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: Veteran big man Jason Thompson agrees to deal in China

BEIJING, CHINA - OCTOBER 15:  Jason Thompson # 34 of Sacramento Kings in action during the 2014 NBA Global Games match between the Brooklyn Nets and Sacramento Kings at MasterCard Center on October 15, 2014 in Beijing, China. 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 Lintao Zhang/Getty Images)
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Until this season, Jason Thompson had never been to the playoffs. He spent seven seasons in Sacramento before getting traded to the Warriors last offseason, and then signing with the Raptors midseason when Golden State waived him to make room on the roster for Anderson Varejao. His NBA days appear over, at least for now. International basketball reporter David Pick reports that Thompson has agreed to a deal to play in China.

Since the CBA’s season ends in March, Thompson could theoretically join an NBA team for the stretch run next year. But he didn’t appear to have much interest on the free-agent market this summer.

Report: Veteran big man Kevin Seraphin working out for Pacers, getting pursued by Barcelona

NEW YORK, NY - APRIL 01:  Kevin Seraphin #1 of the New York Knicks reacts after he is called for a foul in the second half against the Brooklyn Nets at Madison Square Garden on April 1, 2016 in New York City. 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 Elsa/Getty Images)
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After five years in Washington, French forward Kevin Seraphin signed a one-year deal in New York last offseason. He played 48 games for the Knicks, averaging 3.9 points and 2.6 rebounds in 11 minutes per game and wasn’t a big part of their rotation. Now, as a free agent, he’s looking for a new NBA home, and Yann Ohnona of L’Equipe reports that he’s worked out for the Indiana Pacers and has interest from the Spanish club FC Barcelona.

The translation of that tweet reads:

Kévin Seraphin, always courted by Barcelona, is in the United States for a trial with the Pacers of Indiana

With Barcelona in pursuit, Seraphin appears to have a solid fallback option if he can’t land a spot on an NBA team. He can be useful as a fourth or fifth big, it’s just a matter of a team having room.

Lakers’ Julius Randle out 14 days after receiving stitches on right hand

LOS ANGELES, CALIFORNIA - APRIL 06:  Julius Randle #30 of the the Los Angeles Lakers dribbles upcourt during a basketball game against the Los Angeles Clippers at Staples Center on April 6, 2016 in Los Angeles, California.  (Photo by Sean M. Haffey/Getty Images)
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Lakers forward Julius Randle has suffered a minor setback in his summer workouts. The team announced he received stitches on his right hand and will be sidelined for two weeks.

Lakers forward Julius Randle suffered a laceration to his right hand (webbing between middle and ring fingers) yesterday while practicing. He received seven stitches and will be re-evaluated in approximately 14 days.

That sounds painful, but the timing works out such that the two weeks will be up and he’ll have plenty of time to get back into things before training camp kicks off the last week of September.

Evan Fournier “hated” being left off the French national team

ORLANDO, FL - NOVEMBER 11:  Evan Fournier #10 of the Orlando Magic sets up the offense during the game against the Los Angeles Lakers at Amway Center on November 11, 2015 in Orlando, Florida.  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 Sam Greenwood/Getty Images)
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One of the most surprising developments of the summer came when Evan Fournier, coming off an excellent year with the Magic, was left off the French national team that went to Rio to compete in the Olympics. Fournier himself doesn’t have a good answer for why he wasn’t included, according to an interview with the French magazine L’Equipe (translation via EuroHoops.net).

“I hated not being in the Olympic Games,” he said. “I had suspected that I won’t make the cut a week before I was informed about it. I was reading interviews where only Rudy (Gobert) was mentioned among the players who didn’t play in the OQT but would go to Rio. In the end, I received a voicemail by Vincent Collet that briefly explained the reasons I was left out.”

Fournier said he didn’t have much communication with the national team, except for when head coach Vincent Collet asked him for tickets to a Magic game.

“The only time I’ve heard from the Federation this year was during a visit from Patrick Beesley (French NT technical director) in Orlando where he told me the dates of the qualifying tournament and Olympics. He didn’t tell me ‘If you do not come in Manila, then you do not come in Rio’. The second time was from an sms by Vincent Collet. It was our only contact outside competitions in the last three years. He was asking me for tickets to a game for his friends. I never closed the door to the French national team but these events sent me a clear message. That i’m not in the project. It’s that simple and it hurts.”

It’s a little bizarre that Fournier, at 23 years old and one of the better basketball players from France, isn’t on the team and a clear reason hasn’t been given. But it sounds like that isn’t going to change anytime soon.