Many people believe that if you win games, you will get attendance, and that will provide all the revenues you need. However, the correlation is not as strong as you'd think. Of the bottom ten teams in attendance last year, five were play-off teams.

What does a team need besides winning to draw in fans? They need to produce something entertaining, that fans don't want to miss seeing. One thing that a losing team can sell to ticket-buying fans is hope. "Watch our young talent show occasional flashes of brilliance! Dream about what they may one day become!"

Hope comes bundled in a fresh batch of rookies every year. They are selected for potential, and their emergence provides a better story than a steady NBA veteran any day. This is particularly true of lottery picks, since they often have the greatest chance of becoming the NBA's most valuable commodity: a superstar.

These players are cash cows. They don't get paid much, because the CBA institutes a rookie scale, but they drive fan interest. Check out the salaries that star rookie players get in other sports, and you'll see how much dreams are worth.

Continue reading this post »

Pau Gasol's salary right now is already one of the most expensive in the league at $18,714,150. However, his deal also comes with a 15% trade kicker, which some (who noticed the kicker) have reported would bring it to about $21.5 mil if he was traded.

Unfortunately for Gasol, as a vet with 10 years experience, the Collective Bargaining Agreement limits max deals can be 35% of the cap, so the max he can make is $20.3 (35% of $58 mil).

Some may point out that to be traded, Gasol would have to waive some of his trade kicker, and so he'd carry a de facto no-trade clause. However, the CBA automatically reduces the kicker to an amount that brings him to the max, and the player has no say in it.

Finally, while next year's salary cap may be fixed at $58 mil again regardless of BRE, players' contracts can surpass the max with normal raises. Gasol's deal will increase in proportion to his original deal, so the bottom lineis, if Gasol is traded, he will make a whopping:

2011-12: $20.30 mil

2012-13: $20.61 mil

2013-14: $20.92 mil

Continue reading this post »

Cleveland's win last night pushes their record a game ahead of the Wolves, improving our lottery odds. 

Tonight's Memphis game at Portland could raise the value of that pick from 21 to 19.

Read more under the fold

Continue reading this post »

A bad day for the Wolves sometimes means a good one for the Wolves' picks.  The bright spot with MIN losing to SAC, combined with the Wizards victory, is that MIN moved to the second worst record.  The second position improves our lottery odds of getting a better pick as demonstrated by its expected value.

  EXP VAL
#1  2.642
#2  2.979
#3  3.407
#4  3.965
#5  4.688
#6  5.546

6. 22-46 NJN
5. 20-49 TOR (@den, @pho, @gsw, @lac)

4. 17-51 WAS (@por, @lac, @den, @gsw)
3. 17-51 SAC (@chi, @mil, @ind, @phi)
2. 17-54 MIN (@dal, @okc, bos)

1. 13-55 CLE (orl, njn, det, atl)

Our last 11 games look like this:

MIN @ DAL
MIN @ OKC
BOS @ MIN
CHI @ MIN
MIA @ MIN
MIN @ MEM
MIN @ NJ
PHX @ MIN
MIN @ DEN
MIN @ PHX
HOU @ MIN 

Also, HOU edged UTA, and pushed them down to 11th in the West.  Tomorrow the Jazz have a back-to-back to face the rested Grizzlies in Memphis, but I'd love to see them win.

5.  41-29  Denver  (tor, sas, was)
6.  40-30  Portland (was, sas, @okc)
7.  40-31  New Orleans  (@uta, @pho, @lal)
8.  38-32  Memphis  (uta, @bos, @chi, sas)
===============
9.  37-34 (1.5 games out) Houston  (gsw, @mia)
10  35-33 (2.0 games out) Phoenix  (@lal, tor, nor, dal)
11  36-34 (2.0 games out) Utah  (@mem, @okc, nor, dal)

Since there are still about four weeks left in the NBA schedule, I'll hold off on discussions of tie-breakers, home-away record and such, and just give you an early head's up about where our picks stand.  Like March Madness, if you keep an eye on which wins and losses help our picks, you can find yourself cheering for the Suns to beat the Warriors almost as much as you may cheer for the Richmond Spiders.  On any given night, we can check the schedule and become fans of a dozen teams.

