About the owners losing money, it’s really complicated


There are NBA owners who have wondered if player endorsements should not be money in the basketball related income pool — those players wouldn’t make their money if not for the teams.

But what about the other side of that coin — money the owners make on other businesses because they own and NBA franchise as well. Owners have complex finances and there are other projects they have that directly or indirectly feed off the NBA teams. For example, Cavaliers’ owner Dan Gilbert has casinos he got a sweetheart deal to build based on his NBA team’s popularity during the LeBron era, for example. That’s not money the Cavs make, but it’s money the owner would not have gotten without also owning the Cavs.

Which brings us to the Brooklyn Nets, the name they will take on next season. Bruce Ratner owned the team until he sold last year to Mikhail Prokhorov and it is one of David Stern and the owners talking points about how Ratner sold the team at a loss.

But Malcolm Gladwell tells a different, more complex story at Grantland. One that involves Ratner making a lot of money on his Atlantic Yards real estate deal — where the new arena will be central to new housing and retail — and needing the Nets to make sure the city and many residents were behind him taking over an existing neighborhood to get this built.

Ratner has been vilified — both fairly and unfairly — by opponents of the Atlantic Yards project (where the Nets new home is going up). But let’s be clear: What he did has nothing whatsoever to do with basketball. Ratner didn’t buy the Nets as a stand-alone commercial enterprise in the hopes that ticket sales and television revenue would exceed players’ salaries and administration costs. Ratner was buying eminent domain insurance. Basketball also had very little to do with Ratner’s sale of the Nets. Ratner got hit by the recession. Fighting the court challenges to his project took longer than he thought. He became dangerously overextended. His shareholders got restless. He realized had to dump the fancy Frank Gehry design for something more along the lines of a Kleenex box. Prokhorov helped Ratner out by buying a controlling interest in the Nets. But he also paid off some of Ratner’s debts, lent him $75 million, picked up some of his debt service, acquired a small stake in the arena, and bought an option on 20 percent of the entire Atlantic Yards project. This wasn’t a fire sale of a distressed basketball franchise. It was a general-purpose real estate bailout.

Did Ratner even care that he lost the Nets? Once he won his eminent domain case, the team had served its purpose. He’s not a basketball fan. He’s a real estate developer. The asset he wanted to hang on to was the arena, and with good reason.

This is essentially what AEG did with Staples Center (minus the eminent domain) — they got a piece of the Lakers and were able to build a new, modern arena around which they have now built the L.A. Live complex — home to shops, restaurants, condos, the Nokia Theater, hotels and the West Coast headquarters of ESPN. AEG made a lot of money off all that, something that would not have been possible without the energy of Staples and particularly the Lakers. Frankly, Kobe Bryant should be getting a check from L.A. Live.

Which all comes back to how complex figuring out whether a team made or lost money can be. Did Ratner lose money on the Nets in the real sense of the word? If an NBA owner has control of both the arena and the team, there is a lot of ways money can be moved around. Remember, only 40 percent of in-arena sponsorship money is counted by the league as “basketball related income,” but if the owner also owns the building he gets the other 60 percent, too.

NBA finances are a complex web. No doubt the recession has hit the owners and NBA franchises, but be careful about believing everything the league tells you about money lost.

Byron Scott doesn’t care about exhausting Lakers in preseason

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The Warriors use wearable technology to track players and have rested them when the data revealed fatigue. Gregg Popovich is holding relatively healthy Spurs out of practice. Heck, Popovich doesn’t even send himself to every preseason games.

Meanwhile, with the Lakers…

Lakers coach Byron Scott, via Baxter Holmes of ESPN:

“I don’t necessarily care about tired legs in preseason,” Scott said. “I think everything that we’ve done thus far will pay off at the end of the day. You’ve got some guys that might have tired legs and [are] a little worn out, but all the running as far as getting into that physical condition that we need to get into, I think in December and January, it will pay off.

“So I’m not necessarily worried about guys having tired legs in preseason. They’ll just have to kind of fight through that fatigue part of it. And I think mentally it gets them a little stronger anyway.”

Mike Bresnahan of the Los Angeles Times:

The Lakers coach has a reputation for demanding a lot of running in the preseason. It’s important in his mind because the Lakers will be better conditioned than other teams down the road.

Players, predictably, aren’t as enthused about it.

Bresnahan quotes just two players, Brandon Bass and D'Angelo Russell, and neither expressed much resistance to Scott’s methods. But I trust Bresnahan to read the team’s pulse.

I also think Scott is right: Fighting through fatigue builds mental toughness. But it also makes players tired, and it’s not the only way to instill toughness. The Warriors are tough. The  Spurs are tough. They didn’t have to run their players into the ground to get that way.

Scott loves to project himself as old-school and anti-analytic. Thankfully for the Lakers, his actual methods aren’t as bad as he conveys. For example, he said the Lakers would take an absurdly low 10-15 3-pointers per game last season. In reality, they hoisted nearly 19 per game, 25th in the league. That might not have been enough for that roster, but at least it wasn’t leaps and bounds below the norm.

So, I’m not convinced Scott is pushing the Lakers as hard as he wants everyone to believe. But he’s  clearly giving them a bigger workload than many teams.

If the Lakers are playing relevant games late in the season, this could come back to bite them. On the bright side, they probably won’t have to worry about that problem.

Tony Parker wants to play six more seasons with Spurs

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Tony Parker revealed a plan nearly two years ago to play until he’s 38.

Coming off his worst season since his rookie year, the Spurs point guard is sticking to that goal.

Parker, via Marc J. Spears of Yahoo Sports:

“The Spurs know I want to play until I’m 38,” Parker told Yahoo Sports in a recent phone interview. “That will be 20 seasons for me. That’s my goal. This year is No. 15. And if I’m lucky enough and I’m healthy, hopefully I can play 20 seasons and then I’ll be ready to retire.”

That seems pretty ambitious, no matter how you handle the conflicting math. (Parker is 33. If he plays 20 seasons, he’ll spend most of his final season at age 39 and turn 40 during the playoffs.)

Parker is already showing signs of slippage. Many of his key numbers were down last season, including ESPN’s real-plus minus, where he quietly slipped from 12th to 67th among point guards.

But Gregg Popovich is very liberal with resting his players, and Parker won’t have to carry too much of the load. Tim Duncan and Manu Ginobili will probably retire before Parker, but the Spurs will still have Kawhi Leonard and LaMarcus Aldridge.

I wouldn’t count on it, but it’s possible Parker lasts that long.