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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.”

Report: J.B. Bickerstaff in talks to join David Fizdale’s staff in Memphis

HOUSTON, TX - APRIL 21:   Head coah J.B. Bickerstaff of the Houston Rockets looks on at Toyota Center on April 21, 2016 in Houston, Texas.  NOTE TO USER: User expressly acknowledges and agrees that, by dowloading and/or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Bob Levey/Getty Images)
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Now that former Heat assistant David Fizdale has accepted the Grizzlies’ head coaching job, he’s starting to put together his staff. One name to keep an eye on, according to John Martin of ESPN 92.9 in Memphis: J.B. Bickerstaff, who served as the Rockets’ interim coach this season after the team fired Kevin McHale in November.

The Rockets were a chemistry disaster this season, but Bickerstaff is highly regarded around the NBA in coaching circles. He was a candidate to keep the coaching job in Houston when the Rockets’ front office began their search, but he withdrew his name from consideration when he started receiving interest around the league as a lead assistant. It sounds like Memphis is one of the teams going after him, and he’d be a good hire for Fizdale’s staff.

Warriors’ owner Joe Lacob does “we’re not worthy” bow to Klay Thompson

OKLAHOMA CITY, OK - MAY 28:  Klay Thompson #11 of the Golden State Warriors drives against Kevin Durant #35 of the Oklahoma City Thunder during the fourth quarter in game six of the Western Conference Finals during the 2016 NBA Playoffs at Chesapeake Energy Arena on May 28, 2016 in Oklahoma City, Oklahoma. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Maddie Meyer/Getty Images)
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Warriors coach Steve Kerr called Thompson “ridiculous.” That may be an understatement.

Thompson had 41 points, hit an NBA record 11 three-pointers in a playoff game, and the Golden State Warriors don’t force a Game 7 without him.

Warriors owner Joe Lacob may have had the best response, he drops to his knees and does the “we’re not worthy” bow before Thompson in the hallway postgame. (As there are reports a return trip to the Finals again could be worth $40 million to the franchise, Lacob should be bowing to Thompson for making that even possible.)

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Hat tip Eye on Basketball.

Reports: Bucks to extend Jason Kidd’s contract, hire Jazz’s Justin Zanik as assistant GM

PHOENIX, AZ - DECEMBER 20:  Head coach Jason Kidd of the Milwaukee Bucks stands on the court during introductions to the NBA game against the Phoenix Suns at Talking Stick Resort Arena on December 20, 2015 in Phoenix, Arizona.  The Bucks defeated the Suns 101-95. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Christian Petersen/Getty Images)
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The Bucks have a promising young core — led by Giannis Antetokounmpo, Jabari Parker, John Henson, and Kris Middleton — but one that took a step back this past season. Setbacks can mean changes in the power structure of an organization, and there are changes coming to Milwaukee.

However, not in the coaching ranks — Jason Kidd isn’t going anywhere, reports Adrian Wojnarowski of The Vertical at Yahoo Sports.

The Bucks are moving toward a contract extension with Kidd as coach, league sources said.

There will be changes further up the ladder.

John Hammond, the GM who was the architect of the current roster, has just one year left on his current contract, and the Bucks are bringing in Utah’s Justin Zanik as a GM in waiting, according to Wojnarowski.

Zanik, an assistant general manager with Utah, will join the Bucks with a similar job title – and an agreement that he will eventually become the successor to Milwaukee GM John Hammond, sources said.

Zanik has constructed a strong reputation within the league as a front-office executive and previously a player agent. Milwaukee was aggressive in pursuing him to eventually lead the franchise’s basketball operations.

The key is can Zanik and Kidd work together — Kidd has consistently pushed for more power in personnel decisions.

Bucks owners Wesley Edens and Marc Lasry have been aggressive since buying the team, and you can expect Zanik will be under orders to get this team back to the playoffs and back on an upward trajectory. That may just take time as all their young talent comes together. Well, that and they have to figure out how to make Greg Monroe fit with everyone else.

Watch Klay Thompson’s record 11 playoff three pointers

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Klay Thompson was ridiculous. His shooting was some of the most incredible shooting you will ever see.”

That was how Warrior coach Steve Kerr described Thompson’s night — a playoff record 11 three pointers on his way to 41 points, sparking Golden State’s Game 6 win on the road. It wasn’t just the threes, it was the degree of difficulty on some of those shots — he was just in the zone. Not the Blake Griffin commercial zone, the real one.