Foul called on NBA owners’ claims of money lost

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The NBA owners continue to say the lockout is going on because the players don’t understand the fundamental need to change the league’s poor financial system — that $300 million was lost this past year.

More and more reports are questioning the severity of that loss.

The latest is Nate Silver at the New York Times, who questions the heavy losses the owners claim, and particularly the claim that player salaries are to blame.

On this point he is spot on — NBA players salaries make up 57 percent of the Basketball Related Income the league takes in. That number is fixed in the current Collective bargaining agreement — it is a fixed cost, the owners know exactly how much the players will cost the league as a whole. It’s the non-player costs that increase faster than income, Silver notes.

Growth in non-player expenses has outpaced that of salaries, having increased by 13 percent over five years and 43 percent over 10 years. Although some of this undoubtedly reflects sound business ventures, like the league’s investments in digital media or efforts to expand the game internationally, they have nevertheless had a reasonably large effect on the league’s bottom line. Had nonplayer expenses been the same in 2009-10 as they were in 1999-2000 (adjusted for inflation), the league would have made a record profit that year.

Even with those costs, Silver says the owners are making money.

Even as it stands, however, the Forbes data suggests that the league is still profitable. Its operating income — revenues less expenses (but before interest payments and taxes) — is estimated to have been $183 million in 2009-10, or about $6 million per team. The N.B.A.’s operating margin (operating income divided by revenues) was about 5 percent in 2009-10 and has been about 7 percent during the life of the current labor deal.

A 5 percent or 7 percent profit is not dissimilar to what other businesses have experienced recently. Fortune 500 companies, for instance, collectively turned a 4.0 percent profit in 2009 and a 6.6 percent profit in 2010 (both figures after taxes). Profit margins in the entertainment industry, in which the N.B.A. should probably be classified, have generally been a bit lower than that.

Silver goes on to say that a lot of the losses the owners claim are tied to depreciation and amortization when a team is sold. However, the league has noted that amortization is not used in the $300 million loss figure for the past season. Silver misses the mark there.

The players need to understand that some owners are hurting and there needs to be adjustments to the system. Things like the players hotel rooms and food per diems are not taken out of that 57 percent — they get to count the revenue minus any expenses. Those expenses are rising. Players need to give up some of their pie (maybe by rather than taking 57 percent of the gross allowing some deductions of league expenses from that before the “net” is divided up, maybe just taking a much smaller percentage of the gross). The owners have some valid points about the needs to alter the system to create a chance for all teams to make money (although revenue sharing must be part of that).

But it’s still hard to buy the owners claims that the league is in that much financial peril. Particularly when people are stepping in to pay record prices for franchises.

Pat Riley: Dion Waiters not recovered for start of training camp, “unlikely” for start of season

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This is a setback.

When Dion Waiters had ankle surgery 30 games into last season, the hope was that he would be healthy for the start of this season and return to the post All-Star form of 2017, when his hot play (15.6 points per game, 41 percent from three and carrying a heavy offensive load) led the Heat to offer him a four-year contract.

Turns out, that’s not going to happen.

It was Pat Riley who made the announcement, speaking to the media.

Waiters was not healthy last season, and while he averaged 14.3 points a game he was not nearly as efficient — 30.6 percent from three, shooting 39.8 percent overall, a PER of 10.5.

This could move Dwyane Wade into the starting lineup to open the season. Beyond that, the Heat have the guard depth to survive this with Wade and Wayne Ellington at the two, plus Goran Dragic, Tyler Johnson, Malik Newman, and Briante Weber heading into camp.

Waiters being out also is bad news for the player but could save the franchise money on another front: Waiters receives a $1.1 million bonus if he plays in 70 games this season. If he misses the start of the season, he becomes far less likely to make that threshold.

Michael Jordan donates $2 million to Hurricane Florence recovery efforts

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Michael Jordan is North Carolina through and through. His father is from Wallace, he played his high school ball in Wilmington, he won a national championship in college as a North Carolina Tar Heel in Chapel Hill, and he is now the part-owner and chairman of the Charlotte Hornets.

All those cities have been in the news the past several days for the wrong reasons — they have been part of the devastation Hurricane Florence has unleashed on the region. There are 34 reported deaths from the storm, 26 of those in North Carolina.

To help out, Jordan is donating $2 million to the relief and recovery efforts. Jordan is contributing $1 million each to the American Red Cross and the Foundation For The Carolinas’ Hurricane Florence Response Fund.

“It just hits home,” Jordan told The Associated Press. “I know all of those places: Wilmington, Fayetteville, Myrtle Beach, New Bern, and Wallace… So quite naturally it hits home, and I felt like I had to act in a sense that this is my home.”

This is not all Jordan and his Hornets are doing to help out. Charlotte and Fanatics teamed up to design a T-shirt with the Hornets logo in the middle of the states of North and South Carolina surrounded by the words “Carolina Strong” and 100 percent of the net proceeds from the shirt sales will go to the Foundation For The Carolinas’ Hurricane Florence Response Fund

On Friday, more than 100 members of the Hornets organization will partner will help pack disaster food boxes at Second Harvest Food Bank of Metrolina. The disaster food boxes – with Food Lion donating the food — will be shipped to Wilmington, N.C., Fayetteville, N.C., and Myrtle Beach, S.C., and distributed to those who have been directly impacted by the hurricane. The organization’s goal is to pack 5,000 boxes.

