Spencer Dinwiddie Makes Strides Over Summer
- Heading into his fourth season and second with the Nets, second-round pick Spencer Dinwiddie has slowly started to make a name for himself. Brooklyn head coach Kenny Atkinson sees what the guard is capable of and wants to get him more minutes in 2017/18. “As well as he is developing, I’m really excited about him,” Atkinson told Alex Squadron of the New York Post. “I think he’s going to have a really good year.”
- Recently acquired forward Allen Crabbe finally made his debut for the Nets. As Brian Lewis of the New York Post writes, Brooklyn had been looking to bring Crabbe aboard for a while now, stretching all the way back to last offseason.
Latest On Nets’ Ownership Situation
Reports on a potential sale of the Nets have surfaced throughout the offseason, with current owner Mikhail Prokhorov publicly conveying a desire to sell up to 49% of the franchise and denying reports suggesting that he’d be willing to give up control of the team.
This week, a pair of new reports have provided some updates on that process, so let’s dive in and round up the highlights…
- Prokhorov is getting closer to selling the Nets, and multiple suitors are in the running to purchase 49% of the franchise, sources tell Josh Kosman of The New York Post. The proposed sale wouldn’t include ownership of Brooklyn’s Barclays Center, per Kosman.
- Although a potential buyer would only receive a minority stake in the club at this point, the proposed agreement would give that investor the right to buy a larger stake and become controlling owner of the franchise within three years, Kosman reports.
- In the wake of the Rockets selling for $2.2 billion, Prokhorov is seeking a sale price that values the Nets at over $2 billion as well. That means a 49% share of the franchise could be worth in the neighborhood of $1 billion.
- Two sources told Jessica Toonkel and Olivia Oran of Reuters that Alibaba executive vice chairman Joe Tsai is in advanced talks to buy a stake in the Nets. However, Alibaba spokesperson Jennifer Kuperman called it a “false” report. “Joe Tsai has never talked to the seller and he is not purchasing any stake in the Brooklyn Nets,” Kuperman said in a statement.
- Reuters’ initial report indicated that an agreement with Tsai could be finalized within the next few weeks, with a franchise valuation of about $2.2 billion. However, those sources cautioned that the deal could still fall apart.
- Kosman, who has previously reported Tsai’s interest in the Nets – which Alibaba denied at that time too – was unable to confirm whether the Taiwanese billionaire is currently in talks with the team.
Kenny Atkinson On Jeremy Lin/D'Angelo Russell Usage
The Nets‘ two best players may very well play the same position so preseason will serve as a good indication of how head coach Kenny Atkinson plans to utilize the tandem. Brian Lewis of the New York Post writes that hoops fans could see the pair of point guards employed together at the beginning and end of halves.
In 24.5 minutes per game for the Nets last season, Lin emerged as a top offensive priority before an injury cut his campaign short. This year, however, the 29-year-old will share backcourt duties with Russell, the 2015 No. 2 overall pick, and the chief haul in general manager Sean Marks‘ deal to take on Timofey Mozgov‘s contract.
Tyler Zeller Doesn't Understand Demotion In Boston
- Nets coach Kenny Atkinson is confident that his centers can exceed expectations, according to Brian Lewis of The New York Post. Brooklyn traded for Timofey Mozgov, drafted Jarrett Allen and signed Tyler Zeller over the summer to form a center by committee. Zeller, who had a productive year in 2014/15, can’t understand why the Celtics cut his playing time over the past two seasons before waiving him in July. “It was one of those things I was trying to figure out all year,” he said. “They had a great year, so I can’t say they made the wrong decision. But at the same time, I wish I was a part of it. I felt like I could’ve contributed more.”
- Nets guard Isaiah Whitehead will keep Andy Miller as his agent, tweets Adam Zagoria of Zagsblog. Miller’s ASM agency has been tied to the college basketball scandal uncovered this week and is the target of a $13.5MM arbitration claim filed by Clippers center Willie Reed.
Nets Sign Akil Mitchell
The Nets have signed Akil Mitchell, the team announced on Twitter, bringing their training camp roster up to 20 players.
The forward went undrafted out of Virginia in 2014 and has bounced around the G League and international scene ever since.