6.  22-44  NJN
5.  18-49  TOR  (was, @okc, @den, @pho)
4.  17-52  MIN  (@lal, sac, @dal)
3.  16-50  WAS  (@tor, njn, @por, @lac)
2.  16-50  SAC  (phi, @min, @chi, @mil)
1.  13-54  CLE  (@lac, orl, njn)

The Wolves have gone 4-6 in their last ten, and have moved from second-from-the-bottom to fourth in winning percentage.  The team has played three more games than SAC or WAS, which means that while the other teams have more chances to get a win, they will be playing with less rest.  I can never advocate tanking, but plan to write an article exploring the difference in valuation in the weighted lottery for the final position.


Things get much more interesting when we look at our other picks:

Continue reading this post »

Last week, while Darren "Doogie" Wolfson filling in for Joe Alexander over on ESPN 1500, he brought up an interesting point, including a nice plug for our posters at Canis Hoopus. 

He had just read an article by James Pearlman from the WSJ.com, talking about how people were more enthralled by the drama surrounding the Carmelo Anthony saga, than the actual play of Melo, and he compared it to the Wolves. 

But I'll tell you this much Nick.  Talk to people at the Star Tribune.  When Souhan just destroyed the entire franchise recently, "Fire Kahn.  Fire Rambis.  Fire Rob Moore.  Fire Glen Taylor.  Fire the Janitor.  Fire the Assistant Video Guy.  Fire Everybody."  I bet that story at startribune.com got over 10,000 hits. 

Whenever Jerry Zgoda blogs about a potential trade, a potential roster move, those stories get 10 to 20 thousand hits.

Canishoopus.com, my favorite wolves site, a money site, tonight's game recap might have 200 comments.  Wednesday, 24 hours before the trade deadline, one of their threads had thousands of comments. 

We care, when it comes to the Wolves, way more about what roster move or moves will take place this summer, who will get drafted, Harrison Barnes, Perry Jones, Terrence Jones, Kyrie Irving, way more than we care about how they will do for the rest of the year.  

With the strong chance that Eddy Curry's contract may be included in an Anthony Randolph deal, I thought I'd try to write a quick article explaining the cost of swapping Curry's deal with our available space under the salary cap.

Eddy Curry's deal has a cost to the Timberwolves in three distinct ways:

Continue reading this post »

 In David Kahn's Letter to the Fans on September 14th, Mr. Kahn named three distinct time periods he was targeting to trade our $11.77 million in cap space for maximum effect.

However, if one of our players fails to emerge, we will be prepared  to find more talent for our team – and we will seek a singular move rather than a series of moves, as we did these last 14 months.

Hence, the desire to operate under the salary cap.

Just as we took advantage of Miami needing to move Michael Beasley to a "room" team on short notice, I am hopeful other opportunities will come across our desk at three specific periods during the next several months:

•    Before the 2011 trading deadline, when teams that are over the tax line and not playing up to their capability seek to move a star player as the first step of a rebuild;

•    During the 2011 draft period, when some teams will be seeking to move salary to create room for free agency (although the class of 2011 is not nearly as attractive as the class of 2010); and

•    Immediately following the announcement of the new collective bargaining agreement, in whatever form it may take.

The Timberwolves front office has been very quiet since September, preferring to wait until their team was healthy before assessing what they have, and the moves they need to make.  Now, as the Wolves approach the February 24th trade deadline, they still hold $11.77 mil in cap space, which could be a very valuable trade commodity.

However, one question arises:

Does the asset disappear if they don't use it before the trade deadline? 

Let's take a closer look.

Continue reading this post »

Now that the Wolves have officially reached the half-way point of the season, I suppose that the NBA's Miss Manners would not disapprove if we took a quick look at our potential 2011 picks.

Continue reading this post »

Continue reading this post »

Erick Dampier is not an impact player any more, but he has one of the biggest "impact contracts" in the NBA.  Dampier is on the final year of a deal that pays him $13 million, but the contract is completely unguaranteed.  He can be waived at any time and save his current team, the Charlotte Bobcats, a lot of coin. 

