Money.Sports.Personal Training.Politics.Shoes. & Tattoos.
24 YO
Former DE for Texas College
Working as a Strength And Conditioning Coach/ Personal Trainer
A young man...with an old soul.
Devout Music Head
Sports Fanatic
Anything (Chicago Bears, Chicago Bulls, Ndamukong Suh, LeBron James, Andre Corley, Cartavious Kincade, Karique Stephen, NY Yankees, and LA Dodgers...I'm ON IT)
Ask and you shall know.
Peace.
Catching Elephant is a theme by Andy Taylor
The REAL Air Jordan.
NBA Economics 101: Owners Aren’t Stupid And Capitalism Is Okay With Me.
There is this notion that NBA owners are some how stupid. They don’t understand finances, economics, or even simple math. They supposedly over paid for already over valued franchises and then proceeded to lose millions a year in both liquid cash and franchise worth due to contractual obligations.
This isn’t a smear campaign paid for by the NBPA. This notion is being championed by the NBA owners themselves. Disguising themselves as ignorant people who were somehow trapped into business dealings which left them in shambles. Let me get my point out right now: NBA OWNERS ARE NOT STUPID PEOPLE.
12 NBA owners are worth over a billion dollars, with the richest, Paul Allen, near $20 billion dollars. The “poorest” NBA owner is worth $80 million dollars, at least. We are talking about 30 of the most elite and successful businessmen and investment groups in the world. These 30 owners some how navigated the complex and treacherous world of international dealings, cut throat mergers and acquisitions and up and down stock markets and were some how able to come out of it with enough capital to purchase basketball franchises worth hundreds of millions of dollars and yet we are to believe that they suddenly lost the ability to operate these franchises? No. Let me once again restate my premise: NBA OWNERS ARE NOT STUPID PEOPLE. We are talking about the 30 smartest and richest people on the planet. People with more employees than most of us have dollars in our savings accounts. And we are to believe that after making millions and even billions of dollars going up against other brilliant businessmen that these same gentlemen can’t negotiate a profitable deal with a bunch of 20-something year-olds?
That’s not what this is. This lockout isn’t a correction of their own fallacies. This is a practice of the tools provided to them in a capitalist society. And there’s nothing wrong with that. But the owners can’t play the victim without implicating a perpetrator. They only have three choices:
1. Themselves - Never in a million years. These men have bigger egos than the superstars that they employee.
2. The Economy - This won’t work and I’ll explain why in a second.
3. The Players & The CBA - AHA! ”Let’s blame the greedy players!” The perfect crime.
Why can’t the owners blame the economy? We are in the midst of one of the worth recessions we’ve seen in over a century and the economic climate doesn’t seem to be improving. But the NBA and ownership can’t blame the economy for one reason: It would mean that the CBA is sound and that outside influences are the driving force behind lost profits. Therefore there would be no need to demand such brash negotiations to take place between the NBA and the NBPA. So you’ll never really hear the owners blame the possible collapse of our entire economic infrastructure on lost profits. It MUST be the CBA and the greedy players. Or at least that’s the notion that the owners want us, the fans and players, to buy into.
So here we are today blaming a system that worked for a decade and no one had any qualms about just 18 months ago. Not owners, not players, not fans and especially not David Stern’s personal bank account.
Speaking of Daivd Stern, he still has a job. That fact alone should be proof that the NBA owners are happy with the direction of the NBA. After all, Stern is an employee of the owners. The same owners that fire GM’s and coaches on a yearly basis as if it were a sport itself, yet David Stern has been able to keep his job for over two decades. The owners are even entrusting him to lead the negotiations during this lockout despite the fact that he supposedly messed up the last time around. Are we to believe that NBA owners are so stupid that not only would they would keep employing such a person for 20+ years, but they would pay him millions and leave him in charge of negotiating their business’s economic future? No. Again, NBA OWNERS ARE NOT STUPID PEOPLE.
Do you know what changed in the last 18 months to spark up such turmoil in the NBA?
Not the revenues. In fact, the NBA saw an increase in revenues this year. and since the revenue split is always static at 57/43, they should have budgeted for a lower cost of operations than the monies they actually received.
