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.”

Watch the Knicks and Lakers make every shot for 2 straight minutes of game clock

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Tuesday night’s game between the New York Knicks and Los Angeles Lakers was a good one, with the teams going-back-and-forth all night. In an OT game that came down to the wire, a sequence in the third quarter was perhaps indicative of the kind of contest it was in Madison Square Garden.

Starting with a little more than six minutes to go in the third the teams traded eight consecutive baskets while MSG rose to an accompanying fever pitch.

The whole sequence was pretty hilarious, and lent to that feeling you get sometimes while watching competitive NBA games of complete exhilaration.

Via Twitter:

The gap spanned from Kentavious Caldwell-Pope‘s missed 3-pointer with 6:21 left to Brook Lopez‘s missed shot with 3:51 to go.

New York wound up winning in OT, 113-109.

Joel Embiid says he thinks people are about to start hating him

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Philadelphia 76ers have been the Twitter darlings of the NBA for the past few years. Thanks to former general manager Sam Hinkie and the tanking process, guys like Joel Embiid have become even more admired now that the team is in the hunt for a playoff spot.

Of course, players like Embiid are part of the generation that is always online, and the fact that they play in the NBA doesn’t keep them from participating in social media with their contemporaries. Embiid has a great Twitter feed, and is often out on it trying to get dates from the likes of Rihanna while trolling other NBA stars on Instagram.

Of course, as we’ve seen with players in the past, good fortune does not always shine forever. Indeed, conscious of this fact, Embiid as much to ESPN’s Ramona Shelburne during a recent interview.

Via ESPN:

People love you at the beginning,” Embiid explains. “But at some point they’re gonna start hating you. LeBron. Russell Westbrook. All the superstars. Even Steph. He’s so likable. He does nothing wrong, but some people still hate him. It just comes with the nature of it. I’ve seen it.

“I feel like I’m about to go through it. I think it’s coming. People always want something new.”

The ups and downs of how NBA fandom changes the perception of certain players is fascinating, and some even try to directly manipulate that. And indeed, while Embiid is certainly hilarious on social media, the best thing to keep fans at bay will be him staying on the floor and playing games for the Sixers.

Let’s hope that keeps happening and nobody turns on him anytime soon.

Gregg Popovich says he was ‘guilty of over-coaching’ LaMarcus Aldridge

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LaMarcus Aldridge has been much better for the San Antonio Spurs this season. This comes after a tumultuous offseason in which it became clear that Aldridge was unhappy with his time in Texas.

That information came to light over the summer, and indeed both Aldridge and Spurs coach Gregg Popovich sat down to have a discussion to work out their differences in preparation for the upcoming season.

The results have been stupendous, with Aldridge playing better than ever in San Antonio despite the team lacking star Kawhi Leonard. Aldridge is averaging career highs in points per-100 possessions, which makes sense given his career-high 119 offensive rating.

Apparently part of Popovich’s change in dealing with Aldridge was how he coached him. Popovich told NBA.com recently that he made the mistake of over coaching Aldridge, saying that the veteran didn’t need as much guidance as young star players did when they came to him in the past.

Via NBA.com:

“We broke bread a few times, talked about it, laughed about it, discussed what we thought needed to happen, and frankly 95 percent of it fell on me because I made an error in trying to change him too much. That might sound odd, but he’d been in the league nine years and there’s one way he plays on the offensive end and feels comfortable with. I tried to turn him into Jack Sikma, told him I was going to teach you how to play on the elbow, go on the wing, face up. It was confusing for him. It really didn’t fit his style of play. I was guilty of over coaching in a sense.

“We came to an agreement on what had to happen. Well, on defense, I told him ‘I’m going to get on you like I do everyone else. But on offense, I don’t even want to talk to you. When they double you, kick it. Other than that, you be LaMarcus Aldridge.’ You see the result right now. He’s happy, confident and kicking everybody’s butt.”

Now that everything is sorted for the Spurs, we just have to watch out for them as they gain momentum heading into 2018. Leonard made his debut for the season on Tuesday night against the Dallas Mavericks, and as a publication time he had nine points in 10 minutes.

God help us if Gregg Popovich has finally found a way to make the mercurial LaMarcus Aldridge happy and pair him with a fully healthy Leonard.

Raptors’ Jonas Valanciunas offers advice to Ball brothers on Lithuania

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Lithuania is a hoops-mad country.

The Baltic nation has fewer people in it than the Seattle-Tacoma metropolitan area, yet it has three players in the NBA right now — Jonas Valanciunas, Donatas Motiejunas, and Mindaugas Kuzminskas — and has put 11 players in the league total (such as Zydrunas Ilgauskas, Arvydas Sabonis, and Sarunas Marciulionis). The country has won three bronze medals in the Olympics ( 1992, 1996, and 2000). It’s Lithuanian league also has been the launching pad for Celtics’ Aron Baynes to make the NBA.

Now the Ball brothers LiAngelo and LaMelo are headed there on professional contracts.

One of those players — the Raptors’ Valanciunas, had advice for the Ball brothers, speaking to ESPN.

“They’re getting themselves into a great opportunity. Lithuania is beautiful country… We have great basketball history. We’re such a small country, but we have many, many great players. Our basketball school is good., so they chose a really good school. They just gotta work hard — it’s all about working. You can be as good as you can be by working. Talent is one thing, but work you put in, that’s gonna show up.

“If they have any problems, let me know. I can help them out.”

Good luck finding anyone around the NBA who thinks this ends well, especially those who know the Ball family. They are sending a college freshman and a high school junior to a small city in a former Soviet bloc country with a very different culture, that will be a major adjustment. The coach doesn’t speak English and his former American players have not spoken highly of him. The Lithuanian league itself has men — far more physically developed than the Ball brothers — and is known for a physical style of play. It’s also known as a league where the players have a reasonably high hoops IQ and don’t like undisciplined players.

But if LiAngelo and LaMelo have any problems, they can call Valanciunas.