David Stern

Foul called on NBA owners’ claims of money lost

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The NBA owners continue to say the lockout is going on because the players don’t understand the fundamental need to change the league’s poor financial system — that $300 million was lost this past year.

More and more reports are questioning the severity of that loss.

The latest is Nate Silver at the New York Times, who questions the heavy losses the owners claim, and particularly the claim that player salaries are to blame.

On this point he is spot on — NBA players salaries make up 57 percent of the Basketball Related Income the league takes in. That number is fixed in the current Collective bargaining agreement — it is a fixed cost, the owners know exactly how much the players will cost the league as a whole. It’s the non-player costs that increase faster than income, Silver notes.

Growth in non-player expenses has outpaced that of salaries, having increased by 13 percent over five years and 43 percent over 10 years. Although some of this undoubtedly reflects sound business ventures, like the league’s investments in digital media or efforts to expand the game internationally, they have nevertheless had a reasonably large effect on the league’s bottom line. Had nonplayer expenses been the same in 2009-10 as they were in 1999-2000 (adjusted for inflation), the league would have made a record profit that year.

Even with those costs, Silver says the owners are making money.

Even as it stands, however, the Forbes data suggests that the league is still profitable. Its operating income — revenues less expenses (but before interest payments and taxes) — is estimated to have been $183 million in 2009-10, or about $6 million per team. The N.B.A.’s operating margin (operating income divided by revenues) was about 5 percent in 2009-10 and has been about 7 percent during the life of the current labor deal.

A 5 percent or 7 percent profit is not dissimilar to what other businesses have experienced recently. Fortune 500 companies, for instance, collectively turned a 4.0 percent profit in 2009 and a 6.6 percent profit in 2010 (both figures after taxes). Profit margins in the entertainment industry, in which the N.B.A. should probably be classified, have generally been a bit lower than that.

Silver goes on to say that a lot of the losses the owners claim are tied to depreciation and amortization when a team is sold. However, the league has noted that amortization is not used in the $300 million loss figure for the past season. Silver misses the mark there.

The players need to understand that some owners are hurting and there needs to be adjustments to the system. Things like the players hotel rooms and food per diems are not taken out of that 57 percent — they get to count the revenue minus any expenses. Those expenses are rising. Players need to give up some of their pie (maybe by rather than taking 57 percent of the gross allowing some deductions of league expenses from that before the “net” is divided up, maybe just taking a much smaller percentage of the gross). The owners have some valid points about the needs to alter the system to create a chance for all teams to make money (although revenue sharing must be part of that).

But it’s still hard to buy the owners claims that the league is in that much financial peril. Particularly when people are stepping in to pay record prices for franchises.

Report: Pat Riley ‘quietly detests’ Dwyane Wade-LeBron James friendship

WASHINGTON, DC - JANUARY 14:  U.S. President Barack Obama shakes hands with National Basketball Association 2012-2013 champion Miami Heat player LeBron James after welcoming the team -- including President Pat Riley, Dwyane Wade and others -- during an event at the White House January 14, 2014 in Washington, DC. This is the second year in a row the team won the championship and made a trip to 1600 Pennsylvania Avenue.  (Photo by Chip Somodevilla/Getty Images)
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LeBron James and Dwyane Wade share a very close friendship.

LeBron and Pat Riley – who signed LeBron and Wade to the Heat in 2010 – have a much more complicated relationship.

Riley seemingly challenged LeBron entering the 2014 offseason, and LeBron left Miami to return to the Cavs. Then, Riley couldn’t stop telling everyone how surprised he was LeBron left. After LeBron departed, Riley noted how the Heat had “no more smiling faces with hidden agendas.”

So, about the intersection of the LeBron-Wade friendship and Riley-LeBron relationship…

Pablo Torre of ESPN:

On-court effort, after all, isn’t really why Heat president Pat Riley quietly detests the Wade-James friendship.

as coach of the Heat, Riley kept the spirit of the ’80s alive by reportedly instituting a $1,500 fine for any player who helped an opponent up off the floor.

Riley wasn’t complaining when LeBron’s friendship with Wade helped lure the star forward to Miami. Riley wasn’t complaining when LeBron led the Heat to two championships, either.

But I at least understand where Riley is coming from. His old-school sensibilities don’t allow for friendships across teams, and there are legitimate reasons to draw a line.

Wade addressed this well with Torre in a feature on the LeBron-Wade friendship that’s well worth reading in full. Wade:

“You’re talking about two guys who went to the Finals together, four years in a row,” Wade says. “My job and his job was to get as close as possible, to know everything about each other and get on the same page as two leaders on the team. And then he goes elsewhere and you ask us to hate each other! It’s ridiculous.”

