"Assets"
by Mplax on Mar 15, 2010 9:29 PM CDT
84 comments
So I figured I would try to give us something (besides the lottery) to be happy about in our current situation. We've lost March so far and that doesn't look to change with our next few opponents (crazier stuff has happened). So basically this season is gone. Development wasn't seen nearly to the extent you would hope in a season like this. Wins were few and far between (Except for that February streak). Lineups were crap. So much to complain about. So let's talk about assets.
Well assets don't really do much good when you don't know how to use them. And it seems more and more each day that we don't know how to use them. Like, we have absolutely no idea what to do. If this was a business, we would be walking back into a bank with our heads down, not looking the loan approval officer in the eye, and asking for our 8th loan (is that too generous?). "But Mr. Loan Officer Sir, we have the assets to back the loans!"
And we do. We have the assets to, in our case, give us hope and a reason to keep cheering. To offer our team another chance. Because maybe, just maybe, this is the time that we don't need another loan.
On to my point, Boston. Let's take a look at where they were and, well, we can probably skip where they got to and where they are. Before the Summer of Garnett/Allen, this is what Boston's assets looked like:
BOSTON:
Expiring contracts
Draft picks: From us and their own... possibly some others coming as well, not too important here though
Young players:
- Big Al, Gerald Green, Bassy, Gomes
- Rajon Rondo
- Kendrick Perkins
- Tony Allen and Leon Powe
- Delonte West (I'll include Wally here as he is relevant for the Ray Allen trade)
Allstar: Paul Pierce
Not too bad, right? They only won 24 games that year... Without Pierce for a decent amount though. Well, now let's take a look at where we are, keeping in mind that we were without Love for a good amount of time and Brewer and Jefferson were coming off significant injuries.
MINNESOTA:
Expiring contracts: For sure
Draft picks: 3 in the first round and 1 at the start of the second, which are all going to have some decent talent available... Probably more than when Boston was trading (I think the 5th pick this year will be a better prospect than Jeff Green)
Young Players:
- Jonny Flynn, Ramon Sessions
- Corey Brewer, Wayne Ellington
- Kevin Love
- Al Jefferson (And I'll give a somewhat similar shout out to Gomes as he is about equally as productive as Wally, if not better because of his contract... and performance... and locker roomness)
Euros:
- Rubio
- Pekovic
- And don't discount our rights to Norel and Alphabet (one-sided trades for ghost contracts)
Allstar: Umm, well... Let's imagine for a second that Turner turns out to be on a level similar to Paul Pierce. Then we move our draft picks down to 2 first rounders.
Conclusion:
Assuming Turner can be a player like Pierce (should immediately be a better defender and rebounder, but worse shooter and worse at getting to the line - at least right away. Passing and TOs should be pretty close), I'd say we have more [perceived] assets than Boston did at that time. We don't have an extra 5th pick in the draft, but I'd say Rubio has more hype than Jeff Green could even have come close to. I don't think anyone expected much from Telfair or Gerald Green at that point. I don't think people expected Gomes to be too much more than an elite-bench player (or average starter) at best. Tony Allen, Delonte West, and Leon Powe were what they were at that point. Direct comparisons though:
- Rubio >= 5th pick
- Our other picks > Their other picks
- Evan Turner <= Paul Pierce
- Kevin Love > Kendrick Perkins (by quite a bit at the time and still, in terms of trade value at least)
- Gomes = Gomes
- Big Al = Big Al (not much upside, but he has proven a LOT more)
- Sessions > Wally (cheaper, upside, past production on a better team)
- Rondo Allen Powe West = Flynn Brewer Ellington Pekovic? Tough to guage because Rondo's trade value wasn't great at the time, but he turned out to be an allstar. The other three are relative nonfactors. So our four probably has a ton more trade value than theirs had, but possibly less output than Rondo is having (possibly more... who knows how these four will turn out some day).
Soooo.... I'd say we have more trade value on our team than they did. As far as our future v their current output... well I think that really depends. Rondo and Perkins provide a lot and Pierce had a resurgence after his injury year. Plus, their guys might not have developed close to what they are now if not for the trades that took place. Kevin Love's continued development will shape this the most, as well as guys like Brewer, Flynn, Ellington, and our draft picks this year. And Jefferson getting healthy (is that just an excuse now or is this still legit? You decide). I'd say it's certainly a toss up, but I think it's pretty even if not a slight advantage to us (Paul Pierce is tough to replicate though). I'm not saying we will see a turnaround like they did (and even if we did, I don't think we would get the FAs signing with us like they did), I just wanted to point out that we aren't that far off of where they were a few short years ago. I'd invite any disagreement to any of my points as I'm making complete guesses and would love to hear what others think.
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I'd agree
but how would you rate their talent AND upside now compared to both of those before? Obviously before they both had a higher perceived upside. I didn’t know how to factor this into trade value. I guess it depends on the team we would be trading with?
Better, yes. But the upside is gone now. There’s little promise that Al is going to be a franchise player at this point. At the time of the KG deal, that thought was still there. Part of Al’s value when traded was that he could replace KG as our franchise guy. I’d probably argue that Al’s trade value was higher then because of that.
Include Al's contract
Al was more valuable at the time the Wolves traded for him. As mentioned he had a lot of upside plus he was still on his rookie contract. I think Al now has less value after coming off a torn ACL than he did then.