Mitchell will break camp with a Nets team that boasts a number of serviceable options at the four but few outside of Rondae Hollis-Jefferson to write home about.
This isn’t Mitchell’s first exposure to the Nets franchise, he suited up for the club’s Summer League squad in 2015 and was acquired by the club’s G League affiliate last February.
DeMarre Carroll Steps Up As Leader Of Nets
Wiltjer will face stiff competition making the Raptors, especially from the versatile K.J. McDaniels who failed to stick with the Nets last season but has otherwise shown promise as an incredibly versatile, Swiss army knife of a forward.
- The Nets had a leadership void and offseason addition DeMarre Carroll swooped in to fill it. Brian Lewis of the New York Post how the exiled Raptors forward has thrived with his new organization.
D'Angelo Russell Trade Could Impact Sean Marks' Legacy
- Just how well D’Angelo Russell responds to his change of scenery in Brooklyn could impact Nets general manager Sean Marks‘ legacy, Brian Lewis of the New York Post suggests.
Nets' Performance May Affect LeBron's Next Decision
LeBron James‘ future in Cleveland could be tied to the Brooklyn Nets’ performance this season, writes Harvey Araton of The New York Times. The value of the Nets’ unprotected first-rounder that the Cavaliers received in the Kyrie Irving trade won’t be known until much later in the season. If Brooklyn finishes last in the league again, the Cavs will have a 25% shot at the number one selection and their choice of players such as Michael Porter Jr., Luka Doncic and Marvin Bagley.
NBA’s Board Of Governors To Examine Revenue Sharing System
ESPN’s Zach Lowe and Brian Windhorst have published an expansive and well-researched report on NBA teams’ finances, providing details on the league’s revenue sharing system, the impact from national and local television deals, and how a lack of net income for NBA franchises could push the league toward considering relocation or expansion.
The report is wide-ranging and detailed, so we’re going to tackle it by dividing it up into several sections, but it’s certainly worth reading in full to get a better picture of whether things stand in the NBA. Let’s dive in…
Which teams are losing money?
- Nine teams reportedly lost money last season, even after revenue sharing. Those clubs were the Hawks, Nets, Pistons, Grizzlies, Magic, Wizards, Bucks, Cavaliers, and Spurs. The latter two teams – Cleveland and San Antonio – initially came out ahead, but paid into the league’s revenue sharing program, pushing them into the red.
- Meanwhile, the Hornets, Kings, Pacers, Pelicans, Suns, Timberwolves, and Trail Blazers also would have lost money based on net income if not for revenue sharing, according to Lowe and Windhorst.
- As a league, the NBA is still doing very well — the overall net income for the 30 teams combined was $530MM, per ESPN. That number also only takes into account basketball income, and doesn’t include income generated via non-basketball events for teams that own their arenas.
- The players’ union and its economists have long been skeptical of NBA teams’ bookkeeping, alleging that clubs are using techniques to make themselves appear less profitable than they actually are, Windhorst and Lowe note. The union has the power to conduct its own audit of several teams per season, and it has begun to take advantage of that power — according to ESPN, the union audited five teams last season, and the new CBA will allow up to 10 teams to be audited going forward.
How does the gap between large and small market teams impact income?
- Even after paying $49MM in revenue sharing, the Lakers finished the 2016/17 with a $115MM profit in terms of net income, per ESPN. That was the highest profit in the NBA, ahead of the second-place Warriors, and could be attributed in large part to the $149MM the Lakers received from their huge local media rights deals.
- On the other end of the spectrum, the Grizzlies earned a league-low $9.4MM in local media rights, which significantly affected their bottom line — even after receiving $32MM in revenue sharing, Memphis lost money for the season. The Grizzlies will start a new TV deal this year that should help boost their revenue, but it still won’t come anywhere close to matching deals like the Lakers‘.
- The biggest local TV deals help drive up the NBA’s salary cap, with teams like the Lakers and Knicks earning in excess of $100MM from their media agreements. According to the ESPN report, the Knicks made $10MM more on their TV deal than the six lowest-earning teams combined.
- As one owner explained to ESPN, “National revenues drive up the cap, but local revenues are needed to keep up with player salaries. If a team can’t generate enough local revenues, they lose money.”
