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Basketball news gathered from around the net.

Bid Book Reveals Severe Overpay For Clippers By Ballmer

Steve Ballmer severely overbid for the Los Angeles Clippers based on the expected 2014 revenues of the franchise.

Ballmer's $2 billion bid is 12.1 times the expected 2014 revenues.

The book, called "Project Claret" so as not to give away on the cover sheet that these numbers are indeed the financials of the Clippers, reveals that the team is projected to finish the year with $62.3 million in revenues from ticket sales, $25.8 million from its local cable contract and $24.1 million in additional team revenue. The Clippers are also projected to receive $52.7 million on the season in shared national league revenue, according to the document. After taking away player payroll costs, total operating revenue for the 2013-14 season is projected to be $100 million.

Valuation multiples are usually based on total revenues, so the $164.9 million before player costs are extracted equals more than 12 times less than the $2 billion sale price.

"No team in the history of sports has sold for six times total revenues, so that should give you an idea of how crazy this purchase price is," said a sports banker who was not involved in the transaction.

The document cites a five-year mean of teams that have been purchased during that time at a sales price of 3.4 times total revenue.

Donald Sterling testified earlier this month that he could have gotten at least $2.5 billion for the team.

Via Ramona Shelburne, Darren Rovell/ESPN

Sterling Sues NBA, Silver, Wife Seeking To Undo Sale Of Clippers

Donald Sterling filed a suit in Superior Court on Tuesday afternoon seeking damages from the NBA, Adam Silver and Shelly Sterling, alleging they defrauded him and violated corporate law in attempting to sell the franchise to Steve Ballmer.

Sterling asked for an injunction to freeze the $2 billion sale, arguing that his wife had no authority to sell the franchise because he is the sole owner and shareholder of the corporation which owns the Clippers, after he revoked the Sterling Family Trust on June 9.

"The new lawsuit states the seller of the team is not Donald, and it's not Shelly -- the seller of the team is the corporation that owns the team, and that's LAC Basketball Club Inc.," Donald Sterling's attorney, Bobby Samini, said Tuesday. "When Donald bought the team, the shares of the corporation are only in Donald's name. They were only issued to Donald, so Donald owns the shares of the corporation. He's the sole shareholder. He put the shares up into the trust in 1989, and when we revoked the trust, the shares go back down to him."

Sterling is attempting to undo the sale in order to fight the NBA in court.

Via Ramona Shelburne/ESPN

NBA Proposing New Lottery System To Balance Odds

The NBA submitted an official proposal to reform the lottery system, dismissing the Wheel idea in favor a revised weighting system that shifts each team's odds of getting the top pick.

The proposal is essentially an attempt to squeeze the lottery odds at either extreme toward a more balanced system in which all 14 teams have a relatively similar chance at the no. 1 pick, per sources familiar with the proposal.

The new proposal will give at least the four worst teams the same odds of winning the no. 1 pick, approximately 11 percent for each club. The odds decline slowly from there.

The proposal also calls for the drawing of the first six picks via the Ping-Pong ball lottery, sources say. 

Via Zach Lowe/Grantland

With Short-Term Contract, LeBron Holds More Leverage Financially And On Roster

LeBron James signed a two-year, $42 million deal with the Cleveland Cavaliers with the second season being a player option.

It took several seasons for James to express it, but the way the collective bargaining agreement puts a cap on his earning potential on the floor bothers him.

"At the end of the day, I don't think my value of what I do on the floor can be compensated anyway because of the CBA if you want this truth. If this was baseball, I'd be up there," said last season.

Last season was the first time James' salary was even in the top-10 in the NBA.

James is hitting the $20 million-plus mark in his 12th NBA season, whereas Kevin Garnett hit $20 million by his seventh season in a deal that was agreed upon two CBAs ago. Shaquille O'Neal earned $20 million in salary in nine straight seasons, while Kobe Bryant's two remaining seasons on his current deal will be his seventh and eighth making more than $20 million.

When James met with agent Rich Paul and his lead attorney Mark Termini before free agency began, they discussed the maximum salary issue. The plan was to demand both a max contract and to sign short-term deals for the foreseeable future.

If James had re-signed with the Miami Heat or chosen the Los Angeles Lakers, he also would have taken a one-year deal with the player option, sources said.

James is protected from missing out on being able to cash in if and when the salary cap increases, plus it opens up the possibility of him cashing in if the maximum salary is abolished or vastly raied in 2017 under a new CBA. James envisions getting a balloon payment toward the end of his career similar to what Michael Jordan made in the final two seasons of his contract with the Chicago Bulls.

It also gives James leverage to keep his team under pressure to continue spending on talent around him.

James has long believed in the phrase "no new friends" when it comes to those in his inner circle and now it is also "no long-term contracts."

Via Brian Windhorst/ESPN

NBA Salary Cap For 14-15 Hits $63.065M, $130k Less Than Expected

The NBA has announced that the salary cap for the 14-15 season has jumped to $63.065 million, which is approximately $135,000 less than expected.