You forget possibly the most important asset Boston had at the time
A buddy of Danny Ainge by the name of Kevin McHale.
If the Wolves can trade Big AL, Gomes, Sessions (instead of Telfair), Ellington (instead of Green), the Charlotte and Utah picks to get a sure thing, great all around Hall of Famer with tread left on the tires, they are on the verge of greatness.
Problem is, I don’t see Orlando taking this offer for Dwight Howard.
I get where you’re coming from, just wonder how they turn some of those assets into a 38 MPG All Star who cares immensely about winning a title.
Haha very true
And I’m not saying that’ll happen or anything to this extent. I just wanted to point out how quickly things can turn around when we have the assets we do. Now it really is up to Kahn to sell those assets for more than fair market value.
And I don’t expect Dwight Howard to come to us any time soon. But I wouldn’t be surprised if we could pick up any number of aging allstars towards the end of their prime with a package like that. Just have to find the team that is starting to rebuild and pick apart their best pieces by selling them nothing but hope. Plus, we will have more cap space than Boston could have dreamed of sniffing. Garnett ruined any chance they had of adding a big name FA. By including Al in any trade, we would be effectively maintaining our cap space… especially if Gomes/Sessions was included. I’d think most teams entering rebuilding wouldn’t want those two… and I’d also think we would if this was indeed our plan, but that’s beside the point as neither of us think this will happen :) Anywho, I got a good chuckle out of your first comment. But I think we have the assets to put a good package together if the opportunity did present itself. And in smaller doses, I do think this is the path we will have to take in the near future. Not a future hall of famer, but maybe a current verge allstar or two on top of hopefully a future HOFer in Turner (fingers crossed!).
Interesting take
But I’m not sure the best way to build toward a championship is to go after aging all-stars like Boston did. I can’t really think of another recent NBA team that won that way. If we’re going to trade Big Al (and I’ve reluctantly come to believe we probably should), I’d rather get a good wing player in the early part of his prime. That way we can start winning some games and see how far away from contention we are before going after a veteran as a final piece. However, if for some reason we were able to pull off trades similar to Boston getting Allen and KG, I’d be all for it. I just don’t see it happening. And like you said, we don’t have a Paul Pierce on this team right now either, which would probably still leave us short of legitimate contention.
Good writing, and I agree with everything you say
You’re correct — if we wanted to, we could be in as good as or a better position than Boston was when they took KG and Allen — able to trade for a couple of very high-quality, though aging, vets. Assuming, of course, that the requisite selling teams could be identified, as they were in that year. If we could pull it off, we, like Boston, could go far for a couple of years. Maybe to the top… stranger things have happened.
The question then follows: Would it be worth it? Sometime in the next 2-3 years, Boston’s situation will be bleak. They accepted that when they made those deals. You win big now, even a championship or (maybe?) two. In exchange, you agree to have a couple of rough years when those stars you picked up retire. Then you have to rebuild and pick up assets.
Would you take that destiny? Of couse, the answer must be hell yes. Imagine a contending season or two. In a year or two the Celtics will start to really hurt, and they will hurt for a while. But how is that different from the Wolves situation for about 6 years now?
I of course would cry inside if we gave up Rubio’s rights. He’ll be great someday, and I"d love for that to happen with the Wolves. But if we could pull off a scenario where we acquire a couple of hall-of-fame level players, each of whom has a couple of great years left, and then keep Evan Turner at the same time, and expose him to a winning environment? How can you say no?
Cody and Dumbhead-
There is very little chance that we could ever get so lucky, but yes, if the teams with the correct type of players decided to start over, we are in a terrific position (perhaps one of the top teams in the league in this position) to acquire the players they are finally casting off. Of course even then this almost has to happen with 2 teams at the same time. Unfortunately, this doesn’t seem likely. Which brings me to my main point of this, not that I think we are going to make a couple huge moves that vault us into contention over night. Rather we are primed to make a few smaller moves on top of our usual drafting and FA signings (hopefully!) that could put us towards the bottom to middle of the western playoff race in a year or two.
What Boston did certainly was unique, but having the ability to do it goes a long way in this league. Being ready to jump on the deals that present themselves. I’d say one of these types of deals comes along at least once out of every three years if not more. Shaq, KG, Gasol, and Billups jump immediately to mind. I’m sure I’m forgetting a few in the last few years even. Again though, on a smaller scale these deals present themselves multiple times per year. We just have to be ready by the phones calling up the teams that are looking to deal. And I think Kahn is a great man to be doing this. Not because I think he is the savior here, but because he has proven to be active in this regard. I’m still extremely happy with the Sessions signing and I think that will start to show just how helpful it was in the next year or two (either by trade or by playing).
And yes, creating a dynasty (a la San Antonio & LA) is the preferable option, but who around here is going to throw a fit if the Timberwolves can steal a couple years as one of the top contenders? Even with the consequent fallout that will happen once the team gets old (which is now happening with SA even).
I think that is the one other 'asset' that needs to be included on the list
Boston had two trading partners ready, willing, and able to start over and looking to deal. It’s kind of funny – in hindsight the number one advantage OKC/Zombie Sonics had over us at the time was Durant (aka a future star on the roster + a high draft pick they could trade for, versus us having nobody and trading and for a future star in Al).
Growing my own "Darko-stache" since last Monday.
I really doubt...