- Playoff revenue from a big-market team like the Warriors also helps push up the salary cap. Sources tell Lowe and Windhorst that Golden State made about $44.3MM in net income from just nine home playoff games last season, more than doubling the playoff revenue of the next-best team (the Cavaliers at about $20MM).
How is revenue sharing affecting teams’ earnings?
- Ten teams paid into the NBA’s revenue sharing system in 2016/17, with 15 teams receiving that money. The Sixers, Raptors, Nets, Heat, and Mavericks neither paid nor received any revenue sharing money. Four teams – the Warriors, Lakers, Bulls, and Knicks – accounted for $144MM of the total $201MM paid in revenue sharing.
- While there’s general agreement throughout the NBA that revenue sharing is working as intended, some teams have “bristled about the current scale of monetary redistribution,” according to ESPN. “The need for revenue sharing was supposed to be for special circumstances, not permanent subsidies,” one large-market team owner said.
- The Grizzlies, Hornets, Pacers, Bucks, and Jazz have each received at least $15MM apiece in each of the last four years via revenue sharing.
- However, not all small-market teams receive revenue-sharing money — if a team outperforms its expectations based on market size, it forfeits its right to that money. For instance, the Thunder and Spurs have each paid into revenue sharing for the last six years.
Why might league-wide income issues lead to relocation or expansion?
- At least one team owner has raised the idea of expansion, since an expansion fee for a new franchise could exceed $1 billion and it wouldn’t be subject to splitting 50/50 with players. A $1 billion expansion fee split 30 ways would work out to $33MM+ per team.
- Meanwhile, larger-market teams who aren’t thrilled about their revenue-sharing fees have suggested that small-market clubs losing money every year should consider relocating to bigger markets, sources tell ESPN.
- As Lowe and Windhorst observe, the Pistons – who lost more money than any other team last season – are undergoing a relocation of sorts, moving from the suburbs to downtown Detroit, in the hopes that the move will help boost revenue.
What are the next steps? Are changes coming?
- The gap between the most and least profitable NBA teams is expected to be addressed at the NBA’s Board of Governors meeting next week, per Lowe and Windhorst. Team owners have scheduled a half-day review of the league’s revenue sharing system.
- Obviously, large- and small-market teams view the issue differently. While some large-market teams have complained about the revenue sharing system, they’re outnumbered, with smaller-market teams pushing those more successful clubs to share more of their profits, according to ESPN.
- Trail Blazers owner Paul Allen is one of the loudest voices pushing for more “robust” revenue sharing, sources tell ESPN. Some team owners have argued that the system should ensure all teams make a profit, while one even suggested every team should be guaranteed a $20MM profit. There will be “pushback” on those ideas, Lowe and Windhorst note. “This is a club where everyone knows the rules when they buy in,” one owner said.
- On the other end of the spectrum, some teams have floated the idea of limiting the amount of revenue sharing money a team can receive if it has been taking payments for several consecutive years.
- Any change to the revenue sharing system that is formally proposed at the NBA’s Board of Governors meeting would require a simple majority (16 votes to 14) to pass.
Allen Looks Forward To Teaming Up With Russell
- Nets first-rounder Jarrett Allen is looking forward to teaming up with newly acquired point guard D’Angelo Russell, relays Anthony Puccio of NetsDaily. The big man out of Texas had to skip summer league because of a hip injury, so the preseason will be the first chance for Brooklyn fans to see him in action. In a question-and-answer session with Puccio, Allen says Russell provides a perfect complement for his skills. “Being 6’10” and athletic I’ll be doing a lot of pick-and-rolls with D’Angelo – set him good screens, roll to the basket or pop and let him do his work and lob it up to me eventually,” Allen said. “… He’s great with the ball, makes good decisions and makes really good passes. He’s going to find me.”
- Eric Pincus of Basketball Insiders updated his salary totals for two Atlantic Division teams in light of recent signings. The Celtics are at $111,505,141 total and $109,873,911 in guaranteed money after camp deals with L.J. Peak and Andrew White and a two-way contract with Jabari Bird. Tyler Zeller‘s deal with the Nets brought Brooklyn to $97,328,061 total and $94,222,526 in guaranteed cash.