The Bobcats have been rumored to be shopping his deal, but have yet to find a suitable offer.  Worse, the clock is running out on them.  Very soon, they will have to write that first paycheck to Dampier, and its going to have a lot of zeroes.

Surprisingly, the answer may be a trade to a team with ample cap space, like the Minnesota Timberwolves.

The Timberwolves financial positioning gives them the ability to provide a valuable service for the Bobcats (for a small fee of course) when it comes to Dampier.  If CHA waives him, they just get the savings.  However, if they trade him to a team like the Wolves, they still get the savings ..plus they create a $13 mil Traded Player Exception!  The TPE has all the trade value of Erick Dampier with no salary costs, and a longer, one-year expiration date.  It is a very valuable trade chip.

Meanwhile for Minnesota, trading for Dampier and waiving his unguaranteed deal themselves has no negative effect whatsoever.  Any cap space they "trade," they get right back!  

The price tag for Minnesota's service would be negotiable.  We could do a straight deal for cash or a small future pick, and CHA fans on other websites have discussed how Delonte West and even Kostas Koufos could help them.  A deal like:

Delonte West for Dampier + ???

.. would start by saving us the $500,000 guaranteed on West's deal.

For the Wolves, this deal is literally about creating something-from-nothing.  And when you can get paid for "nothing," you're doing your job as a GM.

In an interview on KFAN Tuesday (here's the podcast), Wolves GM David Kahn was asked about a rumor from ESPN's Chad Ford that Philadelphia may trade the #2 if they can unload the $51 million/ 3 year contract of Elton Brand.  While Kahn can't comment directly on other teams' players without risking fines for tampering, he said this:

David Kahn:  If you look at what Brand makes, there's really only one match, salary-wise, so I'm not so certain that it means more money, but I think its a difference in talent and longevity.  All this stuff gets factored in, along with what other opportunities do you have.

We all have a subjective idea that Elton Brand is overpaid, but how can we quantify it, to get a better idea is a trade for Brand and Evan Turner would be worthwhile?

Let's take a look at some of the factors that may go into David Kahn's decision. 

Continue reading this post »

MINNESOTA #2 slot in lottery. Regardless of the final game, MIN is locked into this spot.

CHARLOTTE #16-17.  This is looking like the #16 pick.  Charlotte is locked into the #7 seed, because MIL owns the play-off tie-breaker), so they may rest their starters in the final game of the season.  They'll face the Bulls, who will be playing hard to try to insure they make the play-offs.  Meanwhile, MIL will also be competing, because they still have a chance to pass MIA for the #5 spot in the East, and the chance to face the struggling Celtics.

17. MIL (45-36) ... @BOS
16. CHA (44-37)... CHI

UTAH #23-27.  As expected, Utah beat lottery-concerned GSW.  Boozer strained a muscle in his leg in the first half tonight, and may not be available for the crucial game against PHO tomorrow.  The Suns victory over DEN clumps the standings even more tightly.  The Celtics loss removes their chance to catch Utah, and eliminates the possibility of the pick coming in as high as #22.

27. 1.0 GA .. DAL 54-27  ... SA
25-26. tie .. UTA 53-28 ... PHO
25-26 tie .. PHO 53-28 .. @UTA
24. 0.5 GB .. DEN 53-29  ... (done)
23. 1.0 GB .. ATL 52-29 ... CLE

Tomorrow, the big game is PHO @ UTA.  If UTA wins, they have a chance to clinch the #2 seed, and if PHO wins, they may get to be #3, so we should see a competitive bout.  Meanwhile, the DAL vs SA game has playoff implications for both teams as well, while both ATL and CLE are locked into their playoff seedings. 

I'll be watching PHO-UTA out of self-interest, because if UTA wins this game, our pick is 26-27.  If they lose, coin flips could raise it to #23.  It could be an important single game for our future.

MINNESOTA #2 slot in lottery.  Regardless of the last two games, MIN is locked into this spot.

CHARLOTTE #16-18.  MIA won today, so they join MIL as being two games ahead of CHA with two games remaining. The CHA pick now ranges between #16-18 position. A loss by CHA will lock the pick into #16. If CHA wins its last two, and either team loses both of its last two, CHA can move down from the #16 spot only by winning coin flips.

