Monthly Archives: September 2011

Metta World Peace issues challenge to Kevin Durant

Bring it

This summer, as the lockout dragged on, many NBA players took their games to the blacktop much to the delight of fans who crowded into cages and gyms around the country. Rucker Park, the most storied of all the playgrounds in New York City, saw its fair share of action. For a time, Kevin Durant lit up the Ruck. In one game he dropped 66 points.

Apparently, not everyone took delight to Durant’s and others’ exploits in New York. Metta World Peace (formerly Ron Artest) took offense to all the NBAers playing in his city over the summer. World Peace has taken to New York’s blacktops every summer since he has joined the league and has made appearances during the annual EBC game at Rucker. Therefore, it is clear to see why he views his team as the tops in the city and took to Twitter on Friday afternoon to issue a challenge to Durant and anyone who would want to face his team, the TruWariers.

Then, later in the evening:

Yes, that is the real e-mail for his management. One can only gather that he is completely serious. So, Queens Bridge, and the rest of the country, standup. Let us hope that Durant accepts the challenge. The rest of the exhibition games have lost their spark, but this one would be something to look forward to, at least after World Peace finishes making movies and the league’s lockout continues.

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NBArmageddon

That's no moon, it's David Stern's newest negotiating tactic.

If NBA talks weren’t already hot enough right now, David Stern just cranked up the heat a little more.

During one of the busiest weeks these NBA labor negotiations have seen in the 91 days of the lockout, Stern announced that the 2011-12 season could be cancelled if major strides aren’t made in talks by the end of the weekend.

The NBA has already postponed training camps and cancelled preseason games scheduled for October 9-15.  Additionally, it has been speculated that the league would like to all together avoid an abbreviated season like the one in 1998-99, which means any cancelled games would ultimately lead to a cancelled season.

However, some have stated that Stern is using such words as more of a negotiation tactic in order to help get the ball moving before the biggest day of talks starting tomorrow in New York.  The NBA Players Association has asked several players such as Kobe Bryant, Dwyane Wade and LeBron James to be present at Friday’s talks.

Wade, who is already in the Big Apple for business meetings has stated that he is ready to get involved.  He was present in Dallas for the meetings surrounding the 2009 All-Star Game when players were first briefed about the impeding lockout.  Bryant is currently in Asia for a Nike promotional tour and most likely wont be in town for the meetings.  If LeBron shows,  it will be the first time he’s been in the same room with Cleveland Cavaliers’ owner Dan Gilbert since he left for the Heat.

Just a few days ago, NBA Players Association president Derek Fisher urged players to be patient and unify during these negotiations.  In his letter he sent to players on September 27, he stated that players should not back down to the league seeing as they are the key assets of the league.  Not to mention they have become entrepreneurs themselves with their own companies and business ventures that go beyond the NBA.

According to NBA agent David Falk, it’s the players that have more to loose.  If talks fail and the season is cancelled, they will loose $2.16 billion, which was their 57 percent cut of NBA revenue last season.  Falk is best known for representing Michael Jordan and was an instrumental part of the negotiations during the 1995 and 1999 lockouts.  In an interview with Sports Illustrated, he stated that time is running out.

“It’s time to stop fooling around and make a deal. The waiting out period is over,” Falk said. “I can’t prove this and I may be wrong, but if I had to bet a lot of money I would bet that if we miss one game – one – the season will not happen. There are going to be no do-overs this time. That’s what I believe.”

Regardless of his comments, Falk isn’t as prominent in these talks as he was in the past.  He thinks that it’s time for the younger agents and players to step up and educate themselves.

The biggest hurdle in these talks is basketball related income and how it needs to be divided in the league.  Owners want to lower the players’ cut down to 46 or 48 percent while the players wont go lower than 52 percent.  The league’s revenues totaled $4 billion last season, which adds up to each percentage point representing approximately $40 million.

While the issue of BRI stands at the forefront, owners have stated that they will relax on their stance on the hard cap but only if certain conditions are met:

• The “Larry Bird exception,” which allows teams to exceed the cap to retain their own free agents regardless of their other committed salaries, is limited to one player per team per season.  In the past, it could be applied to any amount free agents on a team’s roster.

• The mid-level exception, which the league valued at $5.8 million last season and could be extended by as many as five years, is reduced in length and size.

• The current luxury tax, the $1-for-$1 penalty a team must pay to the league for the amount it exceeds the salary cap, is to be severely increased.  It has been said that they are seeking $4 for every $1 over the cap.

