The NBA has seen an influx of new money in the past two years. Does it change anything? Also, ranking the NBA Alexes.
Aug 9, 2011 - The NBA is full of new owners; when Alex Meruelo officially becomes the new majority owner of the Atlanta Hawks(and assuming Joshua Harris of the Philadelphis 76ers precedes him) he'll be the seventh new owner in the league since the start of 2010. That's a lot of new blood.
But there seems to be an assumption that all of the new blood comes in with stacked pockets relative to the old guard, that the new collection of owners is uniformly flush and as such can both afford to lose money to win and can raise the tide of the NBA.
Is that true?
The Venn diagram below sorts the NBA's team owners by how long they've owned their team (low tenure can be found north and west, long tenure south and east) and their reported net worth (lower end to the south and west, higher end to the north and east). This diagram is not to scale, but is a reasonable representation of rank. The 'dividing line' for tenure is, oddly enough, 1998, or the date of the last lockout. The dividing line for net worth is around $500 million. We only took the net worth of the majority owner into account.
I've termed that owners above the $500 million net worth line who have purchased their team in the last 13 years to be "New Money." We didn't include Meruelo in this graphic because there have been no reports as to how much he's worth, and I won't hazard a guess. Of the other six new NBA owners, five fall into the "New Money" category and the other one -- Golden State's Joe Lacob -- comes pretty close. (Net worth figures are obviously fuzzy. One source claims Jerry Buss is worth less than $300 million, which is laughable.)
Of course, Larry Ellison (worth about $20 billion, or roughly what Paul Allen and Mikhail Prokhorov are worth) bid for the Warriors and almost captured them; he tried to bid more than Lacob's $450 million, but the firm handling the deal for old Warriors soulsucker Chris Cohan shut down the bid window. In that alternate reality, all six of the last sales would have been to upper echelon (in terms of wealth) new owners.
But what's that actually mean for the league? What's it mean for fans?
That's the question that will truly decide how this new crop of ultra-rich owners affects the NBA, and I fear we're getting our answer right now: profits and losses still matter ... a lot. Right now, NBA franchises are good value buys that run the risk of annual losses. You don't "win" in many markets until you sell. Instead of accepting that, the owners are pushing to eliminate even that comparatively small risk and make owning an NBA team lucrative in the small and long terms. Owners don't want to sit on their investment and watch its value grow over time. They want to extract an annual income in addition to that.
And they seem willing to kill an entire season of basketball to win that concession, which is no way to treat their paying customers.
So in the end, all the New Money in the world isn't helping. Replacing the old guard with billionaires and near-billionaires doesn't change the fact that the NBA refuses to play another game without guaranteeing profits for its billionaires and near-billionaires (and the other poor saps too).
In honor of the Hawks' new owner, here are the authoritative Alex Power Rankings.
1. Alex English
2. Alex Hannum
English over Hannum, a two-time NBA championship and one-time ABA championship coach, will be controversial to some. It was English, David Thompson and Dr. J who brought back the stylish scoring small forward trope. And now, a highlight video narrated by Nick Van Exel:
3. Cory Alexander
As you can see, the Alex Power Rankings are not very deep.
4. Alex Groza
An original NBA player who only lasted two seasons, but later coached a bit in the ABA and ran the Rockets' front office for a spell.
5. Alexis Ajinca
6. Alex Acker
Don't make me regret this, Alexis!
7. Joe Alexander
8. Alex Tyus
9. Alex Oriakhi
Told you they weren't deep.
10. Courtney Alexander
The Hook is a daily NBA column written by Tom Ziller that runs on SBNation.com Monday through Friday. See the archives.
3 comments
Comments
Prokhorov
Under the terms of his deal with Bruce Ratner, he set aside $60 million to cover the Nets expenses in New Jersey…including debt service on the Nets $200+ million in loans, a significant amount of which was owed to the NBA (more than 10%). The $60 million was supposed to cover two years of expenses and debt service while the team is in Jersey. It ran out in June and Ratner’s parent, Forest City Enterprises, is once again on the hook for debt service and operating losses. Once the Nets move to Brooklyn, it is my understanding that Prokhorov will be responsible for 80% of debt service and operating losses (if any). Prokhorov has said he expects the Nets to make $30 million immediately on arrival in Brooklyn.
Prokhorov told a Russian news service in December that he expected the Nets will be worth $700 million and the arena $1 billion. He owns 80% of the Nets and currently 45% of the arena, but that number almost certainly will rise in 2013 under a debt-for-equity arrangement he and Ratner have. Unless Ratner comes up with $104 million in September 2013 to pay off arena infrastructure junk bonds Prokhorov bought in 2010, The Big Russian will control 75 to 80% of the arena as well.
Considering he has invested between less than half a billion total in both, it would be a good deal.
by Net Income on Aug 9, 2011 11:10 AM EDT reply actions 4 recs
I don't know if Ted Leonsis can be called a truly untenured owner of the Wizards
because he (and his partners) have owned nearly half the team since 1999 when he bought the Caps away from Pollin. They clearly had to have continuous influence on the team for the 11 or so years before they took over the rest of the team.
by thewiz06 on Aug 9, 2011 11:52 AM EDT reply actions
Everything I read was that Ellison submitted his bid after Lacob/Guber and thus in the interest of completing the sail, Ellison’s bid was seen as a late bid meant to create confusion. I don’t believe Larry Ellison ever was willing to pay 450 million for the Warriors, and if he wanted them badly, and had followed the rules of the auction like Lacob & Guber did, there is no reason Cohan wouldn’t have accepted the 500 million bid.
Ellison screwed up and made a calculated gamble that didn’t work to his advantage.
Nonetheless good points all the way around. I’ve rather enjoyed the summer series breaking down the lockout issue’s so thanks.
No mistakes in the tango, Donna. Not like life. Simple. That's what makes the tango so great. If you make a mistake, and get all tangled up, you just tango on.....
by pookeyguru on Aug 15, 2011 12:42 AM EDT reply actions
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