Posts Tagged ‘Brooklyn Nets’

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Fourteen of the NBA’s 30 franchises lost money last season before receiving revenue-sharing cash from the league, and nine of those teams still ended up in the red after that, according to confidential financial records obtained by ESPN’s Brian Windhorst and Zach Lowe.

The report appears to confirm suspicions that despite record income from national television contracts, some teams are having trouble turning a profit – and not just in small markets.

The nine franchises to reportedly come out in the red, by the league’s accounting, after revenue sharing are: the Atlanta Hawks, Brooklyn Nets, Cleveland Cavaliers, Detroit Pistons, Memphis Grizzlies, Milwaukee Bucks, Orlando Magic, San Antonio Spurs, and Washington Wizards.

The Spurs and Cavaliers may raise eyebrows given their combined runs of success, but it was already widely reported the Cavs lost $40 million during their 2015-16 championship season – due in part to a $54-million luxury tax bill.

At the end of the day, small cities such as Memphis and Milwaukee cannot compare to markets like Los Angeles. However, Brooklyn is part of New York City, and Washington and Atlanta rank as the nation’s seventh- and 10th-largest media markets, respectively.

At least one owner brought up the idea of expansion as a way to increase team income, the report states. An expansion fee – likely over $1 billion per team – would be divvied equally among NBA owners and not subject to the 50-50 basketball-related income split with players under the collective bargaining agreement.

Commissioner Adam Silver is on record as saying expansion is not a priority, although markets such as Seattle may be soon waiting in the wings for a new team. Relocating less profitable franchises is another option, something a handful of richer owners have suggested, according to Windhorst and Lowe.

The chasm between the NBA’s most profitable and weaker franchises will be discussed at the league’s next Board of Governors meeting at the end of September, sources told ESPN.

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Mikhail Prokhorov wants to offload the Brooklyn Nets but it hasn’t been easy.

Prokhorov was unsuccessful in his initial plans to auction a minority stake in the Nets, so his new strategy is to sell a controlling stake in two stages, according to Josh Kosman of the New York Post.

The plan would have the potential buyer first purchase a minority stake, then include an option to buy the entire franchise after three years, Kosman writes.

Prokhorov believes the Nets could sell for at least $2 billion based on the recent transactions in Houston ($2.2 billion) and Los Angeles ($2.1 billion).

The Barclays Center, where the Nets play, will still be retained by Prokhorov. However, rent may be lowered in order to entice a sale. Suitors are likely waiting on a new lease before proceeding with offers.

Alibaba executive vice chairman Joe Tsai is reportedly interested in purchasing the Nets, according to Kosman. There’s also a host of “Wall Street types” that are also keeping tabs on the situation.

Prokhorov purchased 80 percent of the New Jersey Nets for $200 million in 2010 and relocated to Brooklyn in 2012. That acquisition allowed him to build the Barclays Center, which quickly grew to become one of the top sports and concert venues in New York City. He eventually purchased full control of both the Nets and Barclays Center in 2015 for an additional $1.7 billion.

The Russian Oligarch promised to deliver a championship within five years of the team’s purchase, and promptly spent deep into the luxury tax for a host of former All-Stars. The execution of that strategy failed miserably as the Nets only have one playoff series win in seven seasons to show for Prokhorov’s bottomless spending.

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Having received little interest in minority shares, Russian owner Mikhail Prokhorov is now considering upping the ante and selling a majority stake in the Brooklyn Nets, according to The New York Post’s Josh Kosman and Brian Lewis.

After seeing the level of intrigue surrounding the Houston Rocets ever since their owner, Leslie Alexander, put the franchise up for sale, Prokhorov is reportedly hopeful there will be some parties who also give his Nets a look.

“As word gets out about the new Nets process, some of the Rockets interest may spill over,” an unnamed source said.

A group of Chinese investors has reportedly caught the eye of both teams. Houston still has an enormous fan base in that part of the world because of eight-time All-Star Yao Ming, while Brooklyn’s support is on the rise due to Jeremy Lin being on its current roster.

“Our brand in China is growing, in merchandise sales and commercially,” Nets CEO Brett Yormark told The Post.

With the Rockets reportedly looking for $2 billion in a sale, Prokhorov is seeking a similar valuation.

He initially bought an 80 percent stake in the Nets while they were situated in New Jersey, while also obtaining 45 percent in the Barclays Center. The team moved to Brooklyn in 2012, with Prokhorov eventually taking full control in 2015.

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Is Beyonce getting into formation to buy a piece of the Houston Rockets?

The pop star is reportedly considering an investment in the team, sources told Bloomberg’s Scott Soshnick.

A native of Houston, Beyonce Knowles-Carter could offer community ties to whoever takes over as the Rockets’ controlling owner, now that longtime owner Leslie Alexander has decided to put the team up for sale.

Her husband, rapper Jay-Z, famously owned a small percentage of the Brooklyn Nets, playing a pivotal role in their relocation from New Jersey in 2012. He was forced to sell his stake in the team in 2013 in order for his upstart sports agency, Roc Nation Sports, to be allowed to represent NBA players, per league rules.