 

Report: Celtics were working with Jabari Bird on mental-health treatment before alleged domestic-violence incident

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Celtics guard Jabari Birdaccording to his girlfriend – attacked her over four hours at his apartment, choked her until she passed out, kicked her in the stomach, experienced seizure-like symptoms (allowing her to escape) then threatened to commit suicide if she didn’t return.

Steve Bulpett of the Boston Herald:

People around Bird have been aware that he recently had been experiencing, according to one source close to him, “panic attacks and things like that. It wasn’t a long-term thing, but everyone knew. The Celtics knew there was something going on and he was being treated.”

Said another, “This wasn’t one of the domestic-violence situations you usually see where someone gets jealous for one thing and loses control. There was something deeper going on here with (Bird). This was a bad situation.”

First, I’m uncomfortable with Bird’s mental-health issues being discussed publicly by people who remain anonymous. Hopefully, this was an authorized leak by Bird. But if that’s the case, why did his spokespeople seek anonymity? If Bird did not want this information revealed, that’s far more troubling.

But the information is public, and it’s worth discussing. When allegations first became known, many called for Boston to release Bird and the judicial system to throw him in prison. And maybe that will ultimately be the just conclusion. But this case could be far more complex than it initially appeared.

Anthony Davis and Pelicans enter yet another season full of speculation about their future together

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This is the latest of NBC’s NBA preview stories, with at least one a day appearing on these pages until Oct. 16, when the NBA season kicks off. We will look at teams and topics around the NBA throughout the series, today it is New Orleans.

In Anthony Davis‘ lifetime, 22 players have made an All-NBA first team during their first six seasons. Just seven did so without reaching a conference finals in that span. Of those seven, only one began his seventh season with his original team.

Anthony Davis is set to become the second.

Davis, a three-time All-NBA first-teamer, has made the playoffs only twice and won a series only once in six years with the Pelicans. He’s following the footsteps of Kevin Garnett, who spent his first 12 seasons with the Timberwolves while advancing in the playoffs only once with them, in his ninth season.

That’s the same Kevin Garnett whom Anthony used as somewhat of a cautionary tale about remaining loyal to a franchise. And the most recent example of someone who became an All-NBA first-teamer so young without reaching the conference finals: Chris Paul, who engineered a trade from New Orleans after his sixth season there.

Uneasy parallels abound for the Pelicans as they try to keep Davis happy.

Of course, Davis is neither Paul nor Garnett nor anybody but Anthony Davis. Davis has mostly stayed on message: His priority is winning in New Orleans.

I believe that. But what if he determines he can’t win enough with the Pelicans? Will he choose them or a team he believes offers a better chance of on-court success. That, I don’t know.

The Pelicans should gain clarity next summer, when they can offer Davis a super-max extension that projects to be worth about $240 million over five years (about $48 million annually).

If he were to wait to leave in 2020 unrestricted free agency, Davis would have a projected max with another team of about $152 million over four years (about $38 million annually). Even if he got traded before then so he could re-sign with his new team in 2020, his projected max would still be “just” about $205 million over five years (about $41 million annually). He can get the super-max from only New Orleans.

If Davis is predisposed to stay with the Pelicans anyway, why wouldn’t he just take that monster offer next summer?

Again, speculation centers on New Orleans’ underwhelming results since drafting him No. 1 overall in 2012. The Pelicans have tried to fast-track their ascension around Davis, repeatedly trading first-round picks. They haven’t won enough to justify that strategy, and it has resulted in a roster primed for disappointment going forward.

Jrue Holiday is nice. Nikola Mirotic is underrated. Julius Randle could take another step. Otherwise, New Orleans’ supporting cast doesn’t make a convincing case.

Of course, the Pelicans could exceed expectations. They sure did last year, winning 48 games and sweeping the third-seeded Trail Blazers even after DeMarcus Cousins‘ injury.

Davis is locked up for two more years. If he makes another All-NBA team next season, he’ll be eligible to re-sign for the supermax in 2020 no matter how he performs during the 2019-20 season. Next season is not necessarily a breaking point.

But it’ll be another data point in Davis’ ongoing assessment of New Orleans. That assessment will be guided by a new agent (maybe Rich Paul, who represents Lakers superstar LeBron James) – which only adds variability to the equation.

The stakes are high. The small-market Pelicans would likely fall into into irrelevance if they lose Davis, which is precisely why they won’t rush to move him. But if they’re going to lose Davis, they’re better off trading him while his value nears its peak so they can get assets that will help in a new era. Whichever team gets Davis will likely vault up the championship-contention ladder.

Eyes will be on Davis and New Orleans, searching for any sign of discord. That might not be fair considering all Davis has done to fit in with the Pelicans, but it’s also reality. The vultures are swarming.

It has been this way for years now. Davis and the Pelicans are used to it, and neither he nor the team has budged much from their stated plan of sticking together.

But the super-max-extension window is around the corner with only the upcoming season in between. It’ll be a big one for determining whether everything in New Orleans is still on track.