League says it lost money every year of this CBA

5 Comments

We’ve been bringing you reports questioning how much money the NBA owners are really losing. Frankly, we have doubts about the owners’ veracity on the numbers — they are losing some money but how m.

It’s hard to believe the owners when they say the league has lost money in each of the last 11 seasons.

The New York Times wrote one of those pieces we quoted, and the league has fired back with a statement from NBA spokesman Tim Frank saying the numbers that the Times based its analysis on (from Forbes) are flawed. The Times runs it in full, but here are some highlights.

The league lost money every year of the just expiring CBA. During these years, the league has never had positive Net Income, EBITDA or Operating Income.

The Knicks’, Bulls’ and Lakers’ combined net income for 2009-10 does not cover the losses of the 23 unprofitable teams. Our net loss for that year, including the gains from the seven profitable teams, was -$340 million.

This brings us back to a couple of points we have made from the start: 1) When the basis of this CBA was hammered out after a strike in 1999 it was considered a big win for the owners because they got a cap on players salaries and this deal makes players a fixed cost; 2) Players are still a fixed cost, they still get 57 percent of the gross income every year, what has changed is non-player expenses have ballooned (Forbes estimated it was by 43 percent over 10 years).

The players should be giving some money back in this new deal. They need to help make sure all the owners have a chance to make money and player salaries remain the single biggest expense by far. But the owners cannot just balance their books on the back of the players who did not alone create this problem.

Also, until the owners’ books are opened up for independent verification, you should be skeptical about what their real losses are. Many NBA owners are losing some money, but the league lost money for the last 11 years? Really? No doubt the owners are using accepted accounting principles — they are not cooking the books illegally — but within those principles are a lot of ways to move money around and exaggerate losses.

Will Sam Hinkie ever be an NBA GM again?

Getty Images
1 Comment

The buzz around the NBA is that Sam Hinkie would like to get back in the game. He’s a bright guy who is teaching graduate business classes at Stanford, he’s investing in and helping some startups in the Silicon Valley. Like smart people in every walk of life, NBA GMs have interests outside of just their profession. Hinkie can live a very good life outside the NBA world if he so chooses, but the buzz is he wants back in.

Will a team let him?

Ric Bucher of Bleacher Report asked other executives about the potential of a Hinkie return, in a story about his legacy. There was caution.

One owner of an Eastern Conference team said (Hinkie’s 13-page, esoteric resignation) letter—which was not intended to be shared publicly—damaged Hinkie’s chances of being hired to run a franchise again as much as anything he did while with the Sixers. Still, sources both close to Hinkie and around the league said owners and executives routinely reach out to him for counsel. Several basketball operations vice presidents and owners said they would hire him, but they wouldn’t put him in charge.

Others believe Hinkie and The Process weren’t given a full trial, and that he didn’t do anything wrong as much as the league turned on him.

“They clearly changed the rules on Sam,” the longtime front office executive said. “That wasn’t all on him. If he lasts five more months, maybe it all looks different and he is given credit for what they’re doing now.”…

“Once you stockpiled all those talented players, was Sam capable of flipping the switch and becoming a real GM?” the second Western Conference GM asked. “Because you don’t hire the demolitionist to do the remodel. Those are two different jobs with two different skill sets.”

Hinkie gamed the system in Philadelphia — with ownership’s blessing, at first. Until the pressure from the league and other owners, and the weight of the losses, became too much. Jerry Colangelo came in and the writing was on the wall for Hinkie and “The Process.” Every team has “tanked” to improve draft position and gain financial flexibility at some point, but nobody was as naked and extreme in their ambitions as Hinkie’s 76ers. Most Sixers fans seemed to get it, but other owners didn’t like what it said about the business of the NBA.

The Process also worked — Joel Embiid, Ben Simmons, Markelle Fultz (who has yet to play but will make a difference) have the Sixers as an on-the-rise team that makes the playoffs this year. Whether they get there depends on Embiid’s health and if the right players can be put around them, but he started a process that works.

At some point, I expect a team will give Hinkie another shot, a team near the bottom of the standings in a smaller market with an owner ready to gamble. It may be, as the one executive suggested, Hinkie in some kind of executive role setting the tone while another “GM” handles the day-to-day and relationships, but I expect Hinkie will get his shot. He learned some lessons the first time around, and his model in Philly is not one size fits all (especially with the draft lottery changes that kick in for 2019).  But he deserves another turn in the big chair somewhere.

Donovan Mitchell: I was at LeBron James’ Decision

1 Comment

Donovan Mitchell has turned heads with the Jazz then made the most of his All-Star stage, winning the dunk contest.

But that wasn’t the first time he neared the spotlight.

Mitchell explained how he attended The Decision, LeBron James‘ 2010 free-agency TV special, where he announced he’d sign with the Heat.

Mitchell, via Dan Devine of Yahoo Sports:

“I was there, when he had The Decision,” Mitchell explained. “So that would probably be the biggest one.”

Like, there there?

“It was in Greenwich, Conn., and I went to school in Greenwich [at Greenwich Country Day School],” he said. “So, as a big LeBron fan in the sixth grade, I forced my mom to let me go. I wanted him to go to Miami. I wanted him to get his first ring.”

Young Donovan was glad to see one of his favorite players chart a course for a more successful future. Not everybody at the Greenwich Boys & Girls Club shared his enthusiasm.

“The people there who were Knicks fans … they weren’t too happy about it,” Mitchell said. “I almost got hit in the head with a Snapple bottle because they were just throwing stuff around outside. It was cool. I was just celebrating, so it was pretty cool.”

What a cool bit of happenstance.

Damian Lillard’s goal in meeting with Trail Blazers owner Paul Allen: ‘Spark that urgency’

Abbie Parr/Getty Images
2 Comments

Alleviating Paul Allen’s fear, Damian Lillard didn’t request a trade in his requested meeting with the Trail Blazers owner.

So, what did Lillard want to accomplish?

Lillard, in an interview with Rachel Nichols of ESPN:

It was just me showing urgency, spark that urgency, figure out, “OK, what do we have to do?” We’re a five, six seed. What do we got to do to make the jump? If you don’t have a line of communication with people who can make the changes or the people who can make impact for things happening for the better, then you’re just going out there playing.

Paralyzed by a huge payroll, the Trail Blazers have been going the opposite direction. They dumped Allen Crabbe and Noah Vonleh in their last two significant trades. Portland could let Ed Davis and Shabazz Napier walk in free agency this summer. Luxury-tax concerns aren’t vanishing. Evan Turner‘s, Maurice Harkless’ and Meyers Leonard‘s are major obstacles to upgrading the roster.

The Trail Blazers could be stuck.

That’d be rough news for Lillard, who’s already 27. I understand why he’s trying to push the envelope. His prime is ticking down.

I’m just not sure Portland can help him accomplish his championship-contention goals anytime soon, as hard as he presses.

Adam Silver jokingly thanks Magic Johnson for paying for All-Star Legends Brunch

Getty Images
Leave a comment

The NBA held its annual All-Star Legends Brunch last weekend. Jerry West, James Worthy, Bill Walton and Magic Johnson were honored.

And NBA commissioner Adam Silver delivered a great line while addressing the event.

Silver, via Steve Aschburner of NBA.com:

“Magic, thank you for paying for the brunch today.”

So, that’s why Johnson got fined for $50,000 for tampering for innocuous comments about Giannis Antetokounmpo.