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.

Raptors hire Spurs video coordinator, who just happens to be Kawhi Leonard friend

Getty Images
1 Comment

Jeremy Castleberry played his high school ball in Riverside, California, on the same team as Kawhi Leonard. When Leonard went on to San Diego State for college, Castleberry went too and was a walk-on for that team.

When the Spurs drafted Leonard, it was not long before Castleberry was a video coordinator and on the staff in San Antonio. Now Leonard is a Raptor so… you know what’s coming. Adrian Wojnarowski of ESPN explained it well.

The Toronto Raptors are hiring San Antonio Spurs staffer Jeremy Castleberry — a close friend of Kawhi Leonard — to a position on their coaching staff, league sources told ESPN.

Castleberry has worked with Leonard as a Spurs staffer and played with Leonard in high school and at San Diego State, where he was a walk-on.

Is this alone going to keep Leonard a Raptor next summer when he’s a free agent? No. But this is how the game is played — make the star player you’re recruiting feel comfortable, wanted, a key part of everything. Bringing in a friend to a new city for him fits right into that plan.

The smart money is still on Leonard bolting next summer to go to Los Angeles, but if the Raptors are able to change his mind — ala Paul George — it will not be one big thing but a thousand little ones. And a lot of wins. But hiring Castleberry is a start.

Brandon Jennings signs to play in Russia next season

Getty Images
1 Comment

Brandon Jennings has just never been the same since his 2015 torn Achilles. He hasn’t shot over 40 percent from the floor for a season since then, he hasn’t moved well defensivly, and he had a PER of 19.3 the season it was torn and it’s never been above 13.7 for a season since then. In the past couple of seasons he has played in the G-League and China, and he played 14 games at the end of the season for the Bucks last campaign.

This summer, there were no offers. He is now headed to Russia, according to multiple reports, including EuroHoops.net. He will play for Zenit St Petersburg.

He’s only 28 years old, there is time for him find a way to make his game fit into the NBA landscape again. He’s just not there yet, and maybe the opportunity in Russia will lead him there. If not, he’s still getting paid to play at a high level.

Some owners reportedly want access to mental health files of players

Getty Images
1 Comment

If you read one thing NBA related today, it should be the first installment of Jackie MacMullan’s brilliant series at ESPN on the mental health of players and staffs in the NBA, and how the league is handling it. MacMullan not only got Kevin Love and Paul Pierce to open up about their challenges, but she also got into the challenges the league faces in confronting this issue head-on.

One such challenge: Owners wanting access to players mental health “files.”

NBA Commissioner Adam Silver, players union executive director Michelle Roberts and their respective teams are reportedly working on a new mental health policy for the league. Privacy is going to be a big part of that. From MacMullan:

Yet there remain many obstacles to confront, chief among them the stigma attached to mental health that prompts many players to suffer in silence. The union also insists that mental health treatment be confidential, but some NBA owners, who in some cases are paying their players hundreds of millions of dollars, want access to the files of their “investments.” That is not, however, the league’s position. “The NBA fully supports protecting the confidentiality of players’ mental health information and, accordingly, committed to the players association that any mental health program we undertake would do so,” NBA spokesman Mike Bass says.

Confidentiality, says Love, has to be non-negotiable. Without it, he says, he never would have become comfortable enough to announce from that All-Star dais that he was seeking treatment.

Those files must be private. This is different from a torn knee ligament or sprained ankle (and on those we have HIPPA laws for good reason). For one, this is something more unpredictable in treating. Second, it comes back to the stigma of mental health issues and how the information about them might be used.

That stigma still exists, both in society and the NBA — McMullan gets into the players and their wives talking behind Love’s back All-Star weekend, and the players currently seeking treatment who do not want it public. The “real men don’t talk about this” mentality is everywhere, but it has fertile ground in professional sports locker rooms where players see themselves as invincible.

That mentality, that stigma will be the hardest thing to change in altering the culture of mental health issues in the NBA. There are no easy answers here. Does anyone think the owners who want access to those files wouldn’t use against the player in negotiations (never underestimate an owner’s effort to gain leverage)?

The players’ union will not allow that in whatever the framework is for the leagues’ new mental health policy. Nor should they.

Love, DeMar DeRozan, Royce White and others broke barriers stepping forward into the spotlight to discuss their challenges. But there are a lot of barriers still up, and a lot of work for both the NBA and society to do on this front. And privacy must be part of that.

Rebuilding Hawks add depth by signing Daniel Hamilton, Alex Poythress.

Getty Images
Leave a comment

ATLANTA (AP) — The rebuilding Atlanta Hawks have added depth by signing guard-forward Daniel Hamilton and forward Alex Poythress.

Poythress was signed to a two-way contract, so the former Kentucky player will split his time with the Hawks’ G League Erie team.

Hamilton is on a fully guaranteed one-year contract after impressing the Hawks playing for the Thunder Summer League team. He averaged 2 points in six games with Oklahoma City last season while on a two-way contract with the Thunder. He spent most of the season with the G League Oklahoma City Blue.

Poythress averaged 1 point in 25 games with Indiana last season. He began the season on a two-way contract.