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: Rockets to interview Mike D’Antoni, Frank Vogel for coaching vacancy

LOS ANGELES, CA - FEBRUARY 28: Head coach Mike D'Antoni of the Los Angeles Lakers gestures during the game against the Sacramento Kings at Staples Center on February 28, 2014 in Los Angeles, California.  The Lakers won 126-122.   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.  (Photo by Stephen Dunn/Getty Images)
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The Houston Rockets aren’t in any rush to hire a new head coach, preferring to interview a wide range of candidates to find the right one. Jeff Van Gundy has been widely believed to be at the top of their list, now that Tom Thibodeau and Scott Brooks are off the market, but ESPN.com’s Marc Stein is reporting another name that has entered the mix: Mike D’Antoni, who last held a head coaching job from 2012 to 2014 with the Lakers and currently serves as the Sixers’ lead assistant.

The Pacers, meanwhile, haven’t made a final decision on Frank Vogel’s future with the team, but all signs seem to point to him getting let go in the next few days. And if that happens, Stein reports that Vogel will also be on Houston’s list of candidates.

Given the Rockets’ massive drop-off on the defensive end this season, Vogel would seem to be a better fit than D’Antoni. But it sounds like the Rockets aren’t close to finding a replacement for J.B. Bickerstaff, although it would make sense to have a new coach in place by next month’s draft.

Cavs set single-game three-point record in blowout win over Hawks

CLEVELAND, OH - MAY 4: J.R. Smith #5 of the Cleveland Cavaliers shoots a three point jump shot over Kyle Korver #26 of the Atlanta Hawks during the first half of the NBA Eastern Conference semifinals at Quicken Loans Arena on May 4, 2016 in Cleveland, Ohio. 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. (Photo by Jason Miller/Getty Images)
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On Monday, the Hawks played the Cavaliers close and even led in the fourth quarter, leading plenty of optimism that Game 2 would be equally competitive, that the Hawks had something to build on.

Nope.

The Cavs dominated from the start on Wednesday, with a 123-98 final score that was far closer than the game actually was — the Cavs led 74-36 at the half and led by as much as 38 at one point in the second half.

The Cavs also hit 25 three-pointers, which is the all-time record for a single game — regular season or playoffs. J.R. Smith hit seven of them, along with four each from LeBron James and Kyrie Irving and three for Kevin Love.

18 of Cleveland’s threes came in the first half, also a playoff record, and this was all Atlanta could do:

That’s the kind of night it was for the Hawks, who now trail 2-0 in the series as it heads back to Atlanta.

LeBron James whips one-handed pass, leads to open Kevin Love three (VIDEO)

CLEVELAND, OH - MAY 2: LeBron James #23 of the Cleveland Cavaliers fights for a loose ball against Al Horford #15 and Kyle Korver #26 of the Atlanta Hawks during the second half of the NBA Eastern Conference semifinals at Quicken Loans Arena on May 2, 2016 in Cleveland, Ohio. The Cavaliers defeated the Hawks 104-93. 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. (Photo by Jason Miller/Getty Images)
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LeBron James has always been an incredible passer. In the midst of the Cavs’ Game 2 beatdown of the Hawks, he zipped this one-handed beauty into the paint to Kyrie Irving, who kicked it out to Kevin Love for a corner three:

The three was just one of the 18 Cleveland hit in the first half, which set an NBA playoff record.

Report: J.B. Bickerstaff withdraws himself from consideration for Rockets’ coaching job

HOUSTON, TX - APRIL 24: Head Coach J.B. Bickerstaff of the Houston Rockets encourages his team in the seconf half against the Golden State Warriors at Toyota Center on April 24, 2016 in Houston, Texas. NOTE TO USER: User expressly acknowledges and agrees that, by dowloading and/or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Bob Levey/Getty Images)
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The Houston Rockets are still searching for a head coach — with Jeff Van Gundy believed to be their top target — but it won’t be J.B. Bickerstaff, who has served as the team’s interim coach since they fired Kevin McHale in November. According to The Vertical‘s Adrian Wojnarowski, Bickerstaff has informed Rockets management that he’s no longer in consideration for the job:

After a meeting with ownership and the front office on Tuesday, Houston Rockets interim coach J.B. Bickerstaff has informed team officials that he’s no longer a candidate for the head-coaching job, league sources told The Vertical.

Other NBA teams have started reaching out to Bickerstaff about lead assistant coaching positions, and that’s where he’s transitioned his focus, league sources said.

After the Rockets’ disappointing season and disastrous playoff performance — where they lost in five not-very-competitive games to a Stephen Curry-less Warriors —it makes sense that Bickerstaff would rather get a fresh start as an assistant somewhere else, where he could build up his credentials and be a more highly sought-after head coaching candidate in the future. He isn’t a big name, so he likely wouldn’t be able to command as much money as the Rockets’ head coach as a more established figure would be. Given the Rockets’ uncertain future with Dwight Howard almost certain to opt out and not a lot of long-term pieces around James Harden, it’s not the most stable job in the world.