Owners also want a five percent reduction on all existing salaries for the season, a 7.5 percent reduction of all 2012-13 salaries and 10 percent reduction of 2013-14 salaries.

At the end of last season, several owners announced that they had lost millions, now it seems as though they are trying to set up rules to protect themselves from hemorrhaging even more.  Players and agents seek big salaries behind the notion stated above by Fisher: they are the league’s primary assets.

However, the underlying problem is that the NBA has it’s own market and rules that apply to it.  Players expect a certain amount and owners know this.  Each has to outbid others to either attract or resign a certain player.  It’s money that controls where they play in most instances and that’s certainly not about to change.  With this lockout, foreign teams have become even more present in this bidding war and to be frank, they are gaining more and more power in this game as the lockout continues.  Even five-time champion Bryant has stated that playing in Italy is an option.

The 1998-99 season is regarded as a joke and ironically resonates as an important season in NBA history due to how short it was.  With that said, Stern and the players would like to avoid repeating history 12 years later.  Though a shortened season would be another embarrassment for the NBA, it shouldn’t be ruled out.  More players will leave the league and both parties will loose billions.  With more money lost, sitting down at the negotiating table will be even harder.

More importantly though is that the NBA product will suffer.  Younger players that are missing games will loose the playing time that eventually develops NBA stars, older players will loose another year of their career and coaches will have a possible hangover to overcome in order to get their squads ready once the lockout finally ends.

A lot of money is on the table but if the play in the NBA is hurt, that money would have never been worth fighting for.

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As the Lockout Continues, the Owners draw the Blame

Don't you believe me?

There is a rather large swing taking place in the matter of public opinion, as Henry Abbott pointed out earlier this month, where the NBA lockout is concerned. No longer are the players the ones who are chided for being greedy and wanting more than is feasibly necessary to earn for playing a game at a high level. It should be understood that the players, however, are also not seen as the victims. They are pieces in the grand scheme of the NBA hierarchy, but they are the pawns. Owners have the power, owners never get traded or benched. They have the money and are not content with what they have.

David Stern has been beating his war drum with the rallying cry that the NBA is no longer a lucrative or solvent endeavor for many of the owners. Namely those in small markets. This cry has deadened the ears of all that pay the slightest amount of attention to the NBA or sports in general. Even NPR has run stories about the lockout in the past week. It is affecting more than the basketball world.

What is at stake is terms surrounding a new collective bargaining agreement. If Stern is to be believed, the new agreement must mean that players should shoulder the burden and take all around cuts so that the owners, and their teams, can yet again become fiscally sound. On the surface that may appear as a reasonable agreement. Players make millions as it is, and if they were to agree to such a deal they would continue to make millions. Just not as many millions of dollars. Money is money, right? What would the owners give up though? What is their concession to help the league profit?

The CBA was structured, up until the lockout, with the players receiving 57 percent of Basketball Related Income from the teams. That is the money earned from the sales of merchandise, clothing, ticket sales, parking fees, television contracts, et cetera. Players, in an attempt to move forward in negotiations with the owners, have offered to lower their BRI to 53 or 54 percent. Honestly, it is quite a concession by the players and their union, but the owners do not seem to pleased. David Aldrigde reports:

A source says last week’s latest proposal from the owners to the players started at 50 percent of Basketball Related Income in year one of the (still) 10-year offer, and dropped into the mid-40s for most of the rest of the proposed deal. Is that better than the initial 61-39 owners’ split offer back in February? Yes. But it is still not anywhere close enough to get a deal with the players. Hard to imagine this isn’t exactly how the owners anticipated this would go, and that there won’t be anything of substance to report until the first game checks to players go unprinted in mid-November.

Owners must really be hurting if they are asking the players to take such large cuts to their salaries over such an extended amount of time. The economy must be especially rough for billionaires. It is so tough, that the owners also want a hard cap so that they cannot over-extend their budgets when it comes to acquiring players and subsequently paying them. Plus a hard cap should make the league more competitive. Right?

Essentially, a hard cap is a way for the owners to check themselves and not over pay on a bad investment. Billionaire business men know that there should be no risk in a high stakes deal so why should they front the burden for their own mistakes? That just does not seem like a fair deal. Owning an NBA franchise is a business, after all. That is what Stern has been saying all along. The owners just want to protect their product and their investors. None of them ever felt that their team was something more than that, something more than a business investment wherein profit was the ultimate goal. Especially not Dan Gilbert, the owner of the Cleveland Cavaliers, and one of the most hardline elements at the labor talks.

