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 J.J. Redick’s game-winning three, it lifts 76ers past Magic 116-115

Leave a comment

PHILADELPHIA (AP) — JJ Redick hit a 3-pointer with 17 seconds left to lift the Philadelphia 76ers over the Orlando Magic 116-115 on Saturday night. You can see the video above.

Redick had his best game since moving to Philadelphia’s bench at the start of the season, scoring 31 points on 10-of-20 shooting, including eight 3-pointers.

Aaron Gordon had a chance to tie it with 10 seconds remaining but missed his second free throw, and a desperation heave by Terrance Ross missed the net entirely.

Joel Embiid had 32 points and 10 rebounds for the 76ers, including 19 points by halftime. He did it with an outside game in the first half but was more of a force down low after intermission.

Dario Saric scored 13 points and Robert Covington had 12 as the 76ers improved to 2-1 this season.

Evan Fournier had 31 points to lead Orlando. Nikola Vucevic added 27 points and Gordon had 20.

Ben Simmons left the game after the first quarter with a tight back, meaning Philadelphia had to lean that much more on Embiid and Redick.

With Simmons out, Markelle Fultz was given an opportunity to play extended minutes and run the offense. Fultz finished with eight points on 4-of-11 shooting and added seven assists with only one turnover.

However, with the game on the line, 76ers coach Brett Brown opted to use T.J. McConnell at the point and kept Fultz on the bench.

High scores have been common in the early part of the NBA season as teams are pushing the pace and trying more shots, especially from deep.

Both teams shot lights out from 3-point territory. The Sixers, paced by Redick, shot 17 of 34 (50 percent) while the Magic, led by Fournier’s six 3-pointers, shot 16 of 29 (55.2 percent).

Thirteen players attempted shots from beyond the arc, eight for Orlando and five for Philadelphia.

 

Young guys out: Sixers’ Ben Simmons, Knicks’ Kevin Knox leave games with (hopefully) minor injuries

Associated Press
Leave a comment

When the team’s young star goes down, or heads back to the locker room mid-game with a hitch in his step, an entire fan base holds their breath.

That happened tonight in Philadelphia with Ben Simmons and New York with Kevin Knox, but fortunately neither seems to be serious.

Simmons had hit a couple of layups but ran back up the court gingerly, like he was in pain, before asking out of the game at the 4:19 mark of the first quarter. He is not returning.

Simmons has been tearing it up for Philadelphia, averaging 16 points, 14 rebounds, and 9.5 assists per game through the Sixers first two. Philadelphia is off until Tuesday when they start a back-to-back in Detroit then head to Milwaukee.

New York’s Knox went down after Boston’s Terry Rozier tried to cut Knox off in transition and fouled him.

The Knicks announced it was a sprained ankle.

Knox drags that ankle behind him in an awkward way after the collision, let’s hope it’s nothing more than a mild sprain.

Both a tight back and a sprained ankle are things that can be worse the next day, keep your eyes out for updates on these guys.

Grizzlies’ starter JaMychal Green suffers broken jaw, has surgery, out at least 4 weeks

Getty Images
Leave a comment

For a team that needs everything to go right to make the playoffs in the deep West, this is a significant setback.

Grizzlies starting forward JaMychal Green will be out at least a month, likely more, with a broken jaw suffered against the Hawks on Friday night, the team announced.

“Resume basketball activities” means start to practice, which would make his return more like six weeks. For some comparison, when Nikola Mirotic has his jaw broken last season (in very different circumstances, thanks again Bobby Portis) it took about seven weeks for him to return to the court.

For Green and Grizzlies fans, this is the worst kind of deja vu — last season Green sprained his ankle four minutes into the team’s home opener and missed the next dozen games.

Green is a solid three for the Grizzlies, averaging 7.5 points and 6 rebounds through two games this season (which is right in line with his numbers this season).

This likely means rookie Jaren Jackson Jr. — who has impressed coming off the bench in two games, as he did at Summer League — moves into the starting lineup. That should be interesting for the Grizzlies.

Maintenance rest starts early: Kawhi Leonard, Gordon Hayward, Jimmy Butler all out Saturday

Getty Images
3 Comments

Last season the NBA leaned in on teams resting players, particularly in high-profile, televised games. The NBA built in rest before those games to help, and teams mostly played along, but players who teams wanted to be cautious with still got their rest. That is not changing now, NBA teams have science to back it up.

The rest is starting early this season — Toronto’s Kawhi Leonard, Boston’s Gordon Hayward, and Minnesota’s Jimmy Butler are all out Saturday night on the second night of back-to-backs.

Neither of these should be a surprise. Both Hayward and Leonard are coming off injuries that cost them a season and both are clearly feeling their way back into this season (Leonard seems ahead of Hayward on that front so far). Both Toronto and Boston have their eyes on May and June, there is no reason to push a player and risk injury in October that could be a much more significant setback.

In Toronto, OG Anunoby will start on the wing for Leonard. In Boston, Aron Baynes will start as Brad Stevens goes big.

In Minnesota…

It will be interesting to see how the Timberwolves come out against Dallas without Butler, who is their spark plug. Andrew Wiggins and Karl-Anthony Towns should step up and have big nights to lead the team, this is a game Minnesota should still will, but how will they respond on a back-to-back? Something to watch.