Malcolm Gladwell says owners shouldn’t expect to make money

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Is owning a sports franchise a business or a toy?

Right now, the NBA owners are telling you the NBA is a business, and a bad one at that. One that needs to be fixed. Even if it means costing an NBA season.

But you look at owners like Mark Cuban and you see him treat it like a toy — he has said the Mavericks have lost money every year. He has been sued over it. He can kind of erase that on the books because he also owns American Airlines Center and he has said he will cover the debt. But he treats this as a toy and bought himself a title. (Go ahead and say the Heat are trying to buy a title, but the Mavericks paid $20 million more last year in salary and in the last decade only the Knicks have paid more.) Of course, Cuban has made his money on franchise valuation, that has flattened out a lot for owners who bought recently.

In an interesting piece over at Grantland, social commentator Malcolm Gladwell — he of Blink and Outliers and TED — says that NBA owners shouldn’t expect to make financial profit off a team. He notes that owners get a “psychic benefit,” an emotional benefit from owning the team that is what makes owning a sports team different than owning a car repair shop.

The rationale for the NBA lockout, from the owner’s perspective, goes something like this. Basketball is a business. Businesses are supposed to make money. And when profits are falling, as they are now for basketball teams, a business is obliged to cut costs — which in this case means the amount of money paid to players. In response, the players’ association has said two things. First, basketball teams actually do make money. And second, if they don’t, it’s not the players’ fault. When the two sides get together, this is what they fight about. But both arguments miss the point. The issue isn’t how much money the business of basketball makes. The issue is that basketball isn’t a business in the first place — and for things that aren’t businesses how much money is, or isn’t, made is largely irrelevant….

The Financial Times recently interviewed Diego Della Valle, the chief executive of the Italian luxury goods manufacturer Tod’s. Della Valle owns the celebrated Italian football club Fiorentina. “I ask if the decision to buy the club was made from the heart, or for business reasons,” the Financial Times interviewer writes. Della Valle replies: “With football, business reasons don’t exist.” Exactly.

The question to me has become, “has that attitude changed among owners?” I would say Gladwell’s perspective was true 20 years ago, it has shifted some now. The guys who form a partnership and spend hundreds of millions to get a team — guys who are leveraged — get their psychic benefit but do not let that get in the way of the bottom line. They are the hardliners pushing for change.

But should they feel that way? Or should they enjoy the psychic benefits (and the profits they will make when the team is sold) and stop treating their toy like a business? Not sure there is one simple answer to those questions.

LeBron, Grizzlies, NBA world reacts to death of Tyre Nichols

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Hours after the excruciating video of Memphis police fatally beating Tyre Nichols was released, the Memphis Grizzlies chose not to open their locker room and not speak to the media about it — it was too raw, too painful.

“The senseless loss of life for Tyre Nichols has really hit us hard,” Grizzlies coach Taylor Jenkins said pregame in an interview with local broadcast partner Bally Sports (via the Associated Press). “It’s been tough being on the road, not being home. I wish I could extend my arms through this camera right now to the family. They’re going through a lot.”

The Grizzlies weren’t the only ones who felt that way around the NBA, emotions were high around the league Friday (as they were around the nation). Miami, Atlanta, Cleveland, Minnesota and Milwaukee released states echoing what the Grizzlies said.

LeBron James used his platform to make a statement, as he has in the past.

Statements were released from the NBA, WNBA, players, the players union and more.

“This is just crazy,” Heat coach Erik Spoelstra said unprompted to open his press conference, discussing the video and incident.

Nichols, 29, was pulled over in a traffic stop by Memphis police officers on Jan. 7 and was beaten to death by five officers. The bodycam footage shows Nichols being brutally beaten as he calls out for his mother and is defenseless. Nichols died in the hospital three days later. The five officers involved have been fired and charged with second-degree murder.

Dolan says he he has no plan to sell Knicks, retire, but he loves facial recognition

Celebrity Sightings In New York City - October 06, 2022
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Knicks owner James Dolan has been better in recent years about staying out of the way of the front office and staying out of the media spotlight — both of which are good for the Knicks and their fans’ sanity.

However, he stepped back in the spotlight the past couple of days — doing an interview on “Good Day New York” on Fox 5 Thursday then WFAN sports talk radio on Friday — and reminded everyone why it’s best when he stays out of it. Here are the highlights of these interviews.

• Dolan isn’t going anywhere, saying to WFAN he is not selling the team, nor does he plan to retire. Via Fred Katz at The Athletic:

“I have no plans whatsoever to sell at this point. I’m not retiring anytime soon. It’s a family-controlled asset, so someone in the family will eventually own it.”

That was a bit of a pipe dream for Knicks fans, there had been no rumors of a sale. With the value of NBA franchises rising rapidly and Dolan enjoying being the owner of one of the biggest brands in the sport, there has been little chance of a sale.