#18 MIL (45-35) ... ATL, @BOS
#17 MIA (45-35) ... @PHI, NJN
#16 CHA (43-37) ... @NJN, CHI

UTAH #22-27.  PHO won today, and joined DEN and UTAH in a three-way tie. OKC's loss today means they can't catch Utah, and frustrates me over the blown call in the OKC-UTA game.

#27. 1.0 GA .. DAL 53-27 ... @LAC, SA
#24-26. tie .. UTA 52-28 ... @GSW, PHO
#24-26. tie .. DEN 52-28 ... MEM, @PHO
#24-26 tie .. PHO 52-28 .. DEN, @UTA
#23. 1.0 GB .. ATL 51-29 ... @MIL, CLE
#22. 2.0 GB .. BOS 50-30 ... @CHI, MIL

Last night's Jazz loss, and wins by their three closest competitors knocked the Jazz a half game behind three teams, and down to the #24 pick. Five other teams are within 2.5 games behind the Jazz, so a few more Utah losses could really help improve the pick. On Friday, Utah travels to NOH for its third game in four days. Since many of these Western Conference competitors play each other over the last four games (and somebody has to lose), Jazz losses will be critical.

30. CLE 61-17
29. LAL 55-22
28. ORL 55-23 (W)

Half Game Ahead
25-27. DAL 51-27 (W) ... @POR, @SAC, @LAC, SA
25-27. DEN 51-27 (W) ... LAL, SA, MEM, @PHO
25-27. PHO 51-27 (W) .. @OKC, HOU, DEN, @UTA

24. UTA 51-28 (L) ... @NOH, @GSW, PHO

1.5 Games Behind
22-23. BOS 49-29 (W) ... WAS, @MIL, @CHI, MIL
22-23. ATL 49-29 (L) ... TOR, @WAS, @MIL, CLE

2.5 Games Behind
19-21. POR 48-30 (W) ... DAL, @LAL, OKC, GSW
19-21. SAS 48-30 (L) ... MEM, @DEN, MIN, @DAL
19-21. OKC 48-30 (L) ... PHO, @GSW, @POR, MEM

Of course, if teams end the season with the same record, a coin flip determines their draft order.

Continue reading this post »

Picks as of the games of April 4:

MINNESOTA PICK (currently #2 slot in the lottery)

CHARLOTTE PICK  (currently #16) 

UTAH PICK (currently #24-27)  now a 4-way tie

UTAH PICK (currently #24-27)

The Utah pick is Top 15 protected, so we'll be getting it this summer.  However, I think its amazing that with only five games remaining, that pick can still vary between 19-29.

30. CLE 60-17 (L)
29. LAL 55-22 (L)
28. ORL 54-23 (W)

24-27. UTA 50-27
24-27. DAL 50-27
24-27. PHO 50-27
24-27. DEN 50-27

23. ATL 49-27 ... 0.5 games back
22. BOS 48-28 (W) ... 1.5 games back
21. OKC 48-28 (W) ... 1.5 games back
20. SAS 47-29 (W) ... 2.5 games back
19. POR 47-30 ... 3.0 games back

April 6, UTAH vs OKC
April 7, UTAH @ HOU
April 9, UTAH @ NOH
April 13 UTAH @ GSW
April 14 UTA vs PHO

UTA has two back-to-backs, and three games in four days.  A 1-4 finish could slide them down to #19.

Continue reading this post »

I'll try to keep this updated as we watch the games of the final two weeks of the season.  

BOS and SAS beat the top two teams in the league, and OKC beat one of the worst (us), to keep pressure on catching UTA and improving that pick.

Unfortunately, the three teams directly trailing CHA all lost today, helping them maintain their gap.

MIN remains locked in the #2 slot, and mercifully has just 5 games remaining until the end of the season..

Picks as of the games of April 4:

MINNESOTA PICK (currently #2 slot in the lottery)

CHARLOTTE PICK  (currently #16) 

UTAH PICK (currently #24-27)  now a 4-way tie

.

Continue reading this post »

On Saturday night, there was a game that slipped many people's attention, but may have a profound effect on the Timberwolves future.  Milwaukee beat Charlotte 93-88, and it reduced the Bobcats lead for making the Eastern Conference play-off race to a single game.

