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Malcolm Gladwell says owners shouldn’t expect to make money

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Is owning a sports franchise a business or a toy?

Right now, the NBA owners are telling you the NBA is a business, and a bad one at that. One that needs to be fixed. Even if it means costing an NBA season.

But you look at owners like Mark Cuban and you see him treat it like a toy — he has said the Mavericks have lost money every year. He has been sued over it. He can kind of erase that on the books because he also owns American Airlines Center and he has said he will cover the debt. But he treats this as a toy and bought himself a title. (Go ahead and say the Heat are trying to buy a title, but the Mavericks paid $20 million more last year in salary and in the last decade only the Knicks have paid more.) Of course, Cuban has made his money on franchise valuation, that has flattened out a lot for owners who bought recently.

In an interesting piece over at Grantland, social commentator Malcolm Gladwell — he of Blink and Outliers and TED — says that NBA owners shouldn’t expect to make financial profit off a team. He notes that owners get a “psychic benefit,” an emotional benefit from owning the team that is what makes owning a sports team different than owning a car repair shop.

The rationale for the NBA lockout, from the owner’s perspective, goes something like this. Basketball is a business. Businesses are supposed to make money. And when profits are falling, as they are now for basketball teams, a business is obliged to cut costs — which in this case means the amount of money paid to players. In response, the players’ association has said two things. First, basketball teams actually do make money. And second, if they don’t, it’s not the players’ fault. When the two sides get together, this is what they fight about. But both arguments miss the point. The issue isn’t how much money the business of basketball makes. The issue is that basketball isn’t a business in the first place — and for things that aren’t businesses how much money is, or isn’t, made is largely irrelevant….

The Financial Times recently interviewed Diego Della Valle, the chief executive of the Italian luxury goods manufacturer Tod’s. Della Valle owns the celebrated Italian football club Fiorentina. “I ask if the decision to buy the club was made from the heart, or for business reasons,” the Financial Times interviewer writes. Della Valle replies: “With football, business reasons don’t exist.” Exactly.

The question to me has become, “has that attitude changed among owners?” I would say Gladwell’s perspective was true 20 years ago, it has shifted some now. The guys who form a partnership and spend hundreds of millions to get a team — guys who are leveraged — get their psychic benefit but do not let that get in the way of the bottom line. They are the hardliners pushing for change.

But should they feel that way? Or should they enjoy the psychic benefits (and the profits they will make when the team is sold) and stop treating their toy like a business? Not sure there is one simple answer to those questions.

Pat Riley believes Chris Bosh’s career is over: ‘We are not working toward his return’

Miami Heat players Josh Richardson, left, Chris Bosh, center, and Tyler Johnson, right, look up as they watch a video replay during the final seconds of the second half in Game 5 of an NBA basketball playoffs first-round series against the Charlotte Hornets, Wednesday, April 27, 2016, in Miami. The Hornets defeated the Heat 90-88. (AP Photo/Wilfredo Lee)
AP Photo/Wilfredo Lee
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When the Heat and Chris Bosh reached détente during last year’s playoffs, the team released a statement saying both sides would continue working together to get him playing again.

After not clearing Bosh for training camp due to lingering blood-clot issues, Miami is pulling its support from that joint mission.

Tim Reynolds of the Associated Press:

There were reports the Heat believed Bosh is finished. Saying they’re no longer working toward getting him back on the court is blunt as can be.

I believe Riley cares about Bosh. Bosh has spent six years with Miami, become a part of the community, sacrificed his game when called upon, acted professionally and helped the Heat win two championships. He remained an excellent player when his blood-clotting became a problem, and losing his production would be a major blow. I believe there was and is genuine concern about Bosh’s health.

But to act as if the cap ramifications never crossed management’s mind is absurd. To review the situation:

Bosh has three years and $75,868,170 remaining on his contract. The Heat could waive him and have his remaining salary excluding from their team salary on Feb. 9, 2017 – one year from his last game – if he doesn’t play between now and then and a doctor determines he has suffered a career-ending injury or illness.

That doctor, selected jointly by the NBA and players union would have to determine Bosh “has an injury or illness that (i) prevents him from playing skilled professional basketball at an NBA level for the duration of his career, or (ii) substantially impairs his ability to play skilled professional basketball at an NBA level and is of such severity that continuing to play professional basketball at an NBA level would subject the player to medically unacceptable risk of suffering a life-threatening or permanently disabling injury or illness.” II would be the likely route here.

Bosh would still be paid if waived, but the doctor’s determination is the only way for Miami to get his salary off its books. That could open considerable cap space in 2017

Bosh never playing again would be bad for the Heat. Bosh getting waived then proving the doctors wrong and playing 25 games elsewhere would be worse for the Heat, because that would put his salary back on the their cap – though Miami could use the cap space in the 2017 offseason first. That’s why an even worse scenario for the Heat is Bosh playing sporadically and ineffectively between blood-clot problems over the next three years, continuing to count against the cap and putting his health at risk the entire time.

If the Heat can’t get a fully productive Bosh back, they might just want to get his salary off the books. The quickest way to do that is ensure he plays no games before Feb. 9.