It’s unclear if his ownership of Roc Nation Sports could impact Beyonce’s ownership bid with the Rockets, but there’s a second ramification that stems from Jay-Z’s tenure as an owner: the colloquially named “Jay-Z rule.”

The league’s board of governors passed a rule several years ago mandating that each minority stakeholder in a team must own at least one percent, with no greater than 25 individuals in an ownership group altogether.

With team valuations skyrocketing since Steve Ballmer purchased the Los Angeles Clippers for $2 billion in 2014, that limits the potential for small-stake figurehead owners from owning a piece of a franchise.

Therefore, if Beyonce wants to be a minority owner of the Rockets, and Alexander angling for at least $2 billion for the team, the “Crazy in Love” singer would pony up at least $20 million for a one percent stake. Forbes valued Beyonce’s net worth at $350 million earlier this year, but even still, the economics of the league are very different from even four years ago.

There will be much to consider and red tape to navigate for Beyonce if she’s serious about joining the NBA family.

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D’Angelo Russell was introduced to New York media Monday as a member of the Brooklyn Nets, and sounded like he’s ready for a fresh start after two tumultuous seasons with the Los Angeles Lakers.

“I’m just excited to be here,” Russell said, according to the New York Times’ Malika Andrews, before acknowledging Lakers team president Magic Johnson’s thinly-veiled shot at him on the way out of L.A.

“It’s the past, so it’s irrelevant, honestly.”

Following last week’s trade of Russell and Timofey Mozgov for Brook Lopez, Johnson told reporters that he needed “a leader” and someone “that players want to play with.”

Russell, 21, is unquestionably a major talent. Yet he hasn’t helped himself in terms of team chemistry with stunts like secretly videotaping former teammate Nick Young. He said Monday his focus is simply to get out and play.

“Me proving anybody wrong is not my focus,” Russell said, according to Basketball Insiders’ Michael Scotto. “That’s another thing that’s not really relevant to me … I’m excited. Like I said, once I heard the trade happened I was surprised. I didn’t look at it as a negative, I looked at it as a celebration and I can’t wait to get in the gym with these guys and just learn from them.”

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Everything’s coming up roses in Beantown, as the Boston Celtics are not only four victories away from advancing to the NBA Finals, but are now also in possession of the No. 1 pick in the 2017 draft.

Celtics co-owner Wyc Grousbeck was smiling ear to ear on Tuesday as the team’s representative at the festivities.

“We got a lot offers in February (before the trade deadline) and I’m glad we didn’t trade the pick,” Grousbeck said, according to the Boston Globe’s Rachel Bowers. “You can write that.”

Boston was in possession of the Brooklyn Nets’ pick as a result of a swap stemming from the 2013 trade that sent Kevin Garnett and Paul Pierce to Brooklyn.

The pick that’s now going first overall was a huge bargaining chip ahead of the deadline, with the Celtics being linked to the likes of All-Stars Jimmy Butler and Paul George, although nothing came to fruition.

Barring a trade this summer, Grousbeck and the Celtics organization have a plethora of options of who they could potentially take, including UCLA’s Lonzo Ball, Washington’s Markelle Fultz, and Kansas’ Josh Jackson.

“We’ve got plenty of time to decide what to do, but I would imagine we would probably make the pick,” Grousbeck added, according to ESPN’s Chris Forsberg. “In today’s NBA, picks are very valuable. You have a young person that you can really help mold and grow with. Bring him in before the max salaries kick in. It makes a lot of sense to keep these picks.”

The Celtics secured the No. 1 overall seed during the regular season with a 52-29 record. They open the Eastern Conference finals on Wednesday at TD Garden against the visiting Cleveland Cavaliers.

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The New York Islanders are apparently being evicted from their Brooklyn home.

Barclays Center officials have decided that it’s no longer in their best interest to house the NHL franchise, Bloomberg’s Scott Soshnick reported Monday, citing people familiar with the facility’s finances.

It’s believed they have decided that the arena can generate more money staging concerts and other events in addition to Brooklyn Nets basketball.

Barclays Center pays the Islanders an average of $53.5 million annually for control of business operations, according to Soshnick.

The Islanders are in their second season in the Brooklyn barn, and since their arrival, there have been complaints from players and fans about ice quality and obstructed views.

The club has the NHL’s third-worst average attendance behind the Arizona Coyotes and Carolina Hurricanes, with 81.1 percent of their seats sold, according to ESPN. In their final season at Nassau Coliseum in Uniondale, the Islanders had almost 95 percent attendance.

Soshnick notes that either side can cancel the current deal. If the Barclays Center chooses that route, the Islanders would need a new home after the 2018-19 season.

The Islanders have not commented on the report, according to Arthur Staple of Newsday.

NHL commissioner Gary Bettman said this about the Islanders’ future at Barclays Center at NHL All-Star weekend in Los Angeles, according to ESPN’s Craig Custance:

Well, the owners are committed to the franchise. They’re committed to New York and the great fan base that has followed the Islanders. There are some issues about playing in Barclays. It may be fundamental to the system, and that’s not something that can be fixed in the short terms. I think as is prudent, Scott Malkin and Jon Ledecky are reviewing the situation and looking very seriously at what their options are.