Why did Steve Ballmer pay $2 billion – nearly double Bank of America’s valuation – for the Clippers?
Because he loves basketball?
To boost his profile?
Because he wanted a platform to act like a maniac?
To undermine Apple one customer at a time?
Those probably all contributed, but here’s one more – and it’s a big one. $1 billion big.
Arash Massoudi and Alan Livsey of the Financial Times (hat tip: Dan Devine of Ball Don’t Lie):
An FT analysis of US tax laws shows that Mr Ballmer could claim about half of the purchase price in current terms over the next 15 years against his taxable income. The credits can be claimed under a little-known feature of the tax code covering so-called active owners of sports franchises.
The exemption for sports teams was brought into law about a decade ago to resolve concerns over how media rights were accounted for, tax experts said. But they also create a powerful incentive for wealthy individuals to indulge in projects they are passionate about, in effect subsidised by the US government.
Under an exception in US law, buyers of sports franchises can use an accounting treatment known as goodwill against their other taxable income. This feature is commonly used by tax specialists to structure deals for sports teams. Goodwill is the difference between the purchase price of an asset and the actual cash and other fixed assets belonging to the team.
In this case, Mr Ballmer can spread the goodwill over 15 years and reduce his tax liability on his other income by a certain amount for each of those years.
Using a conservative model that assumes Mr Ballmer could account for $1.5bn in goodwill and a re-investment rate of 7 per cent, the potential tax credits equate to about $1bn in current terms.
Because nobody deserves a tax break like billionaire owners of sports teams.
Two of the East’s top teams are about to get key stars back.
Milwaukee has been without Khris Middleton all season as he recovers from off-season wrist surgery. Philadelphia has been without James Harden for a dozen games with a right foot tendon sprain. Both are nearing a return, reports Shams Charania of The Athletic.
Milwaukee has a 14-5 record and sits as the two seed in the East, but they have done that on the back of the best defense in the league, led by Giannis Antetokounmpo and Brook Lopez. The Bucks’ offense is 18th in the league overall and bottom 10 in half-court possessions, an area Middleton should help shore up.
Philadelphia has gone 8-4 in the dozen games Harden has missed so far and has the best defense in the NBA over that stretch. The question becomes can the 76ers continue to defend like that when Harden (and, eventually, Tyrese Maxey) returns? Players such as B-Ball Paul Reed, Shake Milton and Tobias Harris have stepped up in recent games, can they continue that with shifting roles?
While there are questions, the Bucks and 76ers are about to get better, which should worry the rest of the league.
Myles Turner heard his name come up all summer in trade rumors, particularly to the Lakers in a massive Russell Westbrook swap. It never happened as the Lakers would not throw in two first-round picks to seal the deal. Since the season started, the trade rumors around Turner have not stopped, with the Clippers mentioned as having interest.
Turner is trying to ignore all of it.
That was especially difficult on a recent swing through Los Angeles, and Turner spoke to Law Murray from The Athletic about it.
“Nothing changes,” Turner told The Athletic.”Just go out there and focus on getting wins for this team. That’s just where my focus lies. You can’t pay attention to outside noise … doesn’t change anything, bro. All I can do is go out there and play my game.”
Every player says some version of that, but Turner has lived up to it. Able to play his natural spot at the five without Domantas Sabonis sharing the paint (Sabonis was sent to the Kings in a trade that brought back Tyrese Haliburton to Indiana), Turner is averaging a career-high 18 points and 8.5 rebounds a game, while shooting 39.7% from 3. Plus, Turner remains an elite rim-protector, averaging 2.6 blocks per game (second in the league).
Turner is playing the best basketball of his career, coincidentally as he heads into summer as a free agent.
Whatever team trades for him will have to pay him next summer impacts Turner’s trade market, as does the fact that the Pacers are a surprising 12-8 start — Indiana is reportedly not as eager to trade Turner. If a team wants to trade for him, they are going to have to overwhelm the Pacers.
Turner has hinted he likes the idea of a brighter spotlight than he has seen in recent years, but in the end money will talk. Turner has kept his head down and his play this season has earned him more of it.
How much the Portland Trail Blazers miss Damian Lillard was on clear display Tuesday night in maybe their ugliest loss of the season. The Trail Blazers led by 18 in the second half, Anfernee Simons was on his way to putting up 37, and they were facing a Clippers team without Kawhi Leonard or Paul George. Yet Portland came from ahead to lose. Their defense was bested by the unstoppable offensive weapon that is Nicholas Batum (32 points). Portland just let go of the rope in this one.
The Trail Blazers are now 1-4 with Lillard out with a strained calf (the second time this year). The good news for the Blazers is Lillard is targeting Sunday against the Pacers for a return, reports Chris Haynes of TNT.
Haynes is well connected with the Lillard camp, this is a report that can be trusted.
Portland is trying to keep its head above water and is now 11-10 on the season but has struggled this past week, with games at the Lakers and at the Jazz before Lillard’s targeted return.
Lillard is averaging 26.3 points and seven assists a game this season, showing the explosion we were used to seeing before he was slowed by an abdominal injury that required surgery.
Bulls’ fans are not thrilled with a 9-11 team sitting 11th in the East, outside the play-in.
Bulls’ management is not either, but they aren’t laying the blame at the feet of coach Billy Donovan — in fact, they extended him just before the season began, a story broken by Shams Charania of The Athletic and since confirmed by Bulls’ media relations staff to K.C. Johnson NBC Sports Chicago.
Why the extension? Because Donovan and head of basketball operations Artūras Karnišovas have a tight relationship, Johnson writes.
Karnišovas’ continued belief in Donovan centers on Donovan’s leadership and communication skills. The two men talk virtually daily and there’s never any misunderstanding in their shared, direct conversation — even when the subject matter becomes difficult.
And not everything has been or continues to be smooth sailing for the Bulls, who have played without Lonzo Ball since January and are off to a 9-11 start in a season with modest outside expectations.
No details about the length of the extension were made public.
This is a decision about stability. Donovan is a solid coach and the front office trusts him. That’s enough to get some extra years on your deal in Chicago.
The Bulls’ issues are not because of Donovan, it’s more a roster that has a “playoff team but not much more” ceiling — a ceiling that is lower this season due to injuries forcing constantly shifting rotations. The Bulls are especially hamstrung without the defense and transition play of Lonzo Ball (still out after another knee surgery). Chicago has defended well this season without Ball (10th in the league), but the offense is bottom 10 and misses the easy buckets Ball helps get with his passing and transition (plus he can knock down some 3s). Donovan has done a respectable job with the players he has.
That is good enough in Chicago to get a few more years.