[NetIncome]

All this talk about getting KG flies in the face of the reality. KG is making $18 million this year. By 2008-09, he will be making $24 million. That's a critical year for the Nets financially. It now appears that the Nets will still be in the Meadowlands. Ratner's people are admitting that at best, the new arena will be opening mid season. The Nets are still losing $20+ million a year, according to the most recent records filed by Forest City Enterprises, Ratner's parent corporation, and Ratner has just taken a $60 million loan to cover losses through 2007-08, according to the Star-Ledger There is little to indicate that with the Nets payroll, that they can make money by 2008-09. Moreover, with the arena still not complete that year, it will be crunchtime for Ratner. He will be paying out construction costs while at the same time getting no revenue from the arena.

Assuming the Nets would still trade Carter, but not Krstic, that means that in 2008-09, the Nets would have KG at $24 million; Jason Kidd at $21.3 million and RJ at $13.2 million. That's $58.5 million or about what the luxury tax threshhold will be. The Nets would have no room to sign Krstic, whose first big contract would start that year, or anyone else. No matter who the Nets signed, it would cost them double because of the luxury tax. Since Kidd, then 36, and KG, then 33, would be in the final year of their contracts in 2008-09, the Nets would be rebuilding in 2009-10, the first year of the new Brooklyn arena. Does anyone think that Ratner is going to let that happen?

The new CBA punishes teams with multiple big contracts and no team in the NBA at that point is going to have that many big contracts. Even if Shaq is still around and Wade maxes out, the Heat will be no where near that level.

I guess if the Nets were able to win a championship between now and then, the risk might be worth it, but otherwise, reality bites.

 

[ghoti]

I guess if the Nets were able to win a championship between now and then, the risk might be worth it, but otherwise, reality bites.

If the Nets won a championship, not much of what you say here would change.

My guess is that they wouldn't even sell out most home games at the Meadowlands the next season.

If the Nets got KG, they would have to trade either he or Kidd at some point for less than equal value. (Which I trust Thorn could do pretty well when the time came.)

However, if Ratner thinks the sales of PCLs and Luxury Boxes will be slow for the new arena, that might be the time he'll allow Thorn to go for broke. The promised revenue from those sales may offset the cost of the team (still just a part of a much larger financial picture for Ratner).

Those are not available now, however.

Ratner could still allow Thorn to try and win a championship this year for the prestige involved. It wouldn't do much damage to this year's bottom line.

We can also cross our fingers that Ratner has begun to care about basketball and wants to win because that's the point of having a team in the first place.

 

[NetIncome]

If the Nets won a championship, not much of what you say here would change.

My guess is that they wouldn't even sell out most home games at the Meadowlands the next season.

If the Nets got KG, they would have to trade either he or Kidd at some point for less than equal value. (Which I trust Thorn could do pretty well when the time came.)

However, if Ratner thinks the sales of PCLs and Luxury Boxes will be slow for the new arena, that might be the time he'll allow Thorn to go for broke. The promised revenue from those sales may offset the cost of the team (still just a part of a much larger financial picture for Ratner).

Those are not available now, however.

Ratner could still allow Thorn to try and win a championship this year for the prestige involved. It wouldn't do much damage to this year's bottom line.



We can also cross our fingers that Ratner has begun to care about basketball and wants to win because that's the point of having a team in the first place.

The bottom line for Ratner, I believe, is using the arena to attract two constituencies--sports fans and Brooklyn "nationalists" [and the choice of Frank Gehry as architect to attract other constituencies--the arts crowd for one] so his mini-city gets approval. The arena will cost a half billion, the rest of the project $3 billion. The Nets are a small but vital part of the plan. If the Nets succeed, it gets him good publicity for the move. Polls already show Brooklyn residents support the project by an overwhelming majority, mainly because of the prospect of bringing the Nets back to Brooklyn. But there is a limit as far as how much he can pay to keep the team going. This is a huge project--think Rockefeller Center, Madison Square Garden and half of Co-Op City--with huge risks.

If the overall plan keeps running into delays, it will stress his finances. The history of New York real estate is filled with big projects that bankrupted successful developers. Trump went down after his Upper West Side project had to be downsized and extended. Trump survived, but Olympia and York, once the biggest office building owner in the city, went belly up. And in the case of Ratner, unlike those two, he has stockholders.

I can't see the Wolves trading KG for the same reason. Without KG, that franchise is not worth anywhere near what it is today. We are talking about Minneapolis St. Paul. Trading KG would mean both a drop [at least short term] in revenue and in its overall value.

 

[Petey]

You are both also under the assumption Kidd will end his career as a Net, which is not 100%. Look at his salary there, there will be a point where he's simply not worth the money.

-Petey

 

[ghoti]

I can't see the Wolves trading KG for the same reason. Without KG, that franchise is not worth anywhere near what it is today. We are talking about Minneapolis St. Paul. Trading KG would mean both a drop [at least short term] in revenue and in its overall value.

I think that they won't have much of a choice soon.

If (when) he forces their hand, they could do worse than Vince Carter as far as maintaining revenue levels.

Even if it's not the smartest deal competitively for the Wolves, It might be the only one that addresses the short-term reality.