“To me, NBA franchises are like pieces of art. There are only 30 of them. They aren’t always on the market, especially a franchise that would have been such a natural fit. … If you just looked at the Cavaliers in terms of revenues, profits and balance sheets — and you paid this amount for it — people would say ‘You’re insane! You’re nuts.’ But if you look at all the tentacles, the impact on our other venues, it makes tremendous sense. We have now opened a Cleveland office [of Quicken Loans] and that’s tremendously successful. Our employees love it that we’re associated with the Cavs and can come to games — that helps us attract and keep better people. There are a lot of nonprofit things that can be done with pro sports. It brings an unbelievable amount of excitement.”

That is a quote by Gilbert. It seems that something must have soured his taste on the beauty and privilege of owning a masterpiece. It sure is a same that players have the freedom to chose what teams they can play for once their contracts expire and they become free agents.

Perhaps, though, Gilbert stumbled upon a novel idea, even if he does not buy into it anymore. Maybe the owners should run their teams like a non-profit. There has been a lot of talk about balanced budgets of late so it could behoove owners to balance their own books. However, it is clear that the task of estimating operational costs, gross income, salaries, and whether the team will be good enough to attract fans and sell merchandise to meet that budget is a hard task but these are professional business men. Plus, teams already do this. Obviously, the details will need to be worked out more but it is an option. One that might never be broached, but an option, nonetheless. Owners are savvy and shrewd, they could work something out.

A new outlook on how teams are ran could help the owners save money. Stern has cited on countless times that the small market teams are the ones that are suffering and has used Bruce Ratner’s sale of the New Jersey Nets, soon to become the Brooklyn Nets, to Mikhail Prokhorov, the Russian billionaire, as a prime example of how the owners are hurting. Ratner sold the Nets due to the financial strains that the NBA is enduring even after acquiring (the term is used loosely here) land in Brooklyn, what is known as the Atlantic Yards project, to relocate the team in an attempt to make them more profitable. However, Malcolm Gladwell, who brought to light the Gilbert quote above, sees it differently:

Ratner has been vilified — both fairly and unfairly — by opponents of the Atlantic Yards project. 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. According to Ratner, the Barclays Center (the naming right of which, by the way, earned him a cool $400 million) is going to bring in somewhere around $120 million in revenue a year. Operating costs will be $30 million. The mortgage comes to $50 million. That leaves $35 million in profit on Ratner’s $350 million up-front investment, for an annual return of 10 percent.3 “That is pretty good out of the box,” Ratner said in a recent interview. “It will increase as time goes on.” Not to mention that the rental market in Brooklyn is heating up, the first of Ratner’s residential towers is about to break ground, and his company also happens to own two large retail properties directly adjacent to Atlantic Yards, which can only appreciate now that there’s a small city going up next door. When David Stern says that the “previous ownership” of the Nets lost “several million dollars” on the sale of the team, he is apparently not counting the profits on the arena, the eminent domain victory, the long-term value of that extra 14 acres, or the appreciation of Ratner’s adjoining properties. That is not a lie, exactly. It is an artful misrepresentation. It is like looking at a perfectly respectable kasha knish and pretending it is a ham sandwich.

*Please read the entire article, it is one of the most important ones to date concerning the lockout, NBA, and the owners.

As Gladwell points out, the men who buy NBA franchises are not looking to solely profit from the revenue that the teams create. The team is merely a small part in a grander scheme that can net millions of dollars for the owners separately from just the day-today of basketball operations. Some owners purchase teams in order to secure concession rights to exclusively sell products that they also own. Texas Rangers Ballpark in Arlington sells Nolan Ryan beef products (hotdogs, hamburgers, sausage on a stick) exclusively. Ryan is the owner of the Rangers. Mike Ilitch, who owns the Detroit Red Wings and the Tigers, founded Little Ceasars Pizza. It is not hard to imagine what the official pizza of those two teams is. The Cavaliers play in Quicken Loans Arena, it is no coincidence that Dan Gilbert is the chairman and founder of Quicken Loans.

Others, like Ratner are in it for the real estate. A new stadium generates a lot of potential growth for an area immediately surrounding it. With that growth comes na obscene amount of profit potential. Ross Perot Jr. purchased the majority interest in the Dallas Mavericks in order to develop the area surrounding the American Airlines Center into what is now Victory Park. Mark Cuban, who has had a nasty legal dispute with Perot Jr., is now the majority owner of the Mavericks, but Perot Jr. is still a minority stake in the team. It is clear why he gave up ownership of the team. It was the same reason Ratner sold the Nets. The teams had served their purpose. NBA franchises are not works of art. They are business collateral. The new arena that will be built in Sacramento to placate the Maloofs and the NBA in order to keep the Kings will be yet another prime example of this.