Eastern Conference Standings  February 21, 2010

 1.  Cleveland 43-14
 2.  Orlando 38-19
 3.  Boston 35-19  
 4.  Atlanta 34-20 
 5.  Toronto 31-24
 6.  Chicago 29-26
 7.  Miami 29-28
 8.  Charlotte 27-27

 9.  Milwaukee 26-28
10.  Philadelphia 21-34
11.  Detroit 20-35 
12.  Washington 19-34
13.  New York 19-35
14.  Indiana 19-36
15.  New Jersey 5-51

At this point, it looks like four teams will be competing for five play-off spots, and with this win, Milwaukee closes to within one game of the final spot.  The borderline play-off teams in the Western conference have better records, and it looks like whichever team Eastern Conference team misses the play-offs will end up with a lottery pick at #11 or #12.  If that team ends up being the Bobcats, their pick will be protected this year, and be deferred to the future.

Charlotte Pick protections:

2010: Top 12 protected
2011: Top 10 protected
2012: Top 8 protected
2013: Top 3 protected
2014: Unprotected

Is it likely we get the pick next year?  Would it be better if it was delayed?  You be the judge.

Continue reading this post »

The trade deadline has passed, and we have a better look at where our picks will land, so I thought it was time to revisit our summer cap space numbers.

$13,000,000 Al Jefferson
$3,964,320 Ramon Sessions
$3,638,280 Kevin Love
$3,192,000 Jonny Flynn
$3,703,472 Corey Brewer
$2,333,333 Ryan Hollins
$1,078,800 Wayne Ellington
$1,000,000 (Ryan Gomes)

$2,812,200 Rights to Ricky Rubio

$3,336,800  MIN 2010 1st (currently #2)
$1,328,400  CHA 2010 1st  (currently #15)  ($0 if #12 or higher)
$933,500  UTA 2010 1st (currently #25)  ($0 if #15 or higher)

$473,604 Minimum Roster Holds

$40,794,710 ... Total

$12,805,290 ... Expected 2010 Cap Space 

However, there's some variability that could alter that number between now and then

Continue reading this post »

Last week, I discussed the financial implications of trading our financial flexibility in a deadline deal.  If we wait until this summer, there has already been plenty of discussion on free agents we should target.  However, if the best free agents sign with other teams, are we forced to overpay one of the remainders to save the summer?  Fortunately, a third alternative remains, and its one that could be very lucrative -- "trading" our cap space.

How does this work?

Why would it be effective now?

Who would our best trade partners be? 

Read on to learn more.

Continue reading this post »

The February 19th NBA Trade Deadline has the potential to be one of the biggest in recent memory.  A sluggish economy has hurt the value of many franchises, their earnings, and the overall wealth of many owners.  Fourteen teams still remain over the luxury threshold.  The looming threat of work stoppage grows as a new Collective Bargaining Agreement must be reached in 2011.  There are several teams that are geared to win-now, and many others that need to regroup.  We may see major changes over the next month.

However, Timberwolves fans may wonder whether their team should get involved in a deal right now, or wait until this summer, when they carry a very valuable trade commodity with their raw cap space.  Let's take a look at the two major options

Continue reading this post »

Pau Gasol three-year extension through 2014, at an average of $19 million a year, should worry all NBA fans.  At his press conference, Gasol mentioned several reasons why a player would like coming to Los Angeles, like less cultural differences, its an international city, there's a lot going on, and the weather is nicer, especially after the cold east coast road trip.  But he left out the biggest reason -- you can get paid.

Maybe the first question NBA fans should ask would be "How big is $19 million?"  It's big, even compared to other giant NBA salaries.  Next season, $19 million would be a Top Five salary in the NBA -- and while Gasol is very good, he is not a Top Five player.  Also, while those five deals are often the high end of older NBA contracts, Gasol's extension averages that much, and its locked in until 2014.

But if $19 million/year is a lot, remember this -- it will cost the Lakers $38 million with luxury tax penalties!  This astronomical sum would quickly bankrupt many franchises who are just trying to keep their head above water in tough economic times.  The fact that the Lakers can afford it, and still have money left over, should be of concern to fans that want a competitive NBA, particularly the Chairman of the NBA's Board of Governors, Glen Taylor.