 

[ghoti]

You are both also under the assumption Kidd will end his career as a Net, which is not 100%. Look at his salary there, there will be a point where he's simply not worth the money.

-Petey

If the Nets got KG, they would have to trade either he or Kidd at some point for less than equal value. (Which I trust Thorn could do pretty well when the time came.)

The time you mention seems like it's coming sooner rather than later.

That's why the Nets have to win right now.

 

[NetIncome]

You are both also under the assumption Kidd will end his career as a Net, which is not 100%. Look at his salary there, there will be a point where he's simply not worth the money.

-Petey

That is a two edged sword...not worth the money to the Nets or not worth the money to someone else.

I see very little diminution of Kidd's skills and he has now played in 74 consecutive games since coming off knee surgery. He hasn't played in that many since 2002-03. Stockton started 442 straight games after his knee surgery and that surgery took place when he was 35.

 

[cpawfan]

Substitue Vince for KG and you still have the same financial questions. Granted Vince's contract ends before KG's does, but does anyone see him taking a pay cut to stay in NJ?

When you factor in Kidd's age, contract and the financial realities that Ratner is dealing with, the Nets should attempt to win now without thrashing the future. That is part of the reason Thorn drafted a wing player in the first round. Thorn has built a team with 2 now players (Kidd & Vince), 2 present and future players (RJ & Krstic) and a few future players (Wright, Zoran & Ilic).

Of the 2 now players, it is easier to trade Vince and get greater value for him than for Kidd at this time.

 

[Netted]

You are both also under the assumption Kidd will end his career as a Net, which is not 100%. Look at his salary there, there will be a point where he's simply not worth the money.

-Petey

Which will make him hard to move and keep him a Net.

 

[Petey]

Which will make him hard to move and keep him a Net.

Not true. Was Vince Carter worth the numbers he was putting up last year? And several teams made offers for him.

-Petey

 

[coolblue]

The bottom line for Ratner, I believe, is using the arena to attract two constituencies--sports fans and Brooklyn "nationalists" [and the choice of Frank Gehry as architect to attract other constituencies--the arts crowd for one] so his mini-city gets approval. The arena will cost a half billion, the rest of the project $3 billion. The Nets are a small but vital part of the plan. If the Nets succeed, it gets him good publicity for the move. Polls already show Brooklyn residents support the project by an overwhelming majority, mainly because of the prospect of bringing the Nets back to Brooklyn. But there is a limit as far as how much he can pay to keep the team going. This is a huge project--think Rockefeller Center, Madison Square Garden and half of Co-Op City--with huge risks.

If the overall plan keeps running into delays, it will stress his finances. The history of New York real estate is filled with big projects that bankrupted successful developers. Trump went down after his Upper West Side project had to be downsized and extended. Trump survived, but Olympia and York, once the biggest office building owner in the city, went belly up. And in the case of Ratner, unlike those two, he has stockholders.

I can't see the Wolves trading KG for the same reason. Without KG, that franchise is not worth anywhere near what it is today. We are talking about Minneapolis St. Paul. Trading KG would mean both a drop [at least short term] in revenue and in its overall value.

You need to take into consideration the size of this project to put these numbers in prospective.
As stated this is a 3.5 Billion dollar project that will make his investors even more. Even if Ratner spent and extra 200 million over the cap over the next 3 or 4 years. That is only 5% increase of the total project. This is not about the profitability of the Nets this is small change to these people. The only reason the the Nets are involved with this project is for public support. Ratner figured out ofter the public outcry of the initial fire sale of last year, that it is much easier to get support to bring in a winning team than a losing one. If ratner thinks bringing KG here and winning a championship will make the move that much easier. I dont think it will matter how much money is spent on the luxury tax they will make it happen. Bruce Ratner doesn't make his living on basketball. This is all about a Real estate deal nothing more.

 

[Netted]

Not true. Was Vince Carter worth the numbers he was putting up last year? And several teams made offers for him.

-Petey

At age 27? Absolutely. You could tell he was a super talent regardless of the stats.

If you are discussing moving Kidd this year or next year he could possibly be tradeable. Beyond that he will be 35 and making too much for a team to say he is worth it. Which is basically what you are saying. I'm agreeing. Why would a team trade for a player near the end of his career that makes more than he is worth?

 

[JCB]

don't move to brooklyn, don't have to pay money for new arena . .then, can we sign KG?

 

[rundmc00]

All this talk about getting KG flies in the face of the reality. KG is making $18 million this year. By 2008-09, he will be making $24 million. That's a critical year for the Nets financially. It now appears that the Nets will still be in the Meadowlands. Ratner's people are admitting that at best, the new arena will be opening mid season. The Nets are still losing $20+ million a year, according to the most recent records filed by Forest City Enterprises, Ratner's parent corporation, and Ratner has just taken a $60 million loan to cover losses through 2007-08, according to the Star-Ledger There is little to indicate that with the Nets payroll, that they can make money by 2008-09. Moreover, with the arena still not complete that year, it will be crunchtime for Ratner. He will be paying out construction costs while at the same time getting no revenue from the arena.