By demanding that the players take drastic cuts to their salaries, the owners are attempting to move their ownership of the teams from a prestigious business tool that can garner them more in the long run to a possible longer term business holding. Not only would their developments make them the money, but there would also be an added benefit of their teams making them more money than before. It would no longer mean that a successful team would make money, under the owner’s plans even the teams that drag along the bottom of the league would be financially sound because the players would be the ones taking the cuts.

As more and more information reaches the public on how the owners, not all of them, operate the more their opinions shift. It is not the players who are greedy, they just want their share. David Stern can beat his war drum all he likes, circle the owners’ wagons, and declare that the financial sky is falling. Why stop now? What he must realize is that many owners see the teams as an expendable building block. Why should the players be the ones to suffer most? Fans do not pay money to see the business operations of an NBA team on game night, they pay to see their favorite players perform in the highest professional level of the sport in the world. As the lockout wears on, it is the owners who will start to be the ones who take more of the blame. They have not only locked out the players but also all those people who work in the arenas and parking lots during the games. Beyond that, they have locked out the fans. They have locked out the NBA after one of its most successful seasons and keep demanding more. Patience has a limit, and patience with the owners  is wearing thin.

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Carmelo Anthony had Surgery in May

Under the knife

In a world where information is continually up to the minute and everything is leaked to the public in one way or another, it is odd to know that some topics can still be kept private. At least for a while.

After playing for Team Melo against Team Philly in what was billed as the “Battle of I-95,” Carmelo Anthony revealed that he underwent both knee and neck surgery in May. Marc Berman of the New York Post has the story:

Anthony said it was the first time in his life he’s had surgery.

“I did both of them,” Anthony said. “They were bothering me seven years.”

Anthony said the procedures came at the same time. The Post had reported in June that he was shut down in the offseason by the Knicks to rest his elbow bursititis, but Anthony had never complained about knee soreness.

He did not return to the basketball court until August when Team Melo, representing Baltimore, started its barnstorming tour. The 6-8 small forward claims he’s down to 230 pounds – which is four pounds less than he was last season.

Anthony looked no worse for ware as he scored 31 points in the exhibition game but grew tired in the second half and scored just 11 points during the final 24 minutes. He played all 48 minutes of the game in the un-air-conditioned Palestra at the University of Pennsylvania in front of a crowd of 8,000.

Conditioning will likely be a common problem for almost every player in the league when, or if, the NBA season begins. However, Anthony has stated that he will be attending the minicamp that will be held by his Knicks teammate, Amare Stoudemire.

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Highlights from Team Philly’s defeat of Team Melo

Despite being met with a chorus of boos, LeBron James put on a show for those who attended the “Battle of I-95” on Sunday. The crowd seemed rather impressed with his scoring ability, he scored 43 points, as was evident by their reactions to some of his buckets.

via Hoopmixtape

James, however, was not the only player to put on a show. Take a look at Ball is Life’s Top 10 plays from the exhibition game. Tyreke Evans displayed a number of highlight moves himself. (Number six is my personal favorite.) It is also nice to see Hakim Warrick flying around the rim again, hopefully he can find a way to start doing that in Phoenix.

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Team Philly beats Team Melo in Battle of I-95

It didn't matter, but that doesn't matter

With a week of the NBA preseason having already been canceled, 43 games in all, players and fans alike are staring at a grim future. Some players have already begun calling player workouts for their teammates to get into shape, holding out hope that there will be a season. Other players have chosen to participate in various street and city leagues or games for either charity or celebrity reasons. Another such game took place on Sunday featuring several players who have made appearances in pro-am and exhibition games throughout the summer.

LeBron James, Carmelo Anthony, and Chris Paul teamed together for the second major matchup featuring Anthony’s Team Melo from Baltimore. They faced off against Team Philly in what was billed as the “Battle of I-95.” However, the three members of the Redeem Team found little success in the Palestra as they lost in front of a hostile crowd, 131-122. A rough start would be the stars’ undoing, the Associated Press reports:

Fourth quarters were the problem for James in the finals, but this time his team couldn’t undo his start.

The passionate Philly fans booed James when he came onto the floor and even louder during pregame introductions, and they were delighted when the local team threatened to run the All-Stars off the floor in the opening minutes. With speedy guards [Lou] Williams, [Kyle] Lowry and [Tyreke] Evans repeatedly getting by their defenders, Team Philly raced to a 22-6 lead that it extended to 35-16 later in the first quarter.