Continue reading this post »

Over the last ten years during the Kevin Garnett era, the national media continually branded the Timberwolves as a small-market team, and frequently opined to their big-market readers that the Wolves would send KG to their team for pennies on the dollar, since MIN really needed those pennies. 

Fortunately, Minnesota fans have dismissed this idea for several reasons.  Minnesota is hardly a small media market.  A quick look at the US TV Household Ranks puts us at #13 among 30 NBA cities.  While three teams are significantly bigger (2x CHI, 3x LA, 4x NYK), there are several teams that are far smaller.  Memphis, Oklahoma City and New Orleans are only about a third our size.  The Twin Cities are affluent, so their are plenty of potential customers.

However, the Timberwolves have little market penetration, and are one of the lowest revenue teams in the entire NBA.

Continue reading this post »

Before December 15th opens the door for many players on new teams to be traded, I wanted to take a minute to talk a little bit more about the luxury tax.  With the rapid rise in the tax, we may see great value in Minnesota's financial flexibility both for this year and for the next. A more thorough review may help us understand some moves we may see from the Timberwolves front office.

This year there has been a dramatic increase in the size of the lux share over the previous four years.  Let's take a look why:

Continue reading this post »

After last night's narrow loss increased our chances for keeping the future pick we owe the Clippers, I thought this would be a good time to review the Collective Bargaining Agreement's rules on picks.  There are a lot of myths and misconceptions out there, and since picks will be an important part of Minnesota's future, it'd be worth a look.

Imagine being so bad an owner, that the NBA actually creates a rule to stop others from doing something so inept!  The so-called "Ted Stepien Rule" arose after the owner of the 80-83 Cavaliers traded away several years worth of first round picks in bad trades, leaving fans with a team with no talent and no hope for the future.  The rule prohibits teams from trading away future picks so that they may get no first round pick for two consecutive years.

This has been a source of confusion, so let me debunk some myths:

1.  This rule only applies to future picks.  Once a team drafts a player, they can still trade the player's rights.

2.  The rule doesn't say you're required to retain one of your future picks.

Let's look at the Wolves situation, where they owe a Top 10 protected 1st to LAC.  Even if they get to retain their 2010 pick, they can't trade it right now because they may have to give LAC their pick in 2011.  However, there are ways to solve the problem if MIN wanted to trade the pick.  To get past #1, they could simply draft the player, and trade his rights to another team.  If Rule #2 was a problem, they may be able to trade their pick if they were keeping the CHA or UTA pick instead, or they could even try to buy a late pick from a championship team.

See if you know these ten other facts about picks

Continue reading this post »

  Money Talks  with shrink

First, would Rudy Gay's qualifying offer carry over to us if we were to trade for him midseason?

Second, if so, would that technically count him as a member of our team over the summer, meaning we could use our cap space to sign a free agent, THEN sign Gay afterwords because we can go over the salary cap to resign our own players?

Brian

Hey Brian!  I share your interest in Rudy Gay, particularly after he and Memphis were unable to come to an agreement on a contract extension a few weeks ago.  While I am concerned about a number of his statistics, I suspect his situation in Memphis leaves him unhappy and artificially lowers his production.  If he reaches free agency, these concerns may push other teams to gamble longterm money on more reliable free agents ahead of Gay, and I suspect that a lot of the NBA's cap space will be gone by the time Gay gets a contract.  With less buyers, I think his final contract may be less than we expect, and his physical tools give him the uncommon opportunity to sign a fairly large free agent deal, and still get upside on that money.  There are a lot of scenarios for Rudy Gay, and he's an interesting player to follow.

Continue reading this post »

   Money Talks with shrink

While Minnesota fans keep an eye squarely on the 2010 Salary Cap, many teams are more concerned with the 2009 Luxury Threshold.  The lux has served as an effective mechanism for maintaining competitive balance in the superstar-driven NBA without instituting a hard cap that the Players Association would detest.  Big market teams can still spend over the luxury threshold, but the incremental costs become so expensive that in the last four years, between 22-25 teams have all finished the season below the threshold.  Let's take a look at the mechanics of the lux to determine why.

