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Rule #1

Pacers Digest is intended to be a place to discuss basketball without having to deal with the kinds of behaviors or attitudes that distract people from sticking with the discussion of the topics at hand. These unwanted distractions can come in many forms, and admittedly it can sometimes be tricky to pin down each and every kind that can rear its ugly head, but we feel that the following examples and explanations cover at least a good portion of that ground and should at least give people a pretty good idea of the kinds of things we actively discourage:

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Now, does the above cover absolutely every single kind of distraction that is unwanted? Probably not, but you should by now have a good idea of the general types of things we will be discouraging. The above examples are meant to give you a good feel for / idea of what we're looking for. If something new or different than the above happens to come along and results in the same problem (that being, any other attitude or behavior that ultimately distracts from actually just discussing the topic at hand, or that is otherwise disrespectful to other posters), we can and we will take action to curb this as well, so please don't take this to mean that if you managed to technically avoid saying something exactly like one of the above examples that you are then somehow off the hook.

That all having been said, our goal is to do so in a generally kind and respectful way, and that doesn't mean the moment we see something we don't like that somebody is going to be suspended or banned, either. It just means that at the very least we will probably say something about it, quite possibly snipping out the distracting parts of the post in question while leaving alone the parts that are actually just discussing the topics, and in the event of a repeating or excessive problem, then we will start issuing infractions to try to further discourage further repeat problems, and if it just never seems to improve, then finally suspensions or bans will come into play. We would prefer it never went that far, and most of the time for most of our posters, it won't ever have to.

A slip up every once and a while is pretty normal, but, again, when it becomes repetitive or excessive, something will be done. Something occasional is probably going to be let go (within reason), but when it starts to become habitual or otherwise a pattern, odds are very good that we will step in.

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In any case, quite frankly, the overall quality and health of the entire forum's community is more important than any one troublesome user will ever be, regardless of exactly how a problem is exhibiting itself, and if it comes down to us having to make a choice between you versus the greater health and happiness of the entire community, the community of this forum will win every time.

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All of the above is going to be subject to a case by case basis, but generally and broadly speaking, this should give everyone a pretty good idea of how things will typically / most often be handled.

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Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

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  • #16
    Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

    Originally posted by Pacer Fan View Post
    The RDA is proper, he is trying to put a spin on it as it's a bad thing. Players fall under this depreciation. Humans/players are like cattle. Hell James Posey, Rashard Lewis, J. Oneal are prime example and there are a ton of players that would fit the RDA. Props for Veeck!!
    If you are buying the team then the players are assets that contribute to the value of the team. The same team without leBron will cost less to a buyer.
    Last edited by speakout4; 06-30-2011, 06:23 PM.

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    • #17
      Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

      This is interesting, but the players are going to lose this go around and in the process they may lose a year of income as well. If the players get what they want the price of tickets and anything else related to basketball will go up (again). The fans will pay for it in the end. The average salary for an NBA player is 5 million per. I make $50,000. You do the math. The players should wise up and give back a little or no one will be able to afford to watch them play.

      I rarely support owners. I agree that they confuse reality and bend the system to their advantage. But the players will eventually cave to some extent. If we want fairness and clarity we should insist the owners open their books for scrutiny and close unfair tax loopholes. But the players are doing just fine and will continue to do so no matter what agreement they sign.

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      • #18
        Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

        Originally posted by Since86 View Post
        How are you not losing money? Let's use your machinery example.

        Say we buy a $50,000 machine. The actual value of that machine is lower than $50,000, because the seller needs to make a profit, so the actual value is, say, $45,000. (obviously I'm being generous)

        So each year it depreciates $5,000, and let's say it bottoms out at $5,000 just due to pure scrap value.

        You started off with $50,000, and traded that for a machine worth $45,000. Now it's worth $5,000.

        You no longer have that $50,000 in cash, and you no longer have a machine worth that in value. You've still lost money. While it might be an accounting "trick" it's not making money magically disappear.

        You still don't have that money you started out with and you can't replace it.

        It's just like buying food. You buy $20 of food. When you eat it, you no longer have $20 of food. It's the same prinicple. Your net worth doesn't stay constant, it flucuates. You have to show your value in dollars. It's not like you've tucked away that $50,000 and could regain it by a simple sale.
        I am very weak in accounting so forgive me but doesnt that purchase of a 50,000 machine make you X amount of dollars?
        Sittin on top of the world!

