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About the owners losing money, it’s really complicated

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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.

Isaiah Thomas nutmegs Knicks center Marshall Plumlee (video)

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Isaiah Thomas usually saves his best play for the fourth quarter, but the Celtics guard showed out early with this pass between Marshall Plumlee‘s legs to get Kelly Olynyk a layup.

Thomas uncharacteristically just didn’t have enough late. Though he scored 39 points, he shot just 2-for-9 in the final period, as the Knicks pulled away for a 117-106 win.

Kevin Durant misses dunk so hard, ball flies past halfcourt (video)

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Kevin Durant played great in the Warriors’ win over the Thunder last night, but – perhaps fueled by excess emotion – he missed this incredibly emphatic dunk attempt.

Later, Russell Westbrook showed his former teammate how to do it (sparking their apparent conversation):

James Harden outduels Giannis Antetokounmpo as they produce fantastic highlight video

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James Harden and Giannis Antetokounmpo met in a battle of two of the NBA’s best point guards. (Still weird to say.) The final lines:

  • Harden: 38 points, 6 rebounds, 8 assists, 2 blocks
  • Antetokounmpo: 32 points, 11 rebounds, 6 assists, 3 blocks

The winner? Harden and the Rockets, who topped the Bucks, 111-92.

But the real winner? Anyone who gets to watch this highlight video. It just gets better as it goes.

PBT Extra: Who do you want to see most in first All-Star Game?

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Tonight the NBA All-Star Game starters will be announced. Then the coaches have a week to vote and the rest of the roster will be put together by them.

This year should see a few first-time All-Stars, guys bursting on the scene and grabbing fans attention — so we asked people on Twitter who they most wanted to see in his first All-Star Game and I break it down in this PBT Extra.

The winner? Giannis Antetokounmpo with 45 percent of the vote. Which shouldn’t be a surprise, he’s second in the fan voting for the frontcourt in the East (behind only LeBron James). Good news for those fans, the Greek Freak is almost guaranteed to be a starter, he’s getting plenty of media votes and likely a lot from the players as well.

Second place in the poll? Joel Embiid of the Sixers. I’d love to see him, but will players and media members vote in a guy on a minutes restriction? Will the coaches pick him for that same reason? He is on the bubble.