About the owners losing money, it’s really complicated

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There are NBA owners who have wondered if player endorsements should not be money in the basketball related income pool — those players wouldn’t make their money if not for the teams.

But what about the other side of that coin — money the owners make on other businesses because they own and NBA franchise as well. Owners have complex finances and there are other projects they have that directly or indirectly feed off the NBA teams. For example, Cavaliers’ owner Dan Gilbert has casinos he got a sweetheart deal to build based on his NBA team’s popularity during the LeBron era, for example. That’s not money the Cavs make, but it’s money the owner would not have gotten without also owning the Cavs.

Which brings us to the Brooklyn Nets, the name they will take on next season. Bruce Ratner owned the team until he sold last year to Mikhail Prokhorov and it is one of David Stern and the owners talking points about how Ratner sold the team at a loss.

But Malcolm Gladwell tells a different, more complex story at Grantland. One that involves Ratner making a lot of money on his Atlantic Yards real estate deal — where the new arena will be central to new housing and retail — and needing the Nets to make sure the city and many residents were behind him taking over an existing neighborhood to get this built.

Ratner has been vilified — both fairly and unfairly — by opponents of the Atlantic Yards project (where the Nets new home is going up). But let’s be clear: What he did has nothing whatsoever to do with basketball. Ratner didn’t buy the Nets as a stand-alone commercial enterprise in the hopes that ticket sales and television revenue would exceed players’ salaries and administration costs. Ratner was buying eminent domain insurance. Basketball also had very little to do with Ratner’s sale of the Nets. Ratner got hit by the recession. Fighting the court challenges to his project took longer than he thought. He became dangerously overextended. His shareholders got restless. He realized had to dump the fancy Frank Gehry design for something more along the lines of a Kleenex box. Prokhorov helped Ratner out by buying a controlling interest in the Nets. But he also paid off some of Ratner’s debts, lent him $75 million, picked up some of his debt service, acquired a small stake in the arena, and bought an option on 20 percent of the entire Atlantic Yards project. This wasn’t a fire sale of a distressed basketball franchise. It was a general-purpose real estate bailout.

Did Ratner even care that he lost the Nets? Once he won his eminent domain case, the team had served its purpose. He’s not a basketball fan. He’s a real estate developer. The asset he wanted to hang on to was the arena, and with good reason.

This is essentially what AEG did with Staples Center (minus the eminent domain) — they got a piece of the Lakers and were able to build a new, modern arena around which they have now built the L.A. Live complex — home to shops, restaurants, condos, the Nokia Theater, hotels and the West Coast headquarters of ESPN. AEG made a lot of money off all that, something that would not have been possible without the energy of Staples and particularly the Lakers. Frankly, Kobe Bryant should be getting a check from L.A. Live.

Which all comes back to how complex figuring out whether a team made or lost money can be. Did Ratner lose money on the Nets in the real sense of the word? If an NBA owner has control of both the arena and the team, there is a lot of ways money can be moved around. Remember, only 40 percent of in-arena sponsorship money is counted by the league as “basketball related income,” but if the owner also owns the building he gets the other 60 percent, too.

NBA finances are a complex web. No doubt the recession has hit the owners and NBA franchises, but be careful about believing everything the league tells you about money lost.

Hawks trade Harkless, second-round pick to Thunder for Vit Krejci

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The Atlanta Hawks just saved some money, getting under the luxury tax line. The Oklahoma City Thunder picked up a second-round pick for their trouble of taking on a contract.

The Hawks have traded Moe Harkless and a second-round pick to the Thunder for Vit Krejci the teams announced (Shams Charania of The Athletic was first).

This saves Atlanta a little over $3 million, which moves them from above the luxury tax line to $1.3 million below it. While the almighty dollar was the primary motivation in the ATL, the Hawks also pick up a development project. Krejci showed a little promise in his rookie season, appearing in 30 games and averaging 6.2 points plus 3.4 rebounds a night, before having his knee scoped in April.

Krejci was on the bubble of making the team in Oklahoma City, now the Thunder pick up a second-round pick for a guy they might have waived anyway.

Harkless, 29, is on an expiring $4.6 million contract, which fits nicely into the Disabled Player Exception the Thunder were granted for Chet Holmgren’s season-ending foot injury.

The Thunder are expected to waive Harkless and buy him out, making him a free agent. However, they could keep him and see if another trade could net them another second-round pick.

Lonzo Ball says ‘I can’t run’ or jump; Bulls’ Donovan has to plan for extended absence

Milwaukee Bucks v Chicago Bulls
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Officially, Lonzo Ball will be out 4-6 weeks after getting his knee scoped this week.

However, this is his second surgery on his left knee this year — he had meniscus surgery in January, after which he was never able to return to the court — and there are concerns Ball could miss significant time again. And coach Billy Donovan has no choice but to plan for an extended absence.