What does this mean? Let’s assume the owners thought that revenues wouldn’t increase, but stay the same. Let’s also assume they thought total NBA revenues would be $100 million dollars per team, I use that number for simplicity. That means that they would know that they can keep $43 million and are obligated by the CBA to spend $57 million on players’ salaries. So they would budget their coaching, medical and front office needs based on the $43 million in revenue that they assume is coming their way. But what they actually received in terms of revenue was greater than the previous year. Unless owners were stupid and expected greater returns in a downed economy, they probably took in more money than they had budgeted to spend.
What did change is the economy which in turn changed the mindset of the average consumer. The fears brought on by the economy — bankruptcy, debt, unemployment — served as the perfect smoke screen for owners. The people might actually believe their cries if the people believed that things were just as bad for the rich as they were for the poor and middle class. As we’ve heard before, this CBA negotiation is all a PR war.
But I have no problem with what the owners are doing. These are simple negotiation tactics and last I checked we still lived in a capitalistic society. If you owned a business and you could convince your employees to take less money because the way you arbitrarily calculate income shows that you lost money, why not go for it? One of the issues for the players is how BRI (Basketball Related Income) is calculated. It allows for owners to leave of certain arena profits and other sources of income created solely through NBA ownership and include other accounting factors, such as contract depreciation and purchase price & interest into losses. Is this fair? In business anything you can get the other side to agree on is fair and the players agreed on this system. The flip side of it is that owners don’t get any of the endorsement money that players collect and they don’t even ask for it. But BRI aside, I think what the owners are doing is the not only the smart thing, it’s the right thing.
I can’t think of any non-charitable business that wouldn’t jump at this opportunity so I can’t blame the owners for doing so. What business wouldn’t try to increase profits by cutting costs so long as they don’t lose productivity?
And in the NBA, productivity is games, and that brings me to my most important point: We haven’t missed out on any regular season games yet.
So don’t panic, not until October 31st, at least. Let the businessmen do what businessmen do. Just because this is basketball doesn’t mean it’s immune to the ideals of capitalism. If NBA owners didn’t explore these channels to line their already wealthy pockets with more profits, I’d consider them stupid people.
But we all already know NBA OWNERS ARE NOT STUPID PEOPLE.
Photo via
NBA Ownership, hidden revenues and the plight of fans
The New Jersey Nets were officially introduced to Brooklyn today by none other than BK’s Marcy Project survivor, Jay-Z. After a year of searching for a name and an angle to re-brand the struggling franchise with, it looks like the team will stick with their original name; the Brooklyn Nets.
But that’s not what we’re here to talk about. The Nets did make a big splash today in the blogosphere and twitter but not because of their more than obvious name announcement. They made headlines due to the fact that a well know and respected writer finally stepped up to dismiss the myth of NBA teams losing serious amounts of money.
Malcolm Gladwell dropped a must-read post on Grantland today titled ‘The Nets and NBA Economics’, essentially touching on same points that fellow bloggers like @JonesOnTheNBA, @HPBasketball, @KBergCBS and myself have been championing for months.
Read Gladwell’s piece. Read all of it and understand it. It’s got numbers in there that will make turn your insides and set fire to your heart. Perhaps it will burn off the wool that’s been pulled over the eye’s of the majority and it will be loud and clear; NBA OWNERSHIP IS A PROFITABLE BUSINESS. I can not express this enough.
NBA teams make a ton of revenue that doesn’t fall into the typical BRI (Basketball Related Income). Sure, NBA owners are mostly all billionaires and have various businesses and streams of income, but that’s not what we’re talking about here. We’re talking about business opportunities that only present themselves to the very select few that own a basketball team.
Whether it’s Jerry Buss teaming up with AEG to build LA Live, Dan Gilbert leveraging his Cavaliers’ ownership to open Casinos in Ohio, Mark Cuban’s HDNet television networks and many, many more including the Nets moving to Brooklyn and helping fund the Atlantic Yards project, which will make millions for not only their current owner, Prokhorov, but also for the Nets’ previous ownership group.