James had only four points in the period.

Team Melo took the lead in the final period, but Lowry led a late flurry to pull it out for Philly.

James finished the game with 43 points and 23 rebounds (yes, you read that correctly), leading all scorers, while Anthony had 31 points and 17 rebounds for Team Melo. Paul only had six points but tallied eight assists and five rebounds. Lowry scored 34 points, Williams had 31, and Evans poured in 18 points and grabbed 18 rebounds for Team Philly.

Before the meeting rumors swirled that Allen Iverson and Kevin Durant would participate. However, neither did.

The game was organized by Hakim Warrick, who suited up for Team Philly and scored 19 points and pulled down 12 rebounds. Mark Tyndale, Aaron Owens, Mardy Collins, Dionte Christmas, Wayne Ellington, and Ronald Murray rounded out the rest of Team Philly.

Before play began, all of the players donned ironic shirts as they went through warm ups that read: “Basketball Never Stops.” Unfortunately no one seems to have told the owners this as labor negotiations still seem to be mired. Perhaps one day the NBA will have a sense of normalcy to it again, until then fans and players will have to find outlets such as this to pass the time so sit back and enjoy them. It is all we have. Fans who attended the game know that as it was sold out.

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Green Card for the Kings

The Maloof Empire needs a new palace.

While some NBA players are looking overseas for jobs, one franchise is looking abroad for cash.

Today, the Sacramento Bee reported that the Kings will be looking for funding for its new stadium from a little know federal program that offers green cards to wealthy immigrants who invest in business enterprises in the United States.

The program, known as EB-5, could be crucial in the funding for the proposed $387 million arena.  Sacramento Mayor and former NBA player Kevin Johnson has assembled a “task force” aimed at building the Kings a new arena and ultimately keeping them in the state capital.  Though the program won’t provide all of the funding for the arena, it could supply a substantial amount of money for the project.

The program, created by the Immigration Act of 1990, has projects in 25 states with 15 in California including the redevelopment of McClellan Air Force Base in Sacramento.  The project provided $18 million to transform the base into a business park.  CMB Export, the company that found money for McClellan, says it has raised a total of $350 million for projects throughout California.

In fact, the program has already provided $249 million to finance improvements around the new NBA arena in Brooklyn, NY.

In order for the investors to obtain a green card through the program, they must invest $1,000,000 into a project (or at least $500,000 in an employment area) that preserves or creates 10 at least 10 jobs in rural or high-unemployment areas.  However, if the project fails within three or four years of the investment, the green cards will be denied.

Money from this program could be key in building the new stadium for several reasons beyond just simple funding.  It could soften the political climate around the arena since it would call for less money from the actual city.  Mayor Johnson’s task force has proposed selling off several pieces of city owned property that has angered several members of the city’s city hall.  Such selloffs could harm the already lowered property values of Sacramento.

The initial money raised by the program could also serve as a bridge loan for the new arena allowing construction to start very soon.  Unemployment has lowered in the area from 12.5 to 11.9 percent over the course of the summer but still sits at 12.4 percent in Sacramento.  The construction project alone could provide several jobs in the area.

However, this program has failed before in California.  Last year, US Citizenship and Immigration Services, which oversees EB-5, ended a project that raised $7.5 million to build a wastewater plant in the Southern California town of Victorville.  Officials in the small desert town proposed that the treatment plant would attract a Dr. Pepper Snapple bottling plant.  The agency wasn’t convinced of any correlation between project and job creation so the project was cancelled.  Subsequently, only one of the investors received a green card, which was a temporary one at that.

Earlier this month, Mayor Johnson revealed a plan that will provide 4,100 jobs and has promised that the area will attract several businesses that will generate millions in revenue.  All of this was proposed to Maloof Sports and Entertainment that decided to keep the franchise in Sacramento last May.  However, a new state-of-the-art stadium is what will really keep them there.

“Yes, if we get an arena built that meets our specifications, yes we will stay [long-term],” Galvin Maloof said. “Absolutely. We have to have an NBA, state-of-the-art arena. It doesn’t have to have marble everywhere, but it has to be an NBA type of arena. It has to be approved by the NBA and also by us, but obviously it doesn’t have to be a Taj Mahal. We know the [economic] market that we’re in, but it’d have to be an NBA-approved arena and approved by us and our specifications.” (Sports Illustrated)

Johnson’s task force has until next March to complete a financial plan for the arena.  Ultimately, it is up to the Maloofs to make the decision on whether or not the Kings will stay but EB-5 could be part of the solution.

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