Maybe Bosh shouldn’t play again. Playing on blood-thinners, according to most doctors, is dangerous. The common recommendation is for Bosh to remain on blood-thinners after his second episode.

But the cap ramifications are unavoidably part of the considerations now. If it gets to that point, the opinion of the jointly selected doctor will be huge. The Heat can’t unilaterally declare Bosh done.

And Bosh certainly isn’t declaring himself done, which puts him at odds with his team. There’s no more working together.

It’s now Heat vs. Bosh with several potential outcomes in play.

LAPD investigating Derrick Rose, who’s facing rape lawsuit, for criminal charges

FILE - In this June 24, 2016, file photo, New York Knicks' Derrick Rose speaks during a news conference at Madison Square Garden in New York. Phil Jackson made a risky move when he traded for the injury-prone Rose in June, and now the Knicks face the possibility of their point guard's involvement in a rape trial in California during his first preseason with the team.  (AP Photo/Mary Altaffer, File)
AP Photo/Mary Altaffer
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Derrick Rose‘s best argument in the court of public opinion as he defends himself in a rape lawsuit was the lack of criminal charges. There is no burden of proof for filing a lawsuit. Just because his alleged victim sued him proved nothing. If Rose broke the law, why wasn’t he facing criminal charges?

That question prevented the lawsuit from drawing major attention. It allowed Rose to paint the plaintiff as money hungry. It allowed the Knicks to operate without concern.

About that…

Judd Legum of ThinkProgress:

In a letter to the alleged victim’s attorney, Brandan Anand, a detective from the LAPD confirmed there is an active criminal investigation against Rose and the two other defendants in the civil trial.

Rose should be concerned, given the compelling evidence against him. There’s certainly a wide gap between some compelling evidence and a conviction, and the fact that the night in question was three years ago makes a conviction less likely. Rose hasn’t even been charged.

We’ll see what the investigation uncovers, but Rose just lost some benefit of the doubt.

Paul Pierce says he’ll retire after season

Paul Pierce
AP Photo/Mark J. Terrill
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Clippers forward Paul Pierce has ended the maybe/probably/maybe/probably/maybe saga of whether he’ll play next year.

Pierce in The Players Tribune:

This is it, my final season.

It’s time to move on from the game of basketball.

Just like any difficult decision, I think you’ve got to be at peace with yourself. I’m at peace with retiring, but I’ve got one more ride left. One more season. One more opportunity.

Pierce has had an incredible career, one that will surely vault him into the Basketball Hall of Fame.

He started in Boston, where he was the Celtics’ go-to player and his most reliable sidekick was Antoine Walker – and then Pierce didn’t have even Walker. Seemingly destined to be forgotten as a good player on a mediocre team, Pierce received a legacy boost when Kevin Garnett and Ray Allen arrived. The Celtics won the 2008 title, and Pierce earned Finals MVP.

After a few more years of Pierce proving he could excel individually and help a team contend, he went to Brooklyn, where the Nets gave him a late-career spark by using him at power forward. He added a stop in Washington, where he made a few clutch shots for the Wizards. Now, he ends his career reunited with Doc Rivers in Los Angeles.

Pierce doesn’t need to add more to his all-time résumé – and he probably won’t. Only Dirk Nowitzki has played more games among active players than Pierce, who turns 39 in a few weeks. The mileage shows. Pierce has declined considerably, and he’s likely in store for a minor role this season.

But on limited minutes, maybe he can still provide a spark on occasion. The Clippers have at least a fighting chance of making Pierce part of another meaningful playoff run.

After that, would he go back to the Celtics on a ceremonial contract to retire? That’s what Rivers wants. Before it reaches that point, there will be plenty of pomp for Pierce, who just set himself up for a grand retirement tour.

 

Timberwolves confirm that Nikola Pekovic out for entire season

Minnesota Timberwolves center Nikola Pekovic (14), of Montenegro, yawns during NBA basketball media day in Minneapolis, Monday, Sept. 28, 2015. (AP Photo/Ann Heisenfelt)
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Timberwolves’ owner Glen Taylor said this exact thing last week, which is a pretty good sign that it’s going to happen. Taylor writes the checks.

The Minnesota Timberwolves have confirmed that Nikola Pekovic — who played 12 games last season due to foot injuries — is out for the coming season.

Taylor mentioned buying out Pekovic, but that seems unlikely. Pekovic is owed $23.7 million over the next two seasons, and I’d be hard-pressed to think of a reason he would take a penny less. The more likely outcome is the Timberwolves waive him and then come January (one year after his last game) apply to the league to have his salary excluded. (This would require a doctor approved by both the league and players’ union say that he is physically unable to play in the NBA ever again. If the doctor said that Pekovic would still get paid, but the money would not count against the salary cap for the Timberwolves).

No Pekovic and no Kevin Garnett, but it doesn’t impact the Timberwolves as training camp opens. Minnesota has Karl-Anthony Towns, Gorgui Dieng, Cole Aldrich and Jordan Hill up front, plus developing young players Nemanja Bjelica and Adreian Payne. Garnett and Pekovic were not going to play much anyway.