I could go on for days on the various ‘side projects’ that were given birth by NBA ownership yet not a single dime has come to the players via their BRI Revenue Sharing model in the CBA. Not one dime. It’s not “basketball related” owners will argue. Those concerts that sell out and bring in revenue for the 200+ days that the NBA doesn’t have games, the off-season events that take place in your favorite team’s arena, all of the television stations launched around your home town teams, all of that revenue, not a single dime goes to the players yet not a single dollar would have been realized if it weren’t for the NBA and those same players.
What city would approve hundreds of millions in funding for an arena if it were to only host concerts? What taxpayer would willingly pay more for beer if they weren’t able to have a home town team to cheer for? We, the people, the fans, give millions to billionaires for the promise of a team to cheer for, to die with and to celebrate with and in return we give them millions in unaccounted revenues.
I am a believer in capitalism and I see no harm in making a profit, even if that profit is extravagant, and that profitability would be perfectly fine with me and millions of other sports fans if the owners weren’t lying to us. Telling us that their businesses are crumbling and that the fan can no longer get their daily fix of the NBA until the players give them something back. But haven’t we given them enough? They’ve leveraged our abiding loyalty to our teams and cashed those chips in for billion dollar stadiums and matching net worth’s. Imagine a homeless man begging for quarters on the street corner, most of us would have no issues with handing that man a quarter. Now imagine after giving him that quarter, the man steps into his Ferrari and drives off to his mansion in Beverly Hills. That’s the what the owners are doing yet until today, most weren’t hadn’t seen the car or the house. For this, I applaud Gladwell, Grantland and ESPN, for finally shinning light on the grim, dark secrets of NBA ownership.
The sad thing is that we will happily continue the financing their empires so long as they give us our sports. Entertainment for equity; that’s the ultimate price you pay as a sports fan.
“He was at every practice. He was one of those guys that you never could come into practice and say ‘M I’m a little tired today man. Take it easy on me.’ That would be like throwing blood in the water to him. He just wanted to kill you then.”
~Scottie Pippen during “Legends of the 90s” on NBA TV
Yao in Hall of Fame…NO…But Will Happen
Yao Ming will never be HOF caliber but will make it in the HOF.
Let’s make sense of this and keep the Hall sacred.
If we are basing this simply off the numbers and what he produced on the court. He was a solid but never dominant Center….and should never be considered for the Hall Of Fame.
Looking at the dynamics of Yao’s stature, 7’6” 310 and some what agile for his frame. Nice hands and touch on his shot. His statistics are solid averaging around 20 points per game, 15 rebounds, and 2 blocks for his career. His playoff statistics far as 2 less rebounds and 5 more points. All quite solid for any player.
But for someone 7’6”, “solid” is not good enough. He should’ve been GREAT. ESPECIALLY in a League at this time with NO dominant inside, “ole school” Center type players.
Yao, came into the NBA, in 2002. First Round, First Pick, by the Rockets. At this point, in the NBA, the only head over hills dominant centers were Shaq and Mutumbo. Alonzo Morning was on his down side of his career and was a floater Center at this point.
Now don’t get me wrong Mourning ,is and was a HELLUVA player at that point. But he was no longer “Zo” at that point of his career. But with that said, Yao, didn’t have to go up against those great Centers.
Yao, missed the likes of Hakeem Olajuwon in his prime at this point. He missed Ewing, Robinson, Mutumbo in his prime. He missed even the “scrapper” non-centers that would bang down there with him. He missed the Barkleys, the Charles Oakleys, Anthony Masons, Rodmans, Horace Grants. The players that would’ve given him trouble down in the blocks without proper technique and footwork.
At the point of his inception into the league, all he had was Tim Duncan, who really is a Power Forward, Mutumbo, and Shaq. Of these three players, two he would see his conference. Then some years later Mutumbo would team with him, to mentor him.
Now, once again let’s examine the facts. Shaq was at the pinnacle of his career at this point. So NO ONE could stop “Diesel” but “Diesel”. Tim Duncan had a hellacious team around him to complement his skill set. After that who is there for him to have been challenged by at 7’6” 310?
If you look at the logistics of this argument, at worst case you should be 3rd in the Western Conference.Behind Los Angeles, which has Shaq, and San Antonio, with Duncan. Which gives you the position to not play either in the opening round. Which makes you be a “shoe in” to get to at least the Second Round just off statistics, potential, and fortune.
