NBA

NBA PM: Defending a Title Isn’t Easy

Repeating as champions in pro sports is not easy, it may be even harder for the Spurs… Old School vs. New School… Steve Ballmer’s tax break?

Steve Kyler profile picture
Updated 12 months ago on
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Rings Make You A Target:  There is a reason that sports teams rarely repeat as champions. It’s hard to keep all the little motivations and situations that converge to create success all together after you have won. Contracts come into play. Roles get redefined. Players get older. It’s not easy to repeat in sports.

The San Antonio Spurs open their regular season on Tuesday with their 2014 NBA championship ring ceremony, and while they have long been the gold standard other teams strive to emulate, this year they also open the season as the hunted since they’re the reigning champs.

As much as the Spurs tried to keep things the same – returning virtually everyone from last season’s team – the preseason hasn’t reflected the continuity and momentum the team had hoped for.

“We haven’t played well,” Spurs big man Tim Duncan said after his team’s final preseason game. “It’s the preseason so we hopefully chalk it up to that, and hopefully we can focus a little better, execute a little better and put a little better performance going into the start of the season. We have a lot of things to work on, a lot of injuries to overcome. Once that ball goes up, we’ll start rolling and we’ll see what happens.”

The Spurs as a team tend not to over-analyze things and try to keep things in perspective. Despite their ho-hum preseason, the Spurs understand what the preseason is.

“We’re trying to get better,” Spurs guard Danny Green said. “We’re trying to do it faster. We don’t have any more time left, so we want to get this thing rolling. Get the chemistry back in order to where it needs to be, so that we have a chance come Tuesday. Every team now is going to be coming for us.

“We’ve never taken the preseason as if it was the playoffs. We just use it as an opportunity. We know it’s a glorified scrimmage, and the outcome is not what we’re worried about. Obviously we’re worried about that during the regular season and the playoffs, but the preseason we’re not worried about the result. We’re just trying to execute and get better.”

As the hunted this season, most of the roster understands that there will be more scrutiny and more expectations.

“Everybody can speculate and write articles, and worry about what’s going to happen,” Duncan said. “But it doesn’t happen until it happens. We’ll be there. We have competitors on this team. We have guys that know how to win, want to win, and hopefully that will play and factor into it until we can be whole as a team, and then we’ll go from there.”

On Tuesday, the Spurs will get the reward for their season last year in the form of their championship rings and the chance to see a championship banner raised in front of their home crowd. However, that was last year’s prize. This year starts fresh.

“First one’s Tuesday and hopefully everyone comes out and brings the juice,” Green said.

There is no doubting that the Spurs will open the season with a lot of emotion and energy, which can be a distraction.

“I think we need to use it to get everybody intense, in tune, focused, playing good hard basketball and competing,” Green said. “We can use that emotion right now to get us back to where we need to be.”

While Tuesday will open the Spurs’ chance to defend their title, it’s simply the first game of a very long 82-game season.

“We’ll show for the first game,” Duncan said. “We’ll figure it out, and we’ll have 81 after that.”

The Spurs will keep things simple. They are returning the entire team that got it done last season. The question is, are the Spurs a team that can repeat as champions? It’s not easy the first time, and it only gets harder the second time around.

Few teams in sports repeat; the Spurs’ attempt will begin tomorrow.

Old School Vs. New School:  When you walk into the Houston Rockets’ home locker room, Steve_1087it’s easy to see what the organization is about. A huge 100-plus foot multi-screen display hangs in the front of the room with several smaller computer windows in each corner running the opposition’s plays. Imagine the biggest sports-bar-type display you can envision with games and images running all over the place.

Above the players’ lockers is a ring of LCD screens, much like you’d expect around the edges of the arena. Steve_1086There is content programmed to run on these screens, like you’d see on television during introductions, featuring their names, key stats and images of who they are. The content later flashes to four decades of Rockets’ greats – flashing images of Hakeem Olajuwon, Clyde Drexler and Yao Ming and then to a sea of advanced stats like Offensive Efficiency rankings and Defensive Efficiency rankings.

No expense was spared. No technology was left untapped. It is visually stimulating, impressive to look at and overkill in every way imaginable.

A couple hundred feet down the hallway sat the San Antonio Spurs, a model team in their own way, the team that most organizations aspire to be like. While they were the road team, the contrast between the Rockets’ technological overkill and the Spurs’ simplistic white board said everything you need to know.

The Spurs had two words written with a dry erase marker – “Compete” and “Execute.”

In the age of advanced stats, coaching tools and technology, it’s easy to get lost in the by-products of the game. It’s easy to outsmart yourself. In the end all the tools and stats still come down to one thing: competing and executing.

It really couldn’t have been simpler to see, unless you put it on a 100 foot multi-screen display.

The Sweetheart Deal?:  No matter how you try to rationalize it, Steve Ballmer’s $2 billion purchase of the Los Angeles Clippers was a monster price tag – even for a guy said to be worth more than $22 billion. The Clippers’ price reflected a couple of unique circumstances – the biggest being a sealed one-time bid process and the next biggest being the desire for a fast closing. Both put Ballmer in a position to land the team with a hefty cash bid. He ultimately won out and is now the owner of the team, but according to Arash Massoudi and Alan Livsey of The Financial Times, he could get a sizable tax break on the purchase.

Under an exception in US law, buyers of sports franchises can use an accounting treatment known as goodwill against their other taxable income. This feature is commonly used by tax specialists to structure deals for sports teams. Goodwill is the difference between the purchase price of an asset and the actual cash and other fixed assets belonging to the team.

In this case, Mr Ballmer can spread the goodwill over 15 years and reduce his tax liability on his other income by a certain amount for each of those years.

Using a conservative model that assumes Mr Ballmer could account for $1.5bn in goodwill and a re-investment rate of 7 per cent, the potential tax credits equate to about $1bn in current terms.

For someone like Ballmer, tax credits are huge, and while it’s unclear exactly how much of the purchase price is eligible for “goodwill” status, it does look Ballmer may get some tax relief on some of the money he paid in.

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Steve Kyler is the Editor and Publisher of Basketball Insiders and has covered the NBA and basketball for the last 17 seasons.

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