Foul called on NBA owners’ claims of money lost

16 Comments

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.

Watch Bulls coach Jim Boylen get bowled over by Denver’s Torrey Craig

Andy Lyons/Getty Images
Leave a comment

Chicago Bulls head coach Jim Boylen received a raise as part of the team deciding he deserved additional compensation after moving up from an assistant position.

Of course, what Boylen probably didn’t expect when he took the head job was to literally be in a more vulnerable position on the floor.

During Thursday night’s game against the Denver Nuggets, Boylen was it standing on the sidelines in front of his bench when an errant pass from Nikola Jokic sent Torrey Craig hurdling into Boylen.

Via Twitter:

Everyone appeared to be okay after the collision, but even still it feels like with the way things have gone for Boylen in Chicago, this could only happen to him.

Charles Barkley isn’t buying Kyrie Irving’s apology to LeBron James (VIDEO)

Getty
Leave a comment

Kyrie Irving made headlines on Wednesday night when he won the game for the Boston Celtics against the Toronto Raptors, then proceeded to call LeBron James to apologize about how he treated the Los Angeles Lakers star when the two were on the Cleveland Cavaliers together.

To many, the move seemed like a quick maturation of Irving as well as a surprising about face by the shifty point guard. Even LeBron thought that Irving calling him was out of character, saying as much to media on Wednesday.

However, some saw Irving’s comments and actions a little bit differently. Speaking on Inside the NBA on TNT on Thursday, Charles Barkley said that he felt Irving’s conversation with LeBron was actually a swipe at his current Celtics teammates.

Via Twitter:

To be fair, ESPN’s Brian Windhorst expressed a similar sentiment to Barkley’s on “The Jump” on Thursday, and I have to side with both of them. Their explanation of Irving’s comments make more sense than some kind of overnight maturation on the part of the Celtics star.

Irving is a very good player but he’s also a transparent marketer. His flat earth comments, his commercial that became a terrible movie … it’s all about his personal brand. Part of that is shifting blame away from himself as Boston — currently fifth in the East — continues to struggle.

I don’t think Irving is magically more mature. If anything, his apology is a self-serving attempt at comparing himself to LeBron and by association, the rest of the Celtics as the flotsam that has traditionally consisted the Cavaliers roster.

That’s really not a fair view of either side, and I don’t trust much of what comes out of Irving’s comments beyond their obvious marketing value.

Russell Westbrook hanging with his son Noah before the Lakers game was extremely cute (VIDEO)

Twitter
1 Comment

Russell Westbrook seems like a pretty intense guy. The Oklahoma City Thunder point guard has won an MVP not by being a pushover, but by pushing past opponents for triple doubles.

We have really rounded out Westbrook as a individual over the past couple of years, particularly after Kevin Durant decamped Oklahoma City for the Golden State Warriors. Part of that has been seeing Westbrook as a father, which we got more of on a Thursday before the Thunder took on the Los Angeles Lakers.

Before the game, Westbrook was seen on the floor hanging out with his son, Noah, and generally having a good time.

The result was, admittedly, extremely cute.

Via Twitter:

Noah Westbrook will be draft eligible in 2036. Set your calendars, I guess.

Michael Beasley tried to enter the game wearing his practice shorts (VIDEO)

Twitter
1 Comment

Michael Beasley has given us several hilarious moments over his career. The Los Angeles Lakers forward is known for being a bit of a draft bust as well as an enigmatic, often goofy NBA personality.

On Thursday as the Lakers got set to take on the Oklahoma City Thunder, Beasley was unable to check into the game thanks to a wardrobe malfunction on his part. Specifically, Beasley tried to enter the game while wearing his practice shorts.

Officials told him he couldn’t enter the game and Beasley quickly ran back to the locker room to change into the correct uniform.

Via Twitter:

LeBron James can’t return back to the Lakers soon enough.