There will be options like this that come on the table.

3. Trade Irving for young players and picks to jump start a rebuild. This is also known as the “we believe LeBron leaves next summer so let’s just be proactive and get all we can” plan. It should include trading LeBron as well before the deadline and just going into full on rebuild mode.

If the Cavaliers managed this path well — a legitimate question after Dan Gilbert decided he didn’t need one of the league’s best GMs right before the start of free agency — they could stockpile players and picks. It might not be the full Boston stockpile post Garnett/Pierce trade, but it puts the Cavaliers on that road (then it would come down to drafting well and developing players). All of this would require shrewd moves now and patience down the line, but it’s a legitimate course of action.

Regardless of which option the Cavaliers choose, what matters is not to rush into a decision. If they decide to trade Irving, do not trade out of frustration or anger — it needs to be devoid of emotion. It has to be about getting the best possible return. This summer is obviously a huge turning point for the organization, and they need to make a smart decision.

You know, the kind David Griffin would have made.

John Wall agrees to four-year $170 million contract extension

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John Wall had a designated player super max contract sitting in front of him (figuratively) since July 1, but he wanted to wait and see what the Wizards would do this summer, and talk to his family about a decision that could lock him in Washington for six years.

He saw the Wizards spend — they matched a max offer sheet for Otto Porter. He also looked around the East and decided this is where he wanted to be. He agreed to the extension on Friday, a story broken by David Aldridge of TNT/NBA TV.

This is a four-year, $170 million extension that kicks in after the two-years, $37.1 million left on Wall’s current deal.

Wall has developed into one of the top five point guards in the NBA, averaging 23.1 points per game last season while making his first All-NBA team (the third team, which he thought was a let down). He is a strong defensive point guard and still arguably the fastest guy in the league with the ball in his hands. He and Bradley Beal have formed one of the more formidable backcourts in the NBA.

Wall is now getting paid like an elite point guard, and he is just entering his prime.

Check out Boston’s Jayson Tatum’s 10 best plays from Summer League (VIDEO)

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Jayson Tatum was one of the standouts at Summer League.

The No. 3 pick of the Boston Celtics, Tatum came into the draft considered the most NBA-ready player of the class. He showed that at Summer League — he is a fluid athlete who knows how to knock down mid-range shots (and gets to his spots), he has great footwork for a young player, and can attack the rim. He tends to take and make difficult shots, but that will get harder against NBA-level defenders, and he didn’t often play-make for others. That said, he averaged 17.7 points and 8 rebounds per game.

Check out his best plays from Summer League, and if you’re a Celtics fan try not to drool too much.

Memphis Grizzlies sign former Oregon forward Dillon Brooks

Associated Press
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MEMPHIS, Tenn. (AP) — The Memphis Grizzlies have signed former Oregon forward Dillon Brooks, a second-round pick in last month’s NBA draft.

Terms of the deal weren’t disclosed.

Brooks was selected by the Houston Rockets with the 45th overall pick. The Grizzlies acquired him in exchange for a future second-round pick.

Brooks, 21, averaged 16.1 points, 3.2 rebounds and 2.7 assists as a junior at Oregon last season. He was named the Pac-12 player of the year and helped Oregon earn its first Final Four berth since 1939.