Assuming the Nets would still trade Carter, but not Krstic, that means that in 2008-09, the Nets would have KG at $24 million; Jason Kidd at $21.3 million and RJ at $13.2 million. That's $58.5 million or about what the luxury tax threshhold will be. The Nets would have no room to sign Krstic, whose first big contract would start that year, or anyone else. No matter who the Nets signed, it would cost them double because of the luxury tax. Since Kidd, then 36, and KG, then 33, would be in the final year of their contracts in 2008-09, the Nets would be rebuilding in 2009-10, the first year of the new Brooklyn arena. Does anyone think that Ratner is going to let that happen?

The new CBA punishes teams with multiple big contracts and no team in the NBA at that point is going to have that many big contracts. Even if Shaq is still around and Wade maxes out, the Heat will be no where near that level.

I guess if the Nets were able to win a championship between now and then, the risk might be worth it, but otherwise, reality bites.

Given the chance, Thorn would jump through fire for KG. Of that, I am sure. And Ratner would figure out a way to keep Kidd/RJ/KG/Krstic together.

 

[NetIncome]

Substitue Vince for KG and you still have the same financial questions. Granted Vince's contract ends before KG's does, but does anyone see him taking a pay cut to stay in NJ?

When you factor in Kidd's age, contract and the financial realities that Ratner is dealing with, the Nets should attempt to win now without thrashing the future. That is part of the reason Thorn drafted a wing player in the first round. Thorn has built a team with 2 now players (Kidd & Vince), 2 present and future players (RJ & Krstic) and a few future players (Wright, Zoran & Ilic).

Of the 2 now players, it is easier to trade Vince and get greater value for him than for Kidd at this time.

No you dont have the same financial problems. KG makes significantly more money than Carter. The difference this year is $4 million. In 2006-07, it's $5 million. In 2007-08, it's $6 million...if Carter doesnt exercise his player option. In 2008-09, its $22 million unless Carter resigns. I assume that in the summer of 2007, Carter will try to use his player option to get a contract extension. I have no idea how well he will be playing or what his market it. Nor do you. Nor do the Nets at this point. In any event, it would the Nets' decision to make. If the Nets trade VC for KG, the Nets are stuck with his contract no matter how he is playing or what his market is. Both the differential in contract amounts and the length of the contract are significant.

 

[NetIncome]

Given the chance, Thorn would jump through fire for KG. Of that, I am sure. And Ratner would figure out a way to keep Kidd/RJ/KG/Krstic together.

Yeah, sure. Whatever.

 

[rundmc00]

No you dont have the same financial problems. KG makes significantly more money than Carter. The difference this year is $4 million. In 2006-07, it's $5 million. In 2007-08, it's $6 million...if Carter doesnt exercise his player option. In 2008-09, its $22 million unless Carter resigns. I assume that in the summer of 2007, Carter will try to use his player option to get a contract extension. I have no idea how well he will be playing or what his market it. Nor do you. Nor do the Nets at this point. In any event, it would the Nets' decision to make. If the Nets trade VC for KG, the Nets are stuck with his contract no matter how he is playing or what his market is. Both the differential in contract amounts and the length of the contract are significant.

Since we are playing with numbers. What is the difference in revenue between a second round exit and an NBA champion??? What would it do for Ratner's project if the Nets were champs? How long has Rod been pursuing KG?

You can be sure Thorn would trade VC plus anything that excludes Kidd/RJ/Krstic for KG.

 

[NetIncome]

Since we are playing with numbers. What is the difference in revenue between a second round exit and an NBA champion??? What would it do for Ratner's project if the Nets were champs? How long has Rod been pursuing KG?

You can be sure Thorn would trade VC plus anything that excludes Kidd/RJ/Krstic for KG.

So its guaranteed. Oh good. Let's do it then.

 

[rundmc00]

Yeah, sure. Whatever.

The press reported this offseason that Thorn made the cursory calls regarding KG's availability. Much more credible than your financial analysis.

 

[NetIncome]

You need to take into consideration the size of this project to put these numbers in prospective.
As stated this is a 3.5 Billion dollar project that will make his investors even more. Even if Ratner spent and extra 200 million over the cap over the next 3 or 4 years. That is only 5% increase of the total project. This is not about the profitability of the Nets this is small change to these people. The only reason the the Nets are involved with this project is for public support. Ratner figured out ofter the public outcry of the initial fire sale of last year, that it is much easier to get support to bring in a winning team than a losing one. If ratner thinks bringing KG here and winning a championship will make the move that much easier. I dont think it will matter how much money is spent on the luxury tax they will make it happen. Bruce Ratner doesn't make his living on basketball. This is all about a Real estate deal nothing more.

Certainly, as noted, this is all about real estate. And you are correct about the losses being small compared to the overall size of the project. However, the Nets also dumped a small contract [Mercer's] at least in part to avoid the luxury tax. I dont believe that Ratner has gone hogass wild over the Nets. There is no indication of that. The transactions that started in July 2004 and continue through now have saved the Nets tens of millions of dollars. I believe that at some point, Ratner will face crunchtime on the project and, as noted, that could easily be 2008-09.