There are two parts to the luxury threshold, and the first is pretty straight forward.  For every dollar your team's total payroll is over the threshold, you pay an additional dollar into an NBA's escrow fund.

Houston is a team that is just over the luxury threshold, so they feel different economic constraints than other teams.  For example, last Friday, they waived forward Pops Mensah-Bonsu.  Pops was making $825,497, which is probably a fair salary.  However if he was on the roster on the final day of the season, Houston would be effectively be paying him twice that, $825,497 for salary plus $825,497 in luxury tax.  At 3.3 minutes/game, they decided he wasn't worth the $1.65 mil and the roster spot.  Pops had $50,000 guaranteed, and since they were over the lux, they decided paying him that money (again, doubled if they remain over the lux) was a better economic decision than retaining him.

The second component to the NBA's luxury tax rules deals with what to do with the luxury dollars the NBA collects.  This rule simply states that every team that is under the lux gets a 1/30th share of all the escrow fund.  David Stern and the NBA keep all the shares that aren't collected by teams over the lux for operating expenses.  Again, for a team like Houston, if they can drop a small amount of salary (which is already doubled), they will also get a bonus for reclaiming their lux share, which could be significant.  Strangely, this year, almost half the league is currently over the lux ..

Continue reading this post »

  Money Talks with shrink

Summer 2010.  Wolves fans have waited many years and seen many trades accumulating cap space looking forward to this summer.  In eight months, they will finally see whether their team can use this space for a top free agent, or trade it for another valuable star.  The talent pool is deep.  A declining NBA economy will lower both the salary cap and the luxury threshold, making their cap space more valuable than in previous years.  Wolves fans have been watching the finances of other teams more closely than ever, to see which ones are also below the cap, and can compete with them for free agents.  Surprisingly, a team well over the lux may be one of the stiffest competitors.

Erick Dampier may determine an NBA Championship.

More precisely, Eric Dampier's unusual contract may set the stage for the Dallas Mavericks to bring in an elite player that could give them enough talent to be win the league.  Here's how it works.

The expensive final season of Dampier's contract is only guaranteed if he meets certain performance standards, which isn't going to happen.  This summer, his $13 mil contract would become a valuable trade chip for a team wishing to cut salary, and with a little incentive, it might land them an elite free agent.  Dallasbasketball.com dubbed this the DUST chip, the Dampier Ultimate Sign-and-Trade.  Once they play this chip, its gone like dust.  Let me give you an example of how this works:

Continue reading this post »

  Money Talks  with shrink

Hey guys, its good to be here!  I wanted to thank the Canis Hoopus guys for the chance to be a part of their website, and you guys for being faithful readers. 

I will be running a regular feature called "Money Talks Mailbag" where I will try to answer your questions about finances and the Collective Bargaining Agreement.  These issues drive NBA front offices, and I hope I can give you a little different perspective on the game.  You can email me at  nba_economist@yahoo.com with your questions, and they may appear in an upcoming article!

Mail Bag #1

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  Money Talks with shrink

As Wolves fans cringe through losses like last night, they try to focus on the future, hoping the team is emulating the successful Blazer turn-around under Kevin Pritchard.  Can they?  A brief examination of the Trailblazers recent history is in order.

Just five years ago, the once proud tradition of the Trailblazers was a mess, with a financial situation that was worse than the Timberwolves ever were.  In 2004-05, they had the third highest payroll in the NBA, with four players (Theo Ratliff, Damon Stoudamire, Nick Van Exel, and Shareef Abdur-Rahim) all making over $10 mil a year, and a new contract headed to Zach Randolph for $10+ as well.  Their record?  27-55.

The Blazers brought in Kevin Pritchard in 2004 to be Director of Player Personnel, but under GM John Nash, the Trailblazers got worse.  By 2006, the Blazers had the worst record in the NBA (21-61), Nash was fired, and Pritchard was given the GM job.  While Nash was more of a traditional GM, Pritchard was new school.  He worked heavily with scouting and player development, and relied deeply on statistical analysis.  Pritchard quickly made several draft picks and trades to acquire top young talent that has now positioned the Trailblazers as a young contender that may be destined for great things.

Can the Wolves emulate this?

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