Ball did a Zoom call with reporters on Tuesday and it’s hard to come away from what he said overly optimistic. Rob Schaefer reported on the call for NBC Sports Chicago:

“Literally, I really can’t run. I can’t run or jump. There’s a range from, like, 30 to 60 degrees when my knee is bent that I have, like, no force and I can’t, like, catch myself. Until I can do those things I can’t play,” Ball said. “I did rehab, it was getting better, but it was not to a point where I could get out there and run full speed or jump. So surgery is the next step.”

The symptoms are something Ball said he has never dealt with and have left doctors, in his words, “a little surprised.”

It’s never good when doctors are surprised. Ball said the doctors don’t see anything on the MRI, but there is clearly something wrong, so they are going in and looking to find the issue and fix it.

Ball has been diligent in his recovery work from the start, the problem was pain in his knee. Something was still not right after the first surgery. Whatever it is.

The 4-6 week timeline would have Ball back in early November, but you know they will be overly cautious with him after the past year. Coach Billy Donovan was honest — he has to plan for a season without Ball.

The Bulls need Ball in a deep and challenging East. He brings defense, pushes the pace in transition, and takes care of the rock. Chicago has other players who can do those things individually — Alex Caruso can defend, Coby White pushes in transition, Goran Dragic takes care of the ball — but the Bulls lack one player who can do all those things. At least they lack one until Ball returns.

Whenever that may be.

Deandre Ayton says he hasn’t spoken to coach Williams since Game 7

Phoenix Suns v New Orleans Pelicans - Game Four
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In a Game 7 against the Mavericks last May, Suns coach Monty Williams benched center Deandre Ayton, who ended up playing just 17 minutes in an ugly, blowout loss for Phoenix. When asked about it after the game Williams said, “It’s internal.”

Ayton and Williams have not spoken since then, according to Ayton.

Yikes. Remember that includes a summer where the Suns would not offer Ayton a max contract extension so he went out and got one from the Pacers, then the Suns instantly matched it. Ayton did not sound thrilled to be back in Phoenix on Media Day, and he was rather matter-of-fact about dealing with his coach.

It’s what every fan wants to hear — “this is just my job.”

Reporters asked Williams about this and he played it off, saying he hasn’t spoken with a lot of players yet.

It’s just day one of training camp, but there are a lot of red flags around the Suns: owner Robert Sarver being suspended and selling the team, Jae Crowder not in camp waiting to be traded, and now not a lot of communication between the team’s star center and its coach.

Maybe it all amounts to nothing. Maybe the Suns get on the court, Chris Paul looks rejuvenated, Devin Booker looks like Devin Booker, and none of this matters. But what had looked like a stable situation not that long ago now has a lot of red flags flying heading into the season, and that has to concern Suns fans.

 

Report: Lakers would have traded both first-round picks for Irving, Mitchell

Utah Jazz v Brooklyn Nets
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“If you make that trade, it has to be the right one, you have one shot to do it,” Lakers GM Rob Pelinka said at media day, pulling back the curtain a little on his thinking of trading two first-round picks. “So we’re being very thoughtful around the decisions on when and how to use draft capital in a way that will improve our roster.”

That tracks with the consistent messaging out of Los Angeles all summer: The Lakers would only trade the only two first-round picks they fully control for the rest of this decade (2027 and 2029) for a deal that made them a contender.

That meant landing Kyrie Irving or Donovan Mitchell, ESPN’s Dave McMenamin said on The Hoop Collective Podcast.

“I’ve been told that had the Lakers been able to acquire, Kyrie Irving, or the Lakers been able to acquire Donovan Mitchell, either of those players, the Lakers were willing and able to move both those [first-round] picks to do it.”

The problem for the Lakers is the market price for elite talent has moved beyond two first-round picks. The Jazz got three unprotected first-round picks (2025, 2027 and 2029) plus the rights to two pick swaps (2026 and 2028) in the Mitchell trade, not to mention three players: Lauri Markkanen (who they will try to trade for another pick), Collin Sexton, and Ochair Agbaji. The price for Kyrie Irving would have been at least as high, if the Nets really wanted to trade him.

The Lakers traded all of their young players and most of their picks to land Anthony Davis and Russell Westbrook, except for the ones they let walk away (Alex Caruso). Before he was judicious in making trades like he was this offseason, Pelinka made deals that backed him into this corner.

The Lakers likely could use both picks to acquire Buddy Hield and Myles Turner out of Indiana (sending Westbrook back), but that doesn’t make Los Angeles a contender (a playoff team, but not a title threat) and it messes with the plan to have around $30 million in cap space next summer to chase a big name.

The Lakers you see in training camp are the Lakers you get. At least for now.