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        • #19
          Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

          Originally posted by King Tuts Tomb View Post
          He's not saying the RDA is a bad thing, he's saying the refusal of the owners to tell the truth about their books, and in turn use that disinformation as a bargaining chip in labor negotiations, is a bad thing.
          But he is spinning it as it's a wrong thing to do and it's not. The Players are contracted and the owners have the right to exercise the RDA in legal tax law. The net profits should be after all losses including tax, not before. It is laughable to think that owners should not include an owners rights of loss torward their profit. This is not disinformation at all as long as the numbers are there correctly on a total profit/loss which they are. There is nothing hidden in any documentation I have read.
          Garbage players get 1st round picks, (WTF)! All of the NBA must hate the Pacers! LOL

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          • #20
            Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

            Originally posted by speakout4 View Post
            If you are buying the team then the players are assets that contribute to the value of the team. The same team without leBron will cost less to a buyer.
            Your quote has nothing to do with RDA in which I was speaking of from the article.
            Garbage players get 1st round picks, (WTF)! All of the NBA must hate the Pacers! LOL

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            • #21
              Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

              Originally posted by Pacer Fan View Post
              But he is spinning it as it's a wrong thing to do and it's not.
              I don't see anywhere in the article. He says:

              Every year, taxpayers hand the plutocrats who own sports franchises a fat pile of money for no other reason than that one of those plutocrats, many years ago, convinced the IRS that his franchise is basically a herd of cattle. Fort calls it "special-interest legislation." "It's not illegal," he says. "It's just weird."
              Is this not true?

              His main issue comes from the fact that they're using this (legal) exemption then lying about it.

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              • #22
                Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                Originally posted by 90'sNBARocked View Post
                I am very weak in accounting so forgive me but doesnt that purchase of a 50,000 machine make you X amount of dollars?
                Yes, but that doesn't change the loss on the investment into the machine. The machine and what it is used for are two different things. Even if you don't make any money with the machine the loss in the machines value still exists. Even if you don't use it at all, it still loses value. It's something that just factors into the cost of doing business.

                Originally posted by King Tuts Tomb View Post
                I don't see anywhere in the article. He says:



                Is this not true?

                His main issue comes from the fact that they're using this (legal) exemption then lying about it.
                It is but isn't his example of a "herd of cattle" both inflammatory by design and misguided?

                The "herd of cattle" is merely a product that has value on paper. As is an NBA player. But he uses that term so that you associate the NBA player with the cattle, and make owners look like cattle drivers. We would all be wise to distrust anyone who uses these strategies to make their point in journalism. There is no doubt that NBA players are not treated in any way, like cattle.

                Originally posted by King Tuts Tomb View Post
                From the article:

                "The underlying logic is specious at best. As Fort points out, a team's roster at any given moment isn't actually depreciating. While some players are fading with age, others are developing and improving. But the Nets don't have to pay more taxes when a player becomes more valuable. And in any case, the cost of depreciation is borne by the athletes themselves, when they pass their primes and lose their personal earning power."
                An athlete is looked at as a depreciating asset because he is aging. It's true that there is a progression during his career. But he can still only play so long. Just like cattle are only useful for a period of time. It's not an investment like a piece of property or even a machine that can be repaired. You can't refurbish cattle or a player and get more years out of them. With living things there is an hourglass constantly running on your investment and you don't know when it's due to run out, it could be tomorrow.

                If that makes any sense.
                Last edited by Taterhead; 06-30-2011, 09:01 PM.
                "Don't get caught watchin' the paint dry"

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                • #23
                  Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                  Originally posted by Pacer Fan View Post
                  But he is spinning it as it's a wrong thing to do and it's not. The Players are contracted and the owners have the right to exercise the RDA in legal tax law. The net profits should be after all losses including tax, not before. It is laughable to think that owners should not include an owners rights of loss torward their profit. This is not disinformation at all as long as the numbers are there correctly on a total profit/loss which they are. There is nothing hidden in any documentation I have read.
                  I'm sorry but anything where you claim a lose when there is no actual loss of money is shady at best, and in most cases down right wrong. Yes, over time an asset loses value, but you aren't losing money. Your assets are losing worth, but not money. The only way to do this in a way that is not shady is to take into account how much money the asset made you. Unless it was a bad investment in most cases it will end in a net profit not a net loss.

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                  • #24
                    Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                    Owner's should be more concerned with their cash flows instead of their net income.

                    As long as they are bringing in more cash than they spend each year, the owners should have nothing to ***** about.

                    A net loss by a team doesn't take a cent out of the owner's pockets if the causes of that loss are non cash items.

                    These teams do not have stock so earnings don't matter one bit. Who cares if net income is negative due to non-cash expenses?

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                    • #25
                      Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                      Wow, my brain hurts...

                      Comment


                      • #26
                        Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                        This logic is incredibly flawed. If owning an NBA franchise is so lucrative, why don't the players form their own leagues? If they lack the cash, I'm sure there are hundreds if not thousands of investers both individual and institutional investors who would line up for such a great ROI. But that's not what's happening.

                        I realize it's fashionable to hate on billionaire owners, but face it. The fact remains that NBA franchises are not what makes these guys rich. It's like owning a very big yacht. Lots of status and enjoyment. Not really a cash cow in most cases.
                        Last edited by BlueNGold; 06-30-2011, 10:26 PM.

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                        • #27
                          Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                          Are we sure the $25 million is a made up depreciation number? In the financial statement notes it says it's due to contract buyouts and player injury......

