The Larry Bird Exception

by Sam on Jun.02, 2010, under ALL, NBA

Why should Lebron, D-Wade, or Chris Bosh re-sign with their current teams thisВ off-season?Larry Bird has something to do with it. The Larry Bird Exception allows for teams that are resigning their own players who have been under contract for 3 years or more special benefits. В The name comes from when Larry Bird was allowed special terms to his deal by the NBA so that the Celtics could resign him although they were over the salary cap.

One of these benefits is an extra 3.5% in raises they can receive each season comparedВ to signing with another team. В A second benefit is being able to sign a 6 year contract with your current team compared toВ 5 with another team. В The final year is the most lucrative allowed by salaryВ cap rules.

Year Sign w/ Cavs W/ New Team
1 $16.38M $16.38M
2 $18.10M $17.69M
3 $20.00M $19.10M
4 $22.10M $20.63M
5 $24.42M $22.28M
6 $26.86M N/A
Total $127.86M $96.2M

By signing with a new team, LBJ is passing up on over $31 million inВ guaranteed money.В  He could get hurt a la Tracy McGrady or Grant Hill andВ never see that $31 million.В  Thats a risk he would take by signing withВ another team.В  Also, don’t forget that the collective bargainingВ agreement will expire soon, and there is no telling what the max salaries willВ be in the future, particularly if the owners have their way as they claim they are “losing $400 million a year”.

However, if Cleveland would do a sign-and-trade with Lebron, he can carryВ his Bird-rights through the trade.В  Then he will be able to leave as wellВ as get his max compensation allowed.

Interesting point to wonder is that if there were no salary cap in place, andВ the NBA was a completely free market, how much would Lebron James be able toВ make?В  $50 million per year? В Would he get an Alex Rodriguez type $250 million contract?

Sound off inВ the comments.В  Would love to hear what you think!

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Red Bull Signs Rajon Rondo

by Shayan Mondegari on Jun.01, 2010, under ALL, NBA

Red Bull, the most popular energy drink in the world according to market share, has officially just signed NBA All-Star Boston Celtics point guard Rajon Rondo. The 4th year point guard out of the University of Kentucky, has been averaging an impressive 2010 playoff average of 16.7 PPG, 5.3 RPG, and 10 APG.

The signing of Rajon Rondo couldn’t have come at a better time. The growing popularity of the point guard has been on the rise as he is entering the 2010 NBA Finals this Thursday June 3, 2010.В  In addition, last week, Rondo made the cover of Sports Illustrated and his Facebook fan page has nearly 200,000 followers.

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Selling Real Estate & Closing Out A Team in the Playoffs

by SportsBiz on May.30, 2010, under ALL, NBA

What do they have in common you ask?

Well, I just found out that Phil Jackson has been playing this video for his teams since 1992 before games where his teams can close out the series by winning games.



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Boston Celtics’ Kevin Garnett signs with Chinese Footwear Brand

by Shayan Mondegari on May.27, 2010, under ALL, NBA

If you haven’t heard of ANTA, you’re not alone!В  Many people had no idea of the footwear company until ANTA starting making headlines contracting Houston Rockets power forward Luis Scola to a footwear deal.В В  Recently though, Boston Celtics power forward Kevin Garnett also made the switch to the new shoe company.В  The 13- time NBA All Star has opted out of his ‘lifetime endorsement deal’ he had made with adidas in 2003, to the Chinese brand ANTA.

Garnett will be joining the likes of Steve Francis, Shane Battier, then Jason Kidd, Ron Artest, Baron Davis, and Luis Scola by willing to sign with foreign-based footwear brands.В  With Li-Ning, Peak and now ANTA, footwear branding has become bigger than just adidas, Nike, and Reebok.В  Whatever happens, we wish KG the best with his new contract and in the 2010 NBA Playoffs.

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Lakers Profitability… Losing Million$?

by Sam on May.27, 2010, under ALL, NBA

The Lakers will be profitable as long as Kobe gets what he wants

How profitable are the Lakers? How close were they to losing millions of dollars this season?

It cannot be confirmed, but with some basic accounting, you can figure it out.

According to Forbes, in 2008 where the Lakers made the finals, they had the following financial stats:

Revenue В В В В В В В В В  В В В В В В В В В В В  $191 mil
Operating Inc. В  В  В  В  В  В $47.9 mil
Player Expenses В  В  В  В $77 mil
Gate Receipts В  В  В  В  В  В  В $82 mil

These statistics included the playoffs from that year, which they made it to the finals and lost to the Celtics in 6 games.В  They played 11 home playoff games that year (2 vs. Denver, 3 vs. Utah, 3 vs. San Antonio and 3 vs. Boston).

With 41 regular season home games and 11 playoff home games, that makes a total of 52 games total.В  Revenue per game calculates out at $3.67 million and operating income per game comes out to $0.92 million.

This year the team had player salaries totaling over $93 million.  With the luxury tax set at 72 million, that essentially becomes an extra $21 million in salary totaling to $114 million for players salaries.  That’s $37 million more than in 2008!

If the Lakers lost to the Oklahoma City Thunder in the first round in the 7th game, they would have played 4 home playoff games, totaling 45 games for the season.  Assuming that they made 5% more revenue per game in 2010 compared to 2008, the total revenue would be $173 million.  That’s $18 million less than in 2008!

The net loss in income due to lost revenue and increased player salaries would be $55 million! The Lakers would have lost over $7 million this year had they lost to the Thunder this year.  It probably would be more in reality because I’m sure that the Lakers make more money for games played in the finals than they do for regular season games.  But based on the assumptions made, we considered all games as equally profitable.

Looks like the gambler in Jerry Buss comes out with his basketball team as it does with his poker game.  But if I were in his shoes I would take a chance to try and make $40 million and a championship with the downside being to lose $7 million.  Wouldn’t you?

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