• Dolan defended Madison Square Garden’s controversial use of facial recognition technology to ban attorneys from firms involved in lawsuits against the Knicks or MSG from entering the property (or other Madison Square Garden properties, such as Radio City Music Hall).

“At Madison Square Garden, if you’re suing us, we’re just asking of you — please don’t come until you’re done with your argument with us. And yes, we’re using facial recognition to enforce that…

“If someone is suing you, that’s confrontational. It’s adversarial. If you’re being sued, you don’t have to welcome that person into your home.”

Except, it isn’t a home, it’s a public building where sports and entertainment events take place for which tickets are sold. Also, there are fans saying they have been banned from the building because of social media posts critical of Dolan.

• This policy has created a considerable backlash, including from the New York Attorney General, who said the policy could violate anti-discrimination laws in the state. Lawmakers in the New York state assembly introduced a bill prohibiting sports venues — such as Madison Square Garden — from refusing entry to attorneys or others involved in lawsuits against the organization.

• Dolan said on FOX 5 that the State Liquor Authority reached out to the Madison Square Garden company saying the use of facial recognition technology in this manner could lead to a suspension of their liquor license.

“This isn’t going to bother me because I’ve been sober 29 years. I don’t need the liquor.”

Dolan even hinted he could do a dry New York Rangers game on Fox, but he backed away from that idea the next day speaking on WFAN.

• Dolan reiterated his support of current Knicks decision-maker Leon Rose.

Dolan also went on to say he expects the Knicks to make the playoffs this season, however, there is no timeline for the team to contend for a ring.

What will Rockets do at trade deadline? Send out Gordon? Bring in Collins?

Minnesota Timberwolves v Houston Rockets
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There’s a sense in league circles that this is the final season Houston will be okay with having one of the worst — as of today, the worst — record in the NBA. The Rockets hope to grab one of the big names at the top of the draft board this season, but they already have drafted Jalen Green at No. 2 (2021) and Jabari Smith Jr. at No. 3 (2022), plus made a draft night trade for Alperen Şengün (who is playing well). With cap space to spend and extensions coming up, the tanking days will be over.

How will that impact the Rockets at this trade deadline? Here are a few names to watch.

Kelly Iko at The Athletic reports the Rockets have interest in the Hawks’ John Collins and the sides have talked, but there is no real traction yet.

There has been nothing concrete from the Rockets — merely ideas floated by the Hawks to Houston among other teams — but the interest is real.

The Rockets could also be part of a larger, three-team trade to move Collins.

Eric Gordon remains on the trade block, as he has been for more than a year. Gordon has been frustrated waiting, but the Rockets have held out for what they thought was fair — a first-round pick — to no avail. That price likely comes down, and according to Iko at The Athletic, the front office is “more inclined to trade him now” than in the past, but the proof will be in a deal.

• Teams also are calling about K.J. Martin, according to Iko.

K.J. Martin, there continues to be interest in the 22-year-old combo forward who has been quite productive as a starter — averaging 14 points and seven rebounds on 35 percent shooting from 3 — but nothing concrete at this juncture in terms of offers on the table.

The Rockets like Martin, it’s going to take a serious offer to get them to consider it.

Knicks reportedly offered multiple first-round picks for OG Anunoby, got nowhere

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What are the Toronto Raptors going to do at the trade deadline?

It’s less than two weeks before the trade deadline and the entire NBA is still asking that question, the Raptors are the one team that could turn this trade deadline from a dud to epic if they decide to pivot toward a rebuild. Are they willing to trade players like OG Anunoby or Pascal Siakam, or will they look to add a more traditional big man such as the Spurs’ Jakob Poeltl, who has been linked to the Raptors in rumors? Everything seems to be on the table.

Anunoby is a player a lot of teams covet, including New York. The Knicks reached out to the Raptors, reports Ian Begley of SNY.TV.

“And Anunoby with Toronto, I mean, that would cost you a lot. That would cost you significant draft compensation. Maybe the Knicks are there, maybe they’re feeling like they could make the playoffs and make a big push if you added in Anunoby. I know that we reported they contacted Toronto on Anunoby and I was told in that conversation they offered multiple firsts. But this was a while back… Toronto has done a lot since then. But I don’t think the league is crystal clear on what [the Raptors] want to do on Anunoby.”

Anunoby is an elite on-ball wing defender who can be a finisher, averaging 17.3 points and 5.6 rebounds a game at age 25 — the asking price will start at two unprotected first-round picks in this market. The Knicks may have thrown some of their protected picks in the conversation, but Toronto’s asking price is reportedly sky-high because they’re not eager to get rid of him.

Anunoby is making $17.4 million this season and is under contract for $18.2 million next season, a fair price for what he brings to the court (he has a player option at $19.9 million in 2024-25). What the Raptors do with him may signal their direction.

At the deadline, most people around the league expect Toronto to trade Gary Trent Jr., but that’s it. Any other big moves are likely this offseason. If ever.