That a team looking to rebuild, sold on hope as you say, would choose to do that by taking Big Al and his contract. The closest equivalent on the Wolves is Love, and he does not have the perceived upside that Al had when we traded for him.
Teams interested in Al will be ones looking to push to the next level, either having a young core in place like Memphis adding Zach this year, or a team looking to add a low post offensive presence. At this point in his career, I don’t think anyone would choose to rebuild around Al.
by Krotz the Wall on Mar 16, 2010 10:07 AM CDT up reply actions
There is ONE Team that Could Complete this Equation
So who plays McHale’s Wolves to Boston’s turn around? Who is the team now that is dominated by a frustrated Super-star who has a front office that can’t or won’t surround him with the talent he needs to compete? Which team is living off the steam of a recent deep playoff run but is now little more than a high lottery pick team (because the Superstar is too good to let them fall further)?
Ladies and Gentlemen – I give you Chris Paul and the New Orleans Hornets.
This puts the Wolves in a bit of a bind. They are in a good position to offer productive and attractive assets, and take back over priced ones (I’m looking at you Peja) – but adding Paul handcuffs the Wolves to Evan Turner with their pick (ok, that’s not such a bad thing – but if they get #1 they can’t play cute as though they’d take him to bilk the #2 team for Turner and something else), forces the Wolves to deal Rubio and Flynn-or-Session (I’m guessing Rubio has to go to NO in this deal), and our best asset to offer (AlJeff) is fairly redundant wiht Okafor and West – which means somehow adding a third team or giving up our high pick this year (ouch).
Another possible team is Phoenix and Steve Nash, but the price is much lower. They might do that for Rubio, Sessions and cap space.
Steve Nash?
The one born in 1974?
"It's tough to make predictions, especially about the future." -- Yogi Berra
by Wile E Coyote on Mar 16, 2010 1:01 PM CDT up reply actions
I'm more interested
in the rights to Steve Nash’s son (“Little Stevie”) than I am in the guy who is 17 years older than Ricky Rubio.
I like the Chris Paul idea
It has been tossed around here by myself and others, however, I am now going to rain on the idea. If NO was going to move CP3 to save money, it would have been earlier this season. They got themselves under the luxury tax just before the deadline. Also, if they were willing to pay Peja this season, why trade Paul to dump Peja this summer to save money when Peja’s deal is down to one season. Basically, NO will suck it up financially one more season, add a lottery pick this summer, and in another year actually be in pretty good financial shape. With all the cap space out there this summer, NO may even be able to trade Peja (perhaps for next summer’s Mark Blount).
I was big on CP3...
but not any more. I think Rubio will be an excellent PG for us so no need to trade for one who costs a ton. Also, I don’t like his recent knee injury. I think it will shorten his career and take away some of his ability. I no longer want anything to do with CP3.
I love this post. You make very good points and it does make me optimistic.
However, it is assuming a lot the we get Turner. That means we gotta get a top 2 (maybe even the 1st overall) to secure him. Though I agree he could be better than Pierce in a few years. Also, Rondo is an incredible talent. Flynn is nowhere near him in any way, shape, or form. Also, Jeff Green is a pretty good player. I know everybody wants a superstar with the 5th pick, but players like Jeff Green (good defense, attitude, athleticism) win championships.
Wierd to think Celtics dropping in the draft made this happen.
If they had gotten the 2nd pick they would have had Durant. Which at the time they would have loved, but they would have (probably) not won a championship. Wierd how things work out.
+1
A tweener (SF/PF) who does not rebound well. Advanced stats do not indicate he is a big help either.
"It's tough to make predictions, especially about the future." -- Yogi Berra
by Wile E Coyote on Mar 16, 2010 1:02 PM CDT up reply actions
This is optimistic in the extreme
The truth is this: the Wolves have nobody close to the level of Paul Pierce, and while we hope for Turner, we don’t have him yet, and there’s no way to assume he’ll be that level player.
Rondo is way better than any of Flynn/Brewer et. al. The chances of any of those guys emerging as being as good as Rondo is minimal, mostly because he’s one of the best point guards in the league.
However, there are some assets here (though I think we overstate the value of the draft picks and the amount of cap space they have), and as you say—it’s all on Kahn now. He has to have a successful off-season; he set the timeline and the goals, and now he has to deliver.
by Eric in Madison on Mar 16, 2010 7:20 AM CDT reply actions
Agreed
Turner could be as good as Pierce, but that’s an assumption.
Rondo and Flynn actually compare offensively as rookies. Defensively is another story. That said, you can’t extrapolate that Flynn will become the all-star that Rondo is. Then again, that’s not the point of this thread. Flynn’s trade value could be close to what Rondo’s was after his rookie year.
Al Jefferson’s trade value is less right now than when we got him. Much less IMO. The potential of a franchise big is gone.
Rubio is significant though. #5/Jeff Green was valuable, but the #5 in this draft is looking better as this is a deeper draft…and I wouldn’t trade Rubio for the #5 this year. Rubio should/would net a better talent than a 30 yo Ray Allen.
Rondo's trade value
This is an interesting question. Trade value is a vague concept; on the one hand, it’s a consensus issue, on the other hand, it’s what will one team give (or what will we take)? The Celtics thought highly enough of Rondo that they would not include him in the KG deal.
