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Riverwalkman
08-04-2009, 04:00 AM
http://www.nba.com/2009/news/features/david_aldridge/08/04/aldridge.labor/

Tiltle: Several issues will come to head during the NBA labor talks

Author: David Aldridge, TNT Analyst

I picked part of the article relevant to Spurs. And I think the whole article is worth reading.


Take San Antonio, whose owner, Peter Holt, is chair of the league's negotiating committee with the players.

San Antonio is one of the league's smallest television markets (26th among U.S. NBA teams in television market as of Jan. 1, 2008, according to Nielsen's "people meter" data), but it's ninth-largest in population according to 2007 estimates, and houses the corporate headquarters of five Fortune 500 companies, including four in the top 176. Holt has never been a big spender; even through the Spurs' era of four championships in nine seasons, Tim Duncan was the only player who received anything close to a max contract.

Yet this summer, Holt okayed the acqusition of Richard Jefferson from Milwaukee, a transaction that will cost Holt $29 million more than if he had kept the expiring contracts of Bruce Bowen, Kurt Thomas and Fabricio Oberto, with Jefferson due $14.2 million this coming season and $15 million in 2010-11. He spent the full mid-level exception on free agent Antonio McDyess, for three years and $15 million in guaranteed money. He coughed up another $1.3 million for center Theo Ratliff. Add in the salaries for rookies DeJuan Blair and Jack McClinton, and the Spurs' payroll for next season will be right around $80 million, which means Holt is on the hook for at least another $10 million in luxury tax payments if the current projected $69.9 million threshhold for next year is accurate.

Holt says there is a method to his seeming madness. Basically, the Spurs are loading up for two years--which coincides with all but the final year of Tim Duncan's contract. By 2011-12, the Spurs will have just two players under contract--Duncan and McDyess, and McDyess's deal is only partially guaranteed. San Antonio's time among the league's top spenders has an expiration date.

"In our case, lots of things over the years played out," Holt said in Las Vegas, when he was named chair of the committee. "I get credit, R.C. (Buford, the general manager), Pop (Gregg Popovich, the head coach). But we lucked out on some deals, to be blunt with you. Then, we have an ownership group that's strong. No money has come out of that business, ever, or at least since 1993. So the debt on the Spurs is way down. And so we, as owners, have decided to give us a transition period, are willing to take some hits. But the main reason is that because we have such little debt on the business...it gives you opportunties that in the past, we didn't have to take advantage of."

But Holt is not the only owner taking on short-term pain for a chance at a championship.

raspsa
08-04-2009, 05:21 AM
Thanks Holt for opening your wallet this off-season. Timmy has been all about winning and teamwork his entire carreer and you honor him by ensuring that he remains in serious contention for another championship or two in his remaining years as a Spur. The ride isn't over yet so let's all enjoy it while it lasts.

boutons_deux
08-04-2009, 05:47 AM
The ownership paying the luxury tax is the ownership paying tribute to Tim and Pop.

sonic21
08-04-2009, 05:52 AM
well being cheap all these years, he did save some money.

:stirpot:

RuffnReadyOzStyle
08-04-2009, 05:59 AM
The ownership paying the luxury tax is the ownership paying tribute to Tim and Pop.

Spot on. You don't skimp on the last few years in the careers of two HoFers, and the Spurs' ownership is classy enough to pay respect to that idea and fork over the cash. :toast

wildbill2u
08-04-2009, 07:46 AM
Not tomention that perhaps one reason they are in such a good financial position is that they have been COLLECTING money every year from teams that had to pay the luxury tax.

I think they got over $3 million last year alone. So a teaspoon of sugar helps the medicine go down.

Still, they could have stood pat and saved the money. Some owners would. Good vibes for job well done.

Muser
08-04-2009, 07:51 AM
I'm happy the Spurs are spending money to try and get Duncan more rings before he retires, honestly I think they should've a few years back, i'm not holding anything against them but it's not every decade you get one of the greatest players to ever play.

Bender
08-04-2009, 08:10 AM
do we have any players we can dump to cut down on the lux tax?

bigfan
08-04-2009, 09:34 AM
The ownership was smart enough to recognize the chance of the Spurs getting another player the calibre of Tim after he retires is pretty damn low so better to go out with a bang for the next couple of years. After Tim is gone the Spurs go into the long drawn-out rebuilding mode.

SenorSpur
08-04-2009, 09:54 AM
Many of us, myself included, have been critical of Holt and the ownership for being tight-asses - and deservedly so - in some situations. However, I got to give him and the group a big :tu for identifying a vision for the next 2 years and taking the financial risk neccessary to improve the roster - at any cost. This will be a short run, and I believe TD, Manu, TP and Pop all deserve the opportunity to grasp that brass ring one more time - maybe two?

The drive for five is real. :flag:

CGD
08-04-2009, 10:07 AM
It's not so much that Holt was "cheap," rather steadfast in keeping a favorable debt to equity ratio on his business. Holt seems to suggest that what ever profits the Spurs did make since 1993 got reinvested into the business, thereby allowing the organization to finance projects/expenditures mainly with cash and as opposed to debt.

The beauty then is that when it comes time borrow (presumably this year), the team's history of having low outstanding debt allows Holt to seek (and get) credits at VERY favorable rates.

YoMamaIsCallin
08-04-2009, 10:24 AM
Two observations:

1) No one spends tens of millions of dollars because they "owe a debt of gratitude". This was a business decision, no doubt. They decided to invest, with an expectation of returns in the future.

I think it was a strategic decision. Do you maintain your status as one of the handful of elite teams in the NBA who contend for the championship? Or do you become one of those teams (*coff* Suns *coff*) who don't expect to win, but try to make money? I think the Spurs got a wakeup call in the 2009 playoffs and realized they had to fish or cut bait -- either get stronger, or give it up. And, once you fall from the elite list, it's really hard to get back.

The players and coaches know who's trying to win and who's not. Once you get on the "not trying to win" list, that drives player and coach attitudes, expectations, and also their decisions about which team they want to be with. So it's a bit of a downward spiral.

2) There's also a short-term business reason for this investment. Team owners make a big part of their money in the playoffs. By being dumped with only 3 home games, the Spurs did not make much money. I'm sure they looked at the revenue/profit they could have gotten by going up to 12 home games (WC finals) or even up to 16 (NBA finals) and realized they were leaving a lot of money on the table by not being stronger.

dbestpro
08-04-2009, 10:38 AM
Two observations:

1) No one spends tens of millions of dollars because they "owe a debt of gratitude". This was a business decision, no doubt. They decided to invest, with an expectation of returns in the future.

I agree. I believe the loss revenue from a first round exit also helped weight the decision towards greater investment.
The front office was not use to this type of loss.

buttsR4rebounding
08-04-2009, 10:46 AM
Not to open an old wound, but I do recall that the trade that sent Scola to Houston ended up netting the Spurs somewhere around $11 million in savings and luxury tax payments. It was that kind of thought process that allowed them to do what they are doing today.

Fabbs
08-04-2009, 10:51 AM
Dime late and dollar short.
Glad they are making an effort with Jefferson, but Scola was the real deal to reward Tim Dunks and co. and repeat, do 3 of 4, maybe 4 of 6.

ohmwrecker
08-04-2009, 12:51 PM
Hmm . . . would you trade Jefferson, McDyess & Blair for Scola? I wouldn't.