Rumor: Nicolas Batum could re-sign with Hornets quickly enough to play in Olympic Qualifying Tournament

LONDON, ENGLAND - AUGUST 08:  Nicolas Batum #5 of France reacts after he fouled Juan-Carlos Navarro #7 of Spain late in the fourth quarter during the Men's Basketball quaterfinal game on Day 12 of the London 2012 Olympic Games at North Greenwich Arena on August 8, 2012 in London, England.  (Photo by Ronald Martinez/Getty Images)
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Nicolas Batum‘s agent said the forward would miss France’s Olympic Qualifying Tournament, at least according to a translated report.

Batum will be a free agent, and he can’t sign until July 7. The qualifying tournament begins July 5.

FIBA:

However, it is understood that the French player and the Hornets will quickly agree terms on a new deal and that could could give France enough time to obtain insurance for Batum and allow him to take part in some of the OQT games.

Although the situation has been complicated, Batum is such a talent that France are doing everything they can to have him at the OQT

What is certain is that Batum will be in Pau, France, when the national team launches its preparations 10 June. He will do physical work but not take part in drills or scrimmages in order to avoid contact.

This seems like wishful thinking by France.

The French are in a loaded qualifier – including Canada and Turkey – and they clearly want to reach Rio. Batum would surely help.

But the timing makes it difficult. Even if Batum is set on returning to the Hornets, it’d be foolish to play before signing the deal. Still, it’d be possible to sign immediately after the moratorium and then play in France’s second game.

The bigger issue is Batum’s conditioning. The same injury risk that likely prevents him playing until his NBA contract becomes official should limit his training now. Can he turn around after months of taking it easy and contribute at a high level the next day?

And there’s no guarantee Batum re-signs with Charlotte. He could explore the market and pick a team that doesn’t want its new high-priced signing risking his health in international play.

I can’t rule out Batum playing for France in the qualifying tournament, but there are so many hurdles to clear.

Dikembe Mutombo and Bismack Biyombo squabble over finger-wagging rights

TORONTO, CANADA - APRIL 16: Bismack Biyombo #8 of the Toronto Raptors wags his finger after blocking a shot against the Indiana Pacers in Game One of the Eastern Conference Quarterfinals during the 2016 NBA Playoffs on April 16, 2016 at the Air Canada Centre in Toronto, Ontario, Canada. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory copyright notice. (Photo by Tom Szczerbowski/Getty Images)
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Bismack Biyombo has been doing the Dikembe Mutombo finger wag after blocks for years, and the Raptors center has said Mutombo gave him permission.

But with Biyombo breaking out and blocking shots during the playoffs, it has drawn more attention – and Mutombo’s ire.

Mutombo, via TMZ:

“I don’t know when did that conversation took place,” Mutombo said … “Him and I need to talk this summer.”

“He claim in the newspaper and everywhere he said I gave it to him. I said, Did I gave him? Was it family? Cosign? But you know what, he’s a young man, man, I let him enjoy the fame. He’s making me famous!”

“I will see him in the Congo this summer so him and I will talk back home with nobody around us.”

This is dumb.

1. Mutombo already approved of Biyombo finger-wagging. Mike Mazzeo of ESPN:

2. I’m sure Biyombo means nothing but to pay tribute to Mutombo and show up opponents – two noble goals. There is no good reason for Mutombo to be upset. He’s being honored.

Yet, this whole thing has Biyombo on edge. Josh Lewenberg of TSN:

Keep finger-wagging, Bismack. Mutombo will come around.

Report: Wizards to offer Bradley Beal five-year max contract on July 1

Washington Wizards guard Bradley Beal reacts after making a 3-point shot during the second half of an NBA basketball game against the Utah Jazz, Thursday, Feb. 18, 2016, in Washington. The Wizards won 103-89. (AP Photo/Alex Brandon)
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Bradley Beal isn’t messing around when setting his value in free agency this summer.

I’m a max player.”

Apparently, the Wizards agree.

J. Michael of CSN Mid-Atlantic:

Just as the Wizards did with John Wall, offering him a max deal early in the process of negotiation, they’ll do the same with Bradley Beal, a person with knowledge of the situation told CSNmidatlantic.com earlier this week.

This is a smart move.

Washington could let the market dictate Beal’s price, but with the salary cap skyrocketing, it’s bound to come in at a max salary anyway. By offering him a max deal on day one, the Wizards can get Beal on board with re-signing when the time is right.

Beal’s cap number will be $14,236,685 until signed or renounced. Once signed, his 2016-17 salary will become his cap number, and the max projects to be $21,579,000. So, Washington could spend the difference (projected to be  $7,342,315) then exceed the cap to re-sign Beal using his Bird rights.

Beal could get impatient and interrupt those plans, but why would he sign a max offer sheet elsewhere (projected to be worth about $92 million over four years) that the Wizards will surely match if he can just re-sign directly and get about $124 million over five years? Washington is trying to ensure he doesn’t find a reason.