As for Rondo vs. Flynn in terms of trade value: maybe, but the circumstances are not in Flynn’s favor. There are so many young point guards in the league now that there just aren’t a lot of natural fits for him.
by Eric in Madison on Mar 16, 2010 9:25 AM CDT up reply actions
Optimistic in talent evaluation,
optimistic in trade value, or optimistic in the amount of luck we will get for Evan Turner? I’m assuming the last one for now.
Well obviously our chances are what they are for Turner (and I’m not too worried about us needing the #1 for him as I wouldn’t lose any sleep if we got John Wall at #2). We are the second worst team and history dictates that we will probably either get the first pick (since no one seems to want Wall) or the third or fourth (fifth is highly unlikely, though still possible of course). Ideally we get first and NJ gets second and we swap 1 and 2 and the Utah pick with their lower 20s pick (seems like the absolute least we could get out of the first pick).
And I hesitate to say this because I know everyone will think I am crazy(ier) and immediately want to let me know how wrong I am, but a small part of me wants us to get Cousins or Favors. A very small part. Just because I think Turner has a better chance to become an impact player in this league, but both of these guys have a better chance to become a superstar (albeit a very small chance – hence the small part of me that wants it to happen).
I don’t think you meant I was being optimistic about our guys turning out as good or better than Rondo (could be wrong?), because you just repeated almost exactly what I said in different words. I basically said our 4 has higher trade value than their 4 had but Rondo alone is and probably will be worth more than all four of our guys in the future.
You've got the right scenario in play with MN #1 and NJ #2
But I think then the best move would be for the Wolves to take Wall and trade Jefferson and some other assets (not Rubio, but perhaps Flynn and the Utah pick) for the #2. The Wolves walk away with Wall and Turner, with Rubio waiting in the wings. Think of that back court over the next decade, with Turner also playing at SF about 10 MPG!
NJ would do it to try a Boston 2007 redux. They would have Jefferson, Lopez, Harris, and then use their cap space to get the wing that would make them an immediately contender.
I like this thought
As if you take Wall, getting rid of Flynn is a must, but if you get rid of Jefferson I think you have to go with Favors or Cousins.
I would think a core of
Wall/Rubio/Love/(Favors or Cousins)
is much more balanced than your proposed alternative of:
Wall/Turner/Rubio/Love
I don’t think you can count on getting a big back for a small in trade for someone like Rubio who would become the odd man out in your proposed core.
I'm sticking with Turner
partly because I want to see what Love would do playing full time in this scenario. I also think they would keep Pekovic in this scenario, who would fill part of the Jefferson role.
Forgot about Pekovic
And that is a solid point. Pekovic would be ready to come in and contribute 20-30 minutes and we’d still have the Charlotte pick to draft big man depth.
As Favors continues to get better and starts to dominate along with Cousins physical dominance and corresponding statistical excellence, the order of how the Top 4 picks play out gets muddier by the day. I don’t think you could go wrong snagging 2 of any of the top 4 so long as it’s not Cousins\Favors for the Wolves.
I don't think we get the #2 from NJ without including Rubio
But maybe we could get the #4 or something, and get Favors…
"Pinch-bunters don't have a ton of value, even with the Twins"
by Steven Ellingson on Mar 16, 2010 5:20 PM CDT up reply actions
Nice work,
but you’re omitting an extremely important “asset” possessed by Boston at the time that I don’t believe the Wolves currently have in any way, shape, or form:
The willingness and wherewithal to offer a player like Kevin Garnett $20 million per year in a contract extension.
This factor is mentioned much less frequently in discussions of the KG trade—the Wolves were going to lose him anyway, and wanted to get something before that happened. If you’re saying now that the shoe is on the other foot, well, I need some proof that Glen Taylor is willing to invest that kind of money in that kind of player before I’ll see some semblance of similarity.
I have to imagine...
that the earnings potential of a good Celtics team far outstrip that of an equally good Wolves team. More bang for the buck, as it were.
by Krotz the Wall on Mar 16, 2010 10:09 AM CDT up reply actions
While I can't guarantee that he will
I can only offer these 3 bits of evidence:
a) He has certainly shown the willingness in the past to field a competitive team
b) He has invested a crap load of money into a franchise like the Wolves… I can only assume he would be willing to spend a small percentage of that amount on a superstar nearing the end of their prime.
c) He still owns this team.
On a side note, he is one of the wealthiest owners in the league. So while he is obviously still suffering and losing possibly (probably) millions per year, as a % of his total wealth, he is not being hurt as much as most are and on that same note, spending will not hurt him as much as it will hurt most.
All true
but this is a different economy, and if I had to guess, I think his sentiments about adding overpriced veterans to get a short-term sugar high were soured by his experiences with Sprewell and Cassell. Plus, he has spent that money before experiencing a period of ultra-low attendance and revenue—if it were me, I’d feel more like I was throwing good money after bad, rather than giving the roster a quick talent infusion.
I’m not sure where it’s noted that he is one of the wealthiest owners in the league, although I wouldn’t doubt it if he were. That said, net worth and cash flow are two different things—he needs the latter to subsidize the 20-40 million the Wolves are probably losing each year. Even if he has it, I see no evidence that he wishes to spend it on the Wolves.
Very interesting to glance through this actually
http://hoopshype.com/owners.htm
Paul Allen is worth almost 4 times more than his next closest owner (unless I missed someone). Another thing of note, we are close to the bottom in terms of team value (not surprising).
