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Economist Murphy takes us all to school on players stance

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Kevin Murphy is smarter than you.

And me. And David Stern and Billy Hunter and everyone else in the negotiating room. There’s no objective way to prove that, but do you have a MacArthur Foundation “genius grant?” Are you the guy the people who wrote “Freakanomics” think is the smartest person they know?

That’s Murphy. And he’s the players’ economist. Union head Hunter said that pretty much every projection Murphy made back in 2005 about how the labor deal hammered out then would play out was spot on. He may grasp all the moving parts of this negotiation better than everyone.

And he spoke at length with NBA.com’s Steve Aschburner. You need to read this. All of it.

Know that Murphy has a dog in this fight — the union pays him. But he is too insightful not to read.

And this goes back to the core arguments of the entire lockout — how much money are the owners really losing? And who should pay for it?

I would say the primary disagreement is not over the accounting numbers. It’s what you include and how you interpret the numbers. For example, the accounting picture of the NBA isn’t very different from what it was five years ago or 10 years ago in terms of ratio of revenues to costs and all the rest — it’s changed very little. Which immediately tells you, wait a minute, if the underlying financial picture is similar today to what it was five years ago or 10 years ago, and people are paying $400 million or whatever for franchises, and you’re telling me that these things lose money every year, something’s missing, right? These people aren’t stupid, right? These guys are worth billions of dollars. So why did they pay all this money for franchises that, it looks like, lose money?

Well, the answer is pretty clear. There are a couple of things that are really attractive. One is, historically, you’ve seen franchises appreciate in value and that appreciation has more than outstripped any cash-flow losses that you’ve had. And if you’re in the right tax position, it’s actually pretty good because you’ve got a tax loss annually on your operating and you’ve got a capital gain at the end that you accumulate untaxed until you sell it and then pay at a lower rate. So you get a deferred tax treatment on the gains and an immediate tax treatment on the losses, that’s not a bad deal.

I’ll be honest, the last couple sentences are hard to follow for me. My tax position does no require a lot of thought. But you get the idea that what is in the official books is not the entire picture.

To all of you people saying “name another industry where the workers would get half the revenue” (yes, we read the comments) Murphy has an answer:

In certain sectors, there’s a ton. You go to a law firm, most of its cost is labor. You’ve got to remember, labor is 60-something percent of the economy. In the service sector, it can be much higher than that. And these people really define the product. These are the ones people come to see.

What separates the NBA from a different basketball league? Well, it’s the players. The basketball’s’ the same, the court’s the same, it’s the players who really are the distinguishing feature. That’s not to say that the league doesn’t have value. But the defining characteristic and the scarce resource, if you think about it from an economic point of view, is the talent. It’s not unlike Hollywood, the music business or any of the other ones where the thing that distinguishes one person from another is the talent.

Then there is the competitive balance issue. The idea from the owners that there needs to be more parity, something Murphy says clashes with the NBA’s star-driven league. Like another report yesterday, Murphy says that what you spend really only has about a 5 percent to 10 percent impact on wins on the court.

NBA.com: (The owners) want Milwaukee fans, for example, to not only root for the Bucks but to have most seasons with hope that their team can compete with bigger-revenue markets.

KM: There’s an element of that. But also, be careful what you wish for. When you get a Sacramento-Charlotte NBA Finals, guys will be crying over the TV ratings. We know that even with baseball — it’s an exciting World Series but the ratings aren’t there because it’s the Texas Rangers and St. Louis [Cardinals]. Basketball is even more star-driven. You get to an NBA Finals that doesn’t have one of the premier players in the league in it, it becomes a lot less interesting. And with 30 teams, not everybody is going to have one of the premier players.

All the number crunching is nice. But let’s get to what really matters:

Can the two sides reach a deal soon so we can have basketball?

“I was very pessimistic last week after the Thursday blow-up but I’m beginning to come around and think we’ve got a shot,” Murphy said. “If there’s a deal here, it’s going to be a deal that nobody likes. That’s what deals are. Nobody walks out feeling like they got a complete victory. That’s initially. But then you get back to playing and you realize, geez, I can live with this.”

Larry Sanders considering making NBA comeback soon

Larry Sanders
Associated Press
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It was one year ago that Larry Sanders came to terms for a mutual parting of the ways with the Bucks, a buyout of his contract that let him get away from basketball. He had personal demons to deal with. Sanders had played just 50 games the previous two seasons for the Bucks, had been a nightclub brawl left him with an injured thumb in need of surgery, been charged with animal cruelty, had been suspended a couple of times by the league for marijuana use, and the list went on. It was best for both sides to walk away.

Sanders checked himself into a hospital program for anxiety, depression, and mood disorders. At the time, he wrote he still loved basketball, but he needed better coping skills to handle the pressure and lifestyle.

“If I get to a point where I feel I’m capable of playing basketball again, I will.”

We may be reaching that time. From Shams Charania of The Vertical at Yahoo Sports:

After accepting a buyout from the Milwaukee Bucks to step away from the NBA last season, Larry Sanders told The Vertical he plans to pursue a return to the NBA once his off-court ventures stabilize.

“Once my art, music and passions off the court feel stable, I will look into coming back,” Sanders told The Vertical. “I still love basketball. I want stability around me, and part of my mindset to leave was not to put all my eggs in one basket.