But Yao, did this only once.
And in the last year of him being of service…with a bad foot.
Let’s look at the teams he played on and his teammates. The Rockets have not been a “powerhouse/dominant” team since after their 95 Championship. Which ironically correlates with the fact they changed stadiums and uniforms, but that’s a whole “‘nother” story.
Anyway
Yao played with the likes of Steve Francis and Cuttino Mobley during his incarnation into the league. Now, neither are “SuperStar” caliber (Francis is up for debate) but collectively are a nice cohesive unit. Together, Francis and Mobley were averaging 38.5 points per game with 9 assist. Strong numbers.
Yet only made it to the playoffs to get bounced in the First Round.
Francis and Mobley, get traded to Orlando, for the Scoring Champ Tracy McGrady and a few other players. At this point in McGrady’s career, he was consider to be the premiere player in the league. Second only to Kobe/Iverson.
McGrady would average in his prime with the Rockets 25.7 points and 5.7 assist.
Yet the only time the Rockets made it to the 2nd Round was when they acquired Ron Artest. McGrady and Yao would be hobbled and play limited if any minutes to attribute to the accomplishment.
*Blankstare*
This Hall Of Fame play? A strong cohesive unit, or the scoring champ, yet you being the dominant specimen that you are can only “make it” to the Second Round to watch? Then you look at the landscape of “Centers” and all you have is Dwight Howard, which is a Power Forward, and Andrew Bynum? Where was this “break from the pack…show my defiance and dominance” Yao.
*Blankstare*
Now, the case is closed on his contributions ON the court.
OFF THE COURT……
He will be made a Hall Of Famer based strictly off this. Nobody since Michael Jordan, globalized and bridged cultures the way that Yao has in sports, let alone the NBA. (Beckham is HIGHLY debatable here)
PERIOD.
He is the ambassador of the globalization of the NBA. Now, don’t get me wrong his scenery had just a major part of his success as it does anything else. Houston, has a very deep, and diverse Asian culture. Just like many other major market cities, Houston, has a “Chinatown” that is quite complex. From our NASA Space Program, to one of our major suburbs of Houston, Clear Lake has a very prominent, Asian impacted effect. And as you would see at ALL Rocket games, at the Toyota Center, Asians SUPPORT their own. Yao, is no exception.
The Rockets, have been HORRIBLE, as of late. Especially, since Ron Artest signed with the Lakers and won an NBA championship. But, no matter the record, Asian culture comes out to support Yao. When his name is said, picture is show on the TitanTron, wither he is playing or not, he gets a ROWDY response.
But look at the dynamics, strong Asian culture, in a major market city. The parallels just came together right.
And the Rockets CAPITALIZED off it.
From the obvious, Toyota Center. If you are from Houston, let alone Texas, you know “FORD is the best in Texas.” Yet, after the Summit, faltered, and Compaq Center was bought out by Lakewood Church. Toyota helped sponsor the “House Yao Built”. As well as, with the demographics that are, Yao having a strong Asian base propelled the ship. Yao, has been in the top 5 of jersey sells every year since his rookie season. As well as being a top All-Star Ballot receiver, wither healthy or not, in every All-Star Game he has been eligible for. So when you look at Yao, helped float a floundering team and economy by being just APART of the Rockets.
Houston WON.
So when you look at the landscape at hand you realize the obvious. Politics are just as much a part of sports, as they are government, as they are everyday life. Will he actually make it to the Hall instead being a “Helper” we shall see soon.
Open Ya Eyes,
@HiDefHerm
Personal Trainer Joseph Herman, II is an independent trainer working out of the Greater Houston Area. He specializes in athletic performance, youth athletics, and personal training for all backgrounds.In addition to training, Joseph currently writes on this blog, is working to build a full fledged website, and start a personal training and athletic complex to display his talents. Joseph can be reached at JLHermanII@gmail.com.
WANT TO USE THIS ARTICLE WITH YOUR STAFF, PLAYERS, BUSINESS,EZINE OR WEBSITE? You can, as long as you include this complete blurb above with it.