Back to your post though, good point about the free cash flows being more important than net worth. Though I would imagine Glen Taylor, after so many years as the owner, has a pretty good idea of how to allocate enough cash to cover expected losses. And I’d also guess a lot of that comes from loans (short-term loans most likely, probably paid back as soon as he generates the necessary cash flow… it’s not like he should have any trouble getting a decent sized loan, even now). As to your 20-40M guess(?), I looked and couldn’t find anything too set in stone, so if you know of any links it would be much appreciated. But so far I found forbes saying that 12/30 teams posted operating losses last season. http://www.forbes.com/2009/12/09/nba-basketball-valuations-business-sports-basketball-values-09-intro.html
So I’d wager that none of those 12 teams even came close to losing 40M. And of those 12 I’d also guess that very few, if any, even came close to 20M. And even then, operating losses provide nice tax breaks (I think… guess I’m not positive how that works, I hate my tax classes) so the actual loss should be decreased by a nice 25%+ once those losses are weighed against whatever the carryback and carryforward is for them (assuming we haven’t just lost money for the last 5ish years and the next however many until it takes Glen to sell).
Sorry if this didn’t make much sense. Hopefully it’s at least clear enough to get the main ideas out of it. To summarize, everything is a complete guess, but I don’t think his losses are quite to the extreme that many think they are (But we are most definitely one of those 12 teams). Plus, Kahn has cut costs this year for him and has talked about adding a FA like JJ or Gay (or alluded to it… as has Glen Taylor, don’t remember where that came from but he said to someone that he really liked Gay) and that would almost certainly require a max or close to a max contract to get them to come to MN.
A follow up to your thoughtful follow up
a. Forbes says that the Bobcats may have been sold for a little over half of what the HoopsHype valuation was.
b. Losses happen in real time with real money, and are only valuable if an owner has realized profits to offset with those losses. Many/most businesses are not nearly as profitable as they might have been 2-3 years ago.
c. Talking about signing free agents is just talk. Quite frankly, I’ll be even more disappointed with this team if their one “big” move is to overpay JJ or Gay.
d. Glen Taylor just called, and asked if you would please stop quoting him as saying that he “really liked Gay.” (Not that there’s anything WRONG with a young swingman).
I have no idea whether they will spend
but Kahn has not been shy about talking about their cap space, which indicates to me at least that they will spend it.
One of the questions I hope the Hoopus night attendees ask is whether Kahn intends to have a payroll equal to the salary cap next season.
by Eric in Madison on Mar 16, 2010 3:47 PM CDT up reply actions
More links!
http://www.nba.com/2010/news/03/12/bobcats.jordan.soon.ap/index.html?rss=true
a) 275M is a little more than a little over half of what HoopsHype was valuing them at (284M). Thanks very much Mr. Ozanian!
b) This isn’t necessarily true. Losses happen before the season even starts (they are recognized during the season, but they are realized long before that). It’s the gains that happen in real time. I’d be willing to wager quite a bit of money that Glen Taylor knew what his expenses would be to quite an accurate number (trades or signings are going to affect this for sure. But I don’t know how involved Taylor is with what else goes on as far as marketing and stadium fees and whatnot). It’s the revenues that he doesn’t know about. Well that’s not true, he knew they were going to be low. So I’m assuming they have a best and worst case scenario of what will happen and then set aside enough money to cover the somewhere-in-between case scenario (if it gets worse, loans will be available for the difference). I’d also be surprised if the “worst case scenario” wasn’t quite a bit worse than the actual scenario considering what we have been going through in the economy and with the team. I don’t know, maybe I’m way off and they have a better (or worse? let’s hope not) way to run the business. But either way, I’m guessing they know how much their maximum losses could be.
c) Chances are we won’t spend on an FA this summer, but do you think they will just sit down and assume that or do you think they will go out and try to sign someone? I think I remember JustAFan saying something about how they were suprised that no FAs wanted to come here (I think he specifically mentioned JJ). So if this is true, they are already guaging interest and trying to figure out how to use the capspace.
d) touche
So, wait
David Stern is to be believed when he says what the sale of a team is, but not when he says that clubs are losing $400 million? That’s an interesting bit of selective cognizance.
Back at ya, even more so
Though I don’t believe I ever said that Stern was lieing about losing $400M. Selective cognizance at its finest!
Look at the wording on both of his statements.
“The NBA has signed off on Michael Jordan’s bid to buy the Charlotte Bobcats, and commissioner David Stern expects the league’s board of governors to approve the $275 million purchase by the end of next week. "
“NBA losses could reach $400 million”
The last one is a bearish projection. The first is a set number that has been put up for bid.
Your proof
that the sale price was $275 million is from an article written by the NBA, and says that part of the price includes the assumption of $150 million in debt. That makes the team “worth” $125 million, which seems to be a high price still for an outfit that (again, quoting from the article you cited) has annual losses of $30 million.
Paying $125M
and assuming a $150M debt
still makes the team worth $275M.
Would you trust an article written by an outside source more than NBA.com? the outside source got it’s info from someone in the NBA, after all.
Umm . . .
. . . where does it say they paid $125 million along with assuming the debt? If you follow the Forbes article down to the comments section, the writer follows up with an estimate that they put in $25 million of equity. Plus they have a ton of capital improvements (and losses) to assume in the coming years.
