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.

One last look back: Best dunks of All-Star Weekend (VIDEO)

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Defense? That’s one thing that rarely makes an appearance All-Star weekend.

Combine that with the game’s best athletes and what you get are three days of insane dunks.

The NBA put this together, the best dunks of All-Star weekend in Charlotte. Enjoy.

Wizards’ Bradley Beal: ‘Recruiting process is really going alright…I’m trying’

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LeBron James went out of his way to say he was not recruiting guys on his free-agent heavy All-Star Team.

Bradley Beal had no such hesitation, he tried to recruit guys, as he told Chase Huges of NBC Sports Washington.

“The recruiting process is really going alright. It’s going alright. I’m trying,” Beal said. “This is new for me. I’m definitely getting some ears and seeing what guys are looking for.”

Beal was too smart to name names — that would have brought a fine from the league — but he said some guys asked if he was happy where he was, while other guys he talked to about the possibilities in Washington.

The problem is while the Wizards will have some cap space after trading Otto Porter and Markieff Morris (and assuming they don’t pick up the option on Jabari Parker) but they will be nowhere near the max cap space needed to land the elite free agents at the All-Star Game (Kevin Durant, Klay Thompson, etc.). Even the second-tier All-Star free agents such as Khris Middleton will get max offers. Same with players who just missed the game, such as Tobias Harris.

If the Wizards renounce free agents they can get to $9 million in cap space, stretch and waive Ian Mahinmi and they can get to $18 million. That’s the top end. Meaning the Wizards will have room to make moves for good rotation players, but with John Wall‘s supermax extension kicking in at $38 million next season flexibility is limited. Genuine upgrades will be hard to come by.

Predicting what Washington GM Ernie Grunfeld will do next summer is a fool’s errand, but Beal is doing his part to try and bring more talent into Washington.

Kevin Garnett says 2000 Olympic team had $1 million bounty to dunk on Yao Ming

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Team USA earned a Gold Medal in the 2000 Olympics in Sydney, led by Vince Carter, Kevin Garnett, and Alonzo Mourning. Lithuania made the Americans work that year, losing by just nine in pool play then by two points in the semi-finals.

That’s not what anyone remembers from those Olympics, they remember Vince Carter doing this to 7-footer Fredric Weiss of France.

Recently Garnett sat down with Dwyane Wade for an interview (which airs on NBA TV today) and he told a fantastic story about that dunk. (Hat tip to Yahoo Sports)

Everything just paused. First of all, people didn’t know, we had a bounty out on Yao Ming. The whole USA team had a bet. We had a million dollar bet on who was going to be the first person to dunk on Yao Ming. None of us did. We all tried to dunk on Yao, but he would block it or we would miss. So, the first thing I thought of when I saw Vince dunk over Frederic was oh s***, you won the million dollars. But then I realized it obviously wasn’t Yao. I pushed Vince, and if you look at the clip, he almost punches me in the face by accident. But my first thought was, oh s***, you won, you got the million.

KG has the best stories.

MSG denies rumor James Dolan looking to sell Knicks

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Rumors that James Dolan is considering selling the Knicks — which elicits a “Hallelujah” chorus from Knicks fans — have been cropping up for a couple of years now. There were rumors he wanted to spin off the Knicks and Rangers into their own company to be sold. That’s just one, there are others — he confirmed he got a feeler $5 billion, but never a firm offer, for the Knicks — and each time he has shot them down.

This is no different.

On his latest Podcast, the Ringer’s Bill Simmons said he had heard that Dolan wanted to focus more on concerts/in-game experiences in Madison Square Garden and that the Knicks were “available.”

The Madison Square Garden Company released this statement (hat tip New York Daily News).

“The story is 100% false. There has been nothing. No discussions. No plans to have discussions – nothing.”

That’s pretty unequivocal.

While Dolan may entertain the idea on some level of selling the Knicks, until he takes concrete steps to do so — not rumors, but actual, documented moves — I’m not buying it. He’s sitting on a gold mine that keeps going up in value, despite how he manages it, so why sell now? Knicks fans that buy this rumor will likely end up like Charlie Brown trying to kick the football.