                          Edit:
                          http://sports.espn.go.com/nba/news/story?id=1630607


                          I'm thinking they did write somebody a big check.

                          Edit 2:

                          http://www.insidehoops.com/nbasalaries.shtml

                          2004-2005
                          Note: Dikembe Mutombo, between the Nets (buyout) and Rockets, makes around $18.8 million.

                          http://articles.chicagotribune.com/2...rbury-contract

                          The New Jersey Nets waived eight-time All-Star center Dikembe Mutombo on Tuesday after finalizing what is believed to be a $30 million contract buyout.
                          The New York Knicks are among the teams reportedly interested in Mutombo.
                          Mutombo, 37, played in only 24 games last season because of a wrist injury that required surgery in November. He did not return until late in the regular season, and he was unhappy sitting on the bench most of the playoffs.

                          Mutombo had two years left on a $37 million contract, a deal that made it nearly impossible for the Nets to trade him.

                          Nets salaries:
                          http://www.basketball-reference.com/teams/NJN/2004.html

                          I'm guessing the author of the article has something confused between the income statement and the quote the professor gave him about some sort of tax code.

                          Edit 3:

                          And if it's supposed to be some sort of recurring phantom depreciation number, why is it only $1.2 million in '05 and $662k in '06?

                          This article is garbage.


                          Last edited by MagicRat; 07-01-2011, 02:11 AM.
                          PSN: MRat731 XBL: MRat0731

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                          • #28
                            Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                            I like to think that I'm financially literate, but accounting makes my brain hurt. Hopefully some real accountants chime in, I think we have a few on the board...

                            In the mean time, there's CBA expert Larry Coon's take on the same documents. All other things being equal I think I trust Larry Coon more. Here's the article:

                            http://sports.espn.go.com/nba/column...ancials-110630

                            Larry Coon interprets the Nets' losses differently. He says they arise from accounting charges from the Nets purchase by Ratner (not from depreciation or RDA). Here's the relevant part:

                            The Nets were another weak franchise, which helps explain their upcoming move to Brooklyn. During the time period covered by these financial statements they were in the bottom half in attendance, had one of the league's highest payrolls, and were operating in a high-cost environment. Under these circumstances you would expect the team to lose a lot of money, and it did -- it claimed losses of $49 million in 2005 and $57.4 million in 2006.

                            But these statements also illustrate the accounting practices to which Hunter and the players association take issue. Brooklyn Basketball (the Nets' parent company) paid $361 million for the team. In order for the balance sheet to balance, it had to show assets in that amount. Some of these are real, physical assets; accounts receivable; and the like. Other parts are "intangible" assets, which represent the amount the buyer paid above the value of the tangible assets. These assets (but not the franchise itself) are amortized over their "useful lives," with a portion of their value (a total of $200 million for the Nets) counted as an operating expense each year. For the Nets this expense added up to $41.5 million in 2005 and $40.2 million in 2006.

                            In other words, $41.5 million of the Nets' $49 million operating loss in 2005, and $40.2 million of its $57.4 million in 2006, is there simply to make the books balance. It is part of the purchase price of the team, being expensed each year. This doesn't mean they cooked their books, or that they tried to pull a fast one on the players. It is part of the generally accepted accounting practice to transfer expenses from the acquisition to the profit and loss over a certain time period. However, it's an argument that doesn't hold water in a discussion with Hunter and the players association, who would claim that the Nets didn't really "lose" a combined $106.4 million in those two years, but rather that they lost $7.5 million and $17.2 million, respectively.
                            Again, I'm not an accountant. Take it for what's it worth.

                            The rest of the article is pretty informative too (and doesn't take sides). Worth a read, IMO.

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                            • #29
                              Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                              I think it should also be pointed out that the NBA owners have openned up ALL their books, because federal law requires them to do so when claiming a loss.

                              It's different in the NFL, they aren't showing their books, because they're not claiming that they're losing money.

                              I think it's pretty relevent that the owners obviously knew they were required to show everyone exactly how/when they're losing money, and that they wouldn't be doing "tricks" but rather following the norm. You can disagree with the "norm" but it is what it is, regardless of personal feelings towards it.
                              Just because you're offended, doesn't mean you're right.” ― Ricky Gervais.

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                              • #30
                                Re: Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss

                                Originally posted by trailrunner View Post
                                I rarely support owners. I agree that they confuse reality and bend the system to their advantage. But the players will eventually cave to some extent. If we want fairness and clarity we should insist the owners open their books for scrutiny and close unfair tax loopholes.
                                Just to clarify, the NBA owners have opened their books. They're inviting scrutiny far more than their NFL counterparts because one of their main bargaining chips is that, by any measure, most NBA teams are in the red.
                                "Reggie Miller is the hardest player to guard." --Kobe Bryant

                                "Playing Reggie Miller drives me nuts. It's like chicken-fighting with a woman." --Michael Jordan

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