There’s no reason to believe the Forbes article, but it is certainly more reliable than something put out on the NBA website.
Purchase price of 275M
Assumption of debts (and those cash infusions that Ozanian doesn’t seem to be a fan of) totaling around 150M.
Where does the other 125M come from if not from extra assets (cash or not)?
Which source to believe is all opinion though, so I’ll drop this from here on out just because I don’t think either of us is going to get far when we are using different sources with vastly different amounts.
On a side note, Jordan already owns part of the team (over 10% I believe). So he doesn’t exactly need to pay himself for the portion he already owns.
"Though I don’t believe I ever said that Stern was lieing about losing $400M"
I’m sorry, I’m mixing you up with the other Pollyanna commenters, whose sunny hopes and dreams for this team make me long for the cool-eyed rational opinions of KLJ.
Pollyanna?
Yikes, I’ve never been so insulted in all my life.
I dunno, I prefer to think of it like this: I’m not gullible enough to believe every word that comes out of David Stern’s mouth, especially when he’s gearing up for what is going to be a very public battle.
On a more serious note, I dunno. Even assuming significant losses for the Wolves…will they absolutely not spend to the cap? Kahn hasn’t once indicated that as a possibility. I’m by no means convinced that you’re wrong, but I refuse to by into your absolute certainty.
by Eric in Madison on Mar 16, 2010 4:53 PM CDT up reply actions
I'll see it when I believe it
or something like that. You’re a smart law guy—axe yourself this:
a. Is there recent proof that they’ll spend more money than the minimum amount necessary?
b. Assume they ARE trying to cut costs—would they say it publicly? Would you want them to admit that if you were the owner?
c. If they are indeed tightening the purse strings, can you blame them? I don’t mean as a fan—of course we want them wildly over the cap. I mean as a friend or business adviser—if they asked your opinion, would you really tell them to spend ten million or so more dollars, with no guarantee of wins, viewers, advertisers, and butts in the seats?
I’m sure you or somebody like you thinks I’m not much of a fan. I believe the opposite (but I could be wrong): holding these guys accountable instead of just opening up our hearts, minds, and pocketbooks is more likely to force them to take action to improve.
Taking your last paragraph first
Are you kidding? I absolutely agree that they should be held accountable; that’s my whole point. Elsewhere I pointed out that businesses are supposed to provide an appealing product before they get our money.
As for your a,b,and c:
Well, OK. There is some evidence—they signed Ramon Sessions and Ryan “no hands” Hollins when they didn’t have to. Still, you aren’t wrong. But it seems to me, even if they wouldn’t announce it publicly: “We are going cheap for the foreseeable future,” they also wouldn’t be making as big a deal about the cap space they have if they weren’t willing to spend it.
Obviously, we’ll see. I’ll believe it when I see it too, I’m just not certain that I won’t see it. I’m pretty damn certain I’m going to see another loss tonight, though.
by Eric in Madison on Mar 16, 2010 5:16 PM CDT up reply actions
Yeah--
Part of my disillusionmentationaryism is that I was really happy with the Sessions signing—I assumed he would be getting 30 mins at the point, and Flynn would get the remainder. And as much as I don’t like Hollins, I’d spend the time (and money) on that type of guy again, just to see if he sticks.
No, I count you as a proud member of the “Fool Me Twice, Shame on Texas” or whatever it was that Bush said. I’m sorry to be such a downer, but it’s cathartic to bitch about it.
As part of my penance, I’m putting together a Reasons for Optimism post in time for the Canis Hoopus night (and in part, to protect Kahn from being assaulted, verbally and otherwise).
Something to keep in mind
The salary cap is going down by several million next season. If the Wolves somehow are able to bring back Darko, they may get to the cap just by keeping Gomes and signing three 1st round picks (especially if they get #1 or #2). Doesn’t leave much for a sexy FA signing, although Darko and the #1 could be just as valuable.
The Wolves are losing 20-40 million? Really?
I’d have to see a lot of evidence about that.
by Eric in Madison on Mar 16, 2010 2:00 PM CDT up reply actions
This guy named David Stern
says that the NBA could lose $400 million this year. Now, he’s saying this in the pre-battle environment of a labor situation, but he also has to couch his phrasing so that he doesn’t scare away potential buyers.
So let’s assume (for a moment) that the figure is correct. Dividing it equally, it works out to $13.3 million per team. However, we know that several NBA teams are profitable, so if that’s the net figure, it means not only that the gross losses are larger, but that they’re spread out among a smaller number of teams.
So, yeah, I could see how the small-market, low-attendance, tiny media TWolves could lose $20 million in a year. Especially since last year at this time, the similarly-afflicted Pacers said they could lose $30 million for 2009.
I was just about to post the same
Glad I replied to a couple others above first, you saved me the time.
On your point about adding salary next season, I haven’t seen anyone else post this, but I think the new season ticket offer almost guarantees a lower payroll for next season…how low I don’t know, but I’d be surprised if it doesn’t drop by at least $10 million from this season. They just can’t generate enough money with a half price lower level, even if it is full every night.