“I feel highly valuable on any team. There aren’t a lot of people who can bring my game to a team. I still play basketball all the time, staying in shape. I will need to make sure the situation is right for me.”

Sanders would draw interest from teams (he already has this season), there aren’t a lot of athletic 6’11” defenders in the league. In the 2013 season, before he signed his contract extension, Sanders averaged 9.8 points, 9.5 rebounds and 2.8 blocks a game. Teams would be willing to roll the dice.

Sanders is now working on his music, plus running a management company for artists. His buyout from the Bucks will give him $1.9 million a season until 2022, so a return to the league is not necessarily about the cash.

If he does come back, I hope for his sake his head is in the right space and can handle it. He needs to take care of himself first.

Will Phil Jackson ultimately leave Knicks to run Lakers?

Phil Jackson Jeanie Buss
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Phil Jackson has been thrust back into the New York spotlight with the firing of Derek Fisher for not being ready to be an NBA coach — who could have seen that coming? — and speculation about what moves he’ll make next. While you can point to misfires as the guy with the hammer in the Knicks organization, he nailed the Kristaps Porzingis pick and no doubt this Knicks roster is in far better shape than the one he took over. Plus, he’s kept owner James Dolan out of the basketball decision-making process, which is a huge step forward.

But if/when he gets the chance, will he bolt New York to team up with fiancée Jeanie Buss and run the Lakers?

Adrian Wojnarowski of The Vertical at Yahoo Sports writes there is a “strong belief” in some quarters that it will happen.

Golden State assistant Luke Walton is closest to a legitimately coveted candidate with ties to Jackson and the triangle – and he’s still largely unproven, too. Walton intrigues Jackson, but truth be told: Why would Walton come East without an assurance Jackson is committed to the long run in New York? There’s still a strong belief Jackson will eventually find his way to his fiancée Jeanie Buss and the Los Angeles Lakers. Walton will be competing with Thibodeau for the Lakers job in the spring, and who knows: Jackson and Walton could be reunited there.

Would Jackson leave the Knicks? The better question is, did anyone think he would stay the entire five years of his contract? Not many around the league did. Knicks fans should be legitimately concerned about who is next.

Lakers fans would welcome Jackson’s return because it means no Jim Buss. Fairly or not, Buss has become a scapegoat for a healthy segment of the fan base.

But this would be far from simple.

Jim Buss is in charge of the basketball side of the Lakers’ operation as empowered by the complex trust his father Jerry Buss used to leave the team to his six children. They all have roles, they all have pieces of the team, and truth be told they all have big aspirations. It sets up like a Shakespearean drama. Jeanie Buss is the ultimate power and the person the league recognizes as the owner for official votes of the board of governors, but this is not like other ownership situations where she has ultimate power and can fire whomever she wants and replace them — she can’t just ax family members and sideline them. Again, it’s a complex trust with shared power and responsibilities.

Jim has said if the Lakers are not a contender by 2017 he would step aside, although how he defines that time (the end of the summer of 2017, at the earliest) and how Jeanie defines it (more like early 2017, before that loaded free agency summer) differ. Nothing that happens with the Lakers will be clean and bloodless.

But if Jim steps aside and lets Jeanie bring in her own basketball people, Phil Jackson could well return to L.A.

Then we can have a discussion if that’s really best for the Lakers’ brand.

Add Kobe Bryant to don’t change hack-a-player crowd

Los Angeles Lakers forward Kobe Bryant gestures after hitting a three point shot during the first half of an NBA basketball game against the Houston Rockets, Sunday, Jan. 17, 2016, in Los Angeles. (AP Photo/Mark J. Terrill)
Associated Press
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LeBron James is already there. So is Kevin Durant. Same with a lot of other old-school GMs and coaches around the league.

Their response to the rapid rise in hack-a-player (shouldn’t it always be hack-a-Shaq?) instances is “tell the guy to hit the free throws.”

Add Kobe Bryant to their ranks, reports Kevin Ding of Bleacher Report.

Personally, I hate the “won’t somebody please think of the children” argument — plenty of people have said emulating Kobe’s penchant for isolation basketball and contested jumpers was bad for children growing up playing the game.

NBA Commissioner Adam Silver is starting to feel differently. He realizes he runs an entertainment business and a parade of guys to the free throw line because of a non-basketball play — you can’t begin to tell me fouling a guy 50 feet from the ball is a basketball play in the spirit of the rules — is bad for business. It is unwatchable. And while every coach in the NBA  says “I hate to do it” they all do it with increasing frequency. There will be more than twice as many instances this season of hack-a-player fouls as there were a year ago, with more and more players involved. Because it works, and because those coaches are paid to win, not play beautiful basketball.

Change is coming. Old-school types always bemoan change, and that’s not just a basketball thing. But the rest of the world has rules in place to stop this because they realize it’s not basketball, it’s gaming the system. And it needs to change.

Timofey Mozgov with maybe “best” missed dunk of the season (VIDEO)

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On this play the Sacramento Kings played defense like only they can — and you wonder why George Karl’s job is in danger — and gave Cleveland’s Timofey Mozgov a wide-open lane right down the middle for an easy dunk.

Ooof.

LeBron James had a triple-double (the 40th of his career) and the Cavaliers got a needed easy win, but this is the play you’ll remember.