The tax level will be at $76.829 million and the minimum team salary is $56.759 million.

The non-taxpayer mid-level is $5.305 million and the taxpayer mid-level is $3.278 million. 

Via RealGM Staff Report

Lakers, Rockets Had Richest Local TV Deals In 13-14

The Los Angeles Lakers and Houston Rockets have the NBA's two richest local television deals.

The Lakers signed a 20-year contract with Time Warner Cable in 2011, which averages $200 million per year for a total worth of $4 billion. The Lakers received their first payment last season of $122 million.

The Rockets also signed a new 20-year deal in which they received $45 million last season.

Last season the 30 NBA teams collectively generated a combined $628 million from regional sports networks and over-the-air stations. That is just 33% of the total $1.9 billion the league earns from all media revenue, in comparison to the 54% generated from national television partners ESPN/ABC and TNT.

Via Christina Settimi/Forbes

NBPA Advising Free Agents To Take Paychecks Over 18 Months As Lockout Protection

The National Basketball Players Association is advising free agents to take paychecks over 18 months as lockout protection following the 16-17 season.

The NBA last had a lockout in 2011 and either side can opt out in 2017.

“As we have learned in the past, the owners have made provisions with the TV networks to continue to receive rights fees throughout a work stoppage, and there is no reason the players should not make every effort to take the same precaution,” the e-mail said.

The union inserted the 18-month payment rule (36 bi-monthly payments) for the first time in the most recent collective bargaining agreement.

Via Scott Soshnick/Bloomberg

CBA Explicit In Not Allowing Prearranged Restructured Contracts

Before the official start of free agency on July 1, Adrian Wojnarowski reported that the Miami Heat had "the framework of deals in place" with LeBron James, Chris Bosh, Dwyane Wade and Udonis Haslem to remain with the team.

"Everybody has their [contract] number and has left a little bit of room to let [Pat Riley] maneuver," one source briefed on the contract discussions reportedly told Wojnarowski.

The NBA's collective bargaining agreement, however, does not allow a team and players to have an "express or implied" deal in place in what essentially becomes a restructured contract.

The risk of loss for Wade and Haslem would be severe since the contracts they opted out of are considered vastly more lucrative than what they would command as free agents on the open market. 

The following text is from Article XIII of the CBA in regards to circumvention:

Section 2. No Unauthorized Agreements.

(a) At no time shall there be any agreements or transactions of any kind (whether disclosed or undisclosed to the NBA), express or implied, oral or written, or promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind (whether disclosed or undisclosed to the NBA), between a player (or any person or entity controlled by, related to, or acting with authority on behalf of, such player) and any Team (or Team Affiliate):

(i) concerning any future Renegotiation, Extension, or other amendment of an existing Player Contract, or entry into a new Player Contract;

 -----

(c)  A violation of Section 2(a) or 2(b) above may be proven by director circumstantial evidence, including, but not limited to, evidence that a Player Contract or any term or provision thereof cannot rationally be explained in the absence of conduct violative of Section 2(a) or 2(b).

Via Christopher Reina/RealGM

Lakers, Bulls, Rockets, Celtics, Thunder Lead NBA In 14-15 Profits

The Los Angeles Lakers are projected to make $100.1 million in profit for the 13-14 NBA season, comfortably the best in the NBA.

The Chicago Bulls are second at $61 million, followed by the Houston Rockets ($40.7 million), Boston Celtics ($33.1 million) and Oklahoma City Thunder ($29 million).

The Lakers have a huge profit despite contributing a league-high $49 million to revenue-sharing.

The New York Knicks are expected to take a net loss of $3.5 million due to $27 million in revenue-sharing contribution and paying a large luxury tax bill.

The San Antonio Spurs, Utah Jazz and Denver Nuggets finished sixth, seventh and eighth, respectively, in net profits.

The Brooklyn Nets will post a loss of $144 million for the season.

Via Zach Lowe/Grantland

Report: Nets Projected To Take $144M Loss In 13-14

The Brooklyn Nets are projected to have a loss of $144 million for the 13-14 season, according to a confidential memo the NBA sent to all 30 teams in early June.

The NBA expects nine teams will end up having lost money once luxury-tax distribution and revenue-sharing payments are finalized.

The Washington Wizards are second in projected loss of about $13 million.

The Nets' loss is only from basketball activities and does not include benefits from their ownership stake in Barclays Center.

Bruce Ratner is open to selling his minority stake in the team and Mikhail Prokhorov would like to scale back spending to make that minority stake more appealing.

Via Zach Lowe/Grantland

NBA Considering Moving Back Draft, Adding Awards Show

The NBA is "very interested" in moving the draft after July 1 and packaging it with a season-ending awards show, possibly on consecutive nights.

Carmelo Could Take 7.5 Percent Pay Decrease In Year 2 To Create More Cap Space

Phil Jackson and the Knicks are not demanding Carmelo Anthony take less money to re-sign, but they are challenging him to do so.
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