One small thing
“Could” is a very long way from “is” in business speak. The truth is that nobody knows what the operating losses are, and with the CBA negotiations coming up it is to the owner’s advantage to make it sound as reasonably bad as possible. Start with at a place you know the players will never accept money wise (“because we’re going to lose $400 million!”) and compromise at higher figure (“Well, that was only the worst case scenario where China buys America. Our losses are actually only $200 million” or whatever). It is to the owner’s advantage to a) not let anyone know what the actual numbers are and for whom, and b) to generate as much sympathy/fear from the fanbase about this so as to have leverage over the players. In either case disinformation over actual operating costs and revenues is modus operandi until it becomes advantageous to be honest about it.
I think Taylor has shown that he’ll gladly pay a salary if he thinks it helps with winning. I also think that Wolves might go into next year with reduced salary as well, but not because of the reduced ticket prices. That’s a long term play at generating new full price season ticket holders. Rather I can see them reducing salary simply because they don’t want to pull a Detroit and spend just to spend. I think if there’s a guy they like they try and get him. If not, then they sit pat and explore other avenues. If Taylor was into the Wolves for the money he wouldn’t still own the team, nor would he still be supporting the Lynx. We all have to keep that slight mitigating factor in mind, although I don’t mean to imply that he’ll accept a $30 million loss.
Growing my own "Darko-stache" since last Monday.
Are we sure Taylor isn't in it for the money?
Let’s not forget a few things over the last fifteen years.
1. When Taylor first bought the team, his losses could be absorbed thru accounting benefits (team and player depreciation, etc).
2. Even when they were losing big money in the Middle KG Era, the value of the team was going up enough to offset most of the current losses. Team values haven’t gone up for years (see Charlotte).
3. Was Taylor willing to pay for good players to “win”, or was he trying to keep the stadium full. I don’t think it is a coincidence that KG was traded at the end of the first season that saw fans stay away.
As to losses, regardless of how much the Wolves have “lost”, nobody can dispute the revenue they have lost the last five seasons. Paid attendance is down at least 5,000 (based on empty seats, not team stats). That alone reduces revenue by about $4 mil per season (assuming a lower than actual average ticket price of $20). Now add on how much revenue is lost each season due to massive ticket discounts (got to be millions). Then factor in concessions, the fact that advertisers won’t pay as much to advertise in an empty stadium, and of course lost suite revenue. It doesn’t take a rocket scientist to conclude the revenue “lost” over the last five seasons has to be approaching seven figures, and half price tickets next season just adds to that total.
One other thing
If they planned to spend on a big free agent, why give the ticket deal. A good FA signing would sell season tix at full price.
I hope they are not expecting to sign a big FA
and I don’t think they are at this point. But you’re right, if anyone thought they were still looking at getting an FA from one of the top couple of tiers, this can pretty much put those thoughts to rest.
I still hope they spend it on guys like Childress or R.Brewer though (on top of draft picks who hopefully become those top tier FAs some day…. except that they don’t become FAs because they stay with us… yes all 3 of them… and our second rounders… it’s gonna be the best draft ever! Breathing exercises… breathe… ok I’m good again).
I just started asking myself earlier today
Do I subject myself to watching the lottery unfold, or will it be a good time to take the kids to the zoo. Of course if I Polar Bear exhibit and hear the inevitable “Wolves get the 5th pick”, I may may tempted to join the bears.
Well, first
“20 million” is a lot different than “20-40 million” and second, I have no reason to believe David Stern.
Besides, even if, in some accounting world, the league does lose that much, what exactly is he including? My point being, he’s going to make it sound as bad as it can possibly sound for public consumption. That doesn’t make it true.
by Eric in Madison on Mar 16, 2010 3:51 PM CDT up reply actions
There is very little evidence
that the Wolves are losing, say, $20 million per year. But there is zero evidence that they are doing better than that.
There is also no evidence that Kahn and Taylor are going to spend substantial sums of money on improving the team. As much as fans would like to believe that were true, and as much as the Wolves would like season ticket holders to believe that will be true and boy you better get your season tickets now because man when we’re up to 35 wins a season whooeee the Target Center (assuming it’s big enough to hold the ginormous number of people willing to shell out 200 bucks a ticket forty times a season) is going to be rocking and we won’t even need or take your money because you didn’t get in on the ground floor.
Quite frankly, I’m surprised that anybody would fall for this crap. Spend some money, show some competence, win some games, and the fans will turn out. Until then, the losses (financial and otherwise) will continue.
No doubt
The idea when you are running a business is this:
1. Invest in providing a quality product
2. Market that product
3. Get customers
Sports teams seem to often think they can operate backwards.
by Eric in Madison on Mar 16, 2010 4:17 PM CDT up reply actions
Well,
to a certain extent, their backwards business operations were validated during the 90s and Middle Oughts. This time it’s truly different, and we’ll see massive deflation in revenues, salaries, and team valuations. Money is too tight, there are too many options for discretionary spending, and too many unknowns to put, say, $16,000 a year toward four decent season tickets.
I'm a little confused by this exchange here
EiM is being the more optimistic one! I feel as if EiM is usually the one bringing our optimisim back down to earthly levels (not that this display of optimism is even remotely unrealistic like most of our attempts at optimism are around here).
I was just reading his quotes wondering the same thing. Losses “could” reach 400M. What are the chances that they do? What are you including and excluding from these losses? Is this overall loss or are you talking about just the losses and not the teams with gains? It’s really not very definitive and I don’t think it was meant to be. Very Kahn-esque, IMO.
You're confused?
I don’t think I’m being particularly optimistic. I just think we don’t know what the payroll is going to be next year, but that Kahn hasn’t ever even hinted at not spending the cap space, but has referred to the cap space as an asset (a word you can’t spell without “ASS” by the way) he’s planning to use to improve the team.
Perhaps, as PD suggests, that’s a bunch of BS, and they will pocket the savings. I’m not yet ready to concede that is definitely what’s going to happen.
by Eric in Madison on Mar 16, 2010 4:20 PM CDT up reply actions
As I've mentioned several times
on this site, I’d love nothing more than the team to rapidly improve via taking on well-paid but unwanted players in trade, and outbidding other teams for free agents. But aren’t we coming up on the Fifth Window of Kahn’s Five Windows of Opportunity to Maybe Win 30 Games In a Season? Show me how the team has spent anything other than on players in the Bargain Bin, or that they have the ability to obtain and coach players to win games.
"More" optimistic
and that’s not a bad thing! Not an insult, sorry if it came off that way.
I can’t blame them for pocketing the savings. That is IF nothing presents itself. There is nothing wrong with saving 10M instead of spending it on overpaying guys like Wilkins or even Darko. I’d prefer if they could get some players to at least reasonable deals, but if it’s not possible, saving that money is better for their business and for my sanity if the player they are overpaying is Sasha Pavlovic.
But what we can really take out of this is that Jonny Flynn is the smartest PG in the league. After all, you can’t spell assist without “ass” either!
Oh, I wasn't taking it as an insult
Though sullying my good name with a word like optimism…Now that I think on on it, how dare you!
…You can, however, spell “turnover,” which Jonny seems to have learned.
by Eric in Madison on Mar 16, 2010 4:30 PM CDT up reply actions
See
when all is said and done, Jonny isn’t keeping his assist to turnover ratio near 1, he is being smart and keeping his ass to non-ass ratio near 1…
I apologize for the optimism comment, it was only directed about that specific comment. From now on, I shall try to earn your respect back by addressing you only as, Pessimistic in Madison…. Maybe I will also start out each comment to you as “Dear Abby,” as well.
Something else about the Kahn comments
He hasn’t talked about using cap space as much lately. I think that is partly because so many teams freed up space that he realizes a 14 win team in Minny can’t attract a premium free agent.
Also, cap space can be used in several ways. It could be they use the space to get a “free” player or two. What I mean is find a luxury tax team, offer to take a low paid player from that team, and in exchange also get a few million dollars. The luxury tax team does it to get under the tax threshold.
Strangely enough, I think the cap room will be used
in a trade, but it won’t be covering the salary of the player Kahn actually wants.
I think Kahn wants to build around youngish players. Youngish players that are good don’t tend to get traded and don’t tend to have big contracts (yet).
So my guess is that Kahn takes on a shortish bad contract in order to acquire a promising young player on a rookie deal or (more likely) to acquire another top 10 or top 5 pick in this summer’s draft.
I think Kahn is going to end up dealing Al, Love, or both. I’d guess he would do that for another lottery pick if it is high enough.
Most of the teams that wanted cap room for pursuing Bron & co. probably already have enough. So it would be a bad team with bad contracts trying to save $$ or start over. Indy is pretty well positioned already to shed their bad contracts in the summer of 2011. But maybe they make a deal if Granger keeps make unhappy comments. Detroit is a mess. So is Philly.
"It's tough to make predictions, especially about the future." -- Yogi Berra
I think this is closer to how the cap space gets used
I am finding the Granger comments to be interesting. He might force Indy’s hand this summer….maybe that’s why someone leaked the Jefferson/Granger “rumors” a couple months ago. Let’s see, Jefferson and the Charlotte pick for Granger perhaps??
Unfortunately Granger mumbled about
how great it would be to leave that losing situation and go to a big market where a player could maximize their earning potential. Does not exactly sound like a request to be traded to Minny.
"It's tough to make predictions, especially about the future." -- Yogi Berra
by Wile E Coyote on Mar 16, 2010 9:06 PM CDT up reply actions
I noticed that also
but he is signed long-term and Indy may decide he needs a change of scenery. Not sure many big market teams have the assets right now that Indy wants for Granger…or they can’t afford to give up the assets for Granger, while the Wolves can.
Trying to be an optimist a little on this take.
Unless
They want to trade for raw cap space. NY could pick him up for basically raw cap space (as a fallback if they miss out on the other Tier 1 free agents). Indy (hopefully) isn’t foolish enough to give him up for just cap space (unless they are trading with us), so they would have to have another target in FA that they would in turn go after.
Not impossible, but very unlikely.
by Cedarpenguin on Mar 17, 2010 7:27 AM CDT up reply actions
People will criticize me for this...
But if they got Turner or Wall, including him with cap space would be a very attractive package for another team.
by pagingstanleyroberts on Mar 17, 2010 11:10 PM CDT up reply actions
For what...?
If we’re not getting a Tier 1 “transformational” player back, it doesn’t make sense to trade a potential one away.
by CourtsideATX on Mar 23, 2010 8:39 PM CDT up reply actions
Assets don't.......
mean a thing, if they aren’t used or used the right way, I’m so sick of watching this crap, we have to have one of the worst rosters in on the league, we don’t have a perimeter guy worth a crap, even Harris of the Nets is better than what we put out on the floor. Flynn just looks terrible out there. At least last season the team showed hope and promise before Jefferson went down, this season has just been a complete waste.
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