Brooklyn Nets’ Keri Irving (left) takes a bet to teammate Kevin Durant as the Celtics expand their lead in the second half of Game Four of the first round of the NBA Playoffs Series at Barclays Center in Brooklyn, New York on April 25 2022.
Jim Davis | Boston Globe | Getty Images
The all-star and super-expensive Brooklyn Nets were supposed to be a super team. Instead, the otherwise lucrative NBA franchise snapped up another early playoff exit and is looking for answers as expensive looms.
Since the team pledged more than $300 million to former NBA champions Kevin Durant and Kyrie Irving in 2019, the team has yet to advance past the second round of the playoffs. Earlier this week, they were kicked out of the postseason by the Boston Celtics. One of their highest-earning players, Ben Simmons, hasn’t played since the Nets replaced distant star and former NBA MVP James Harden. (Harden and Philadelphia 76ers are still alive in the playoffs.)
The team is also looking for its third CEO in three years under owner Joseph Tsai. Rival executives in the NBA describe the $3 billion organization as “dysfunctional.”
“Netts fail,” veteran columnist Michael Welbone said this week on ESPN. “It’s the biggest story in sports.”
There are still some commercial advantages to Nets. An NBA executive said the team should still be optimistic about adding business partners because Durant and Irving are notable attractions, for example.
This year, bed nets must also recover from a $25 million drop in revenue due to the pandemic. The team earned $30 million annually for jersey patch ads. In February, Tsai noted that the team had “set franchise records for attendance, ticket revenue and sponsorship.” The team also collected its value from the proceeds of the two matches. This is an additional profit after regular season revenue covers expenses. Ticket prices are going up, too.
But Brooklyn, the seventh most valuable franchise in the NBA, can’t stand high expectations. A long-time sports marketing executive said sponsors don’t like being associated with franchises that don’t live up to the hype Tony Pontoro.
“It’s not good for the team’s image – and therefore not good for the sponsor,” said Pontoro, former vice president of global marketing for sports and leisure at Anheuser-Busch. “You want everything to be positive and successful, and you certainly don’t want a team with high potential to fall on their faces in the playoffs.”
Kevin Durant #7 of the Brooklyn Nets passes the ball as he is pressured by Jaylen Brown #7 of the Boston Celtics in the second quarter during Game 4 of the Eastern Conference First Round Playoffs against the Boston Celtics at the Barclays Center on April 25, 2022 in the Brooklyn borough of New York City. .
Elsa | Getty Images
For the past two seasons, Brooklyn has had the makings of winning the title, at least on paper. Last year the New York Times wondered if the Nets — which included the superstar trio of experienced playoffs Hardin, Durant and Irving at the time — might end up doing it all. The greatest team of all time.
“We were all fascinated by him,” one NBA executive said of the Nets. “And we were wrong to assess these guys as a real threat to the title. It’s the perfect example where marketing has really taken the place of substance.”
Instead, the now-departed Harden was injured, and the team lost in the second round of the 2021 qualifiers. This year, the Nets replaced Harden, who was with the team for just 80 games over two seasons, for Simmons. Simmons did not play, and the Nets finished seventh in the Eastern Conference, defeating the Cleveland Cavaliers in a game played on the right to be swept away by the rising Celtics.
Infections were a factor, as was Irving’s refusal to get the Covid vaccine. The Nets had initially banned Irving from playing, only to welcome him back after New York dropped the vaccination requirement. He played in only 29 matches out of 82 regular season matches.
One executive described the Nets as being “trapped with noise–distractions, controversy, miscommunication” during Irving’s absence. This eventually led to their demise.
The NBA executives who diagnosed the Nets as dysfunctional spoke to CNBC on the condition of anonymity because they are prohibited from discussing the team’s affairs publicly.
1 James Harden of the Philadelphia 76ers appears to pass in the first quarter against the Toronto Raptors during Game 5 of the first round of the Eastern Conference at Wells Fargo Center on April 25, 2022 in Philadelphia, Pennsylvania.
Tim Nwachukwu | Getty Images
One of the executives said the decision to Trade for Harden in Jan 2021 It was the real turning point because it deeply damaged the team. The Nets lost center Jarrett Allen, who became the Cleveland All-Star player. Guard Caris LeVert and striker Taurean Prince also traded.
“They bought the little stock,” one executive said of the Harden deal. “They didn’t do the basics, swayed wildly, and exploded.”
Now the Nets are stuck with the talented but troubled Simmons, who owes about $112 million over the next three years, including $35 million next season. It’s not clear when the former All-Star star will make his Nets debut. Simmons suffered a back injury as he He still has mental health issues After his poor performance in the playoffs last year.
Simmons’ situation “creates more noise and distraction for the franchise,” the executive said.
The Nets have other potentially costly issues on the list as well.
Irving needs to make a decision on a $36 million player option, but said he plans to come back. An agent suggested to CNBC that Bruce Brown’s market value protection could top $10 million a year after his stellar playoff performance. His salary is now around $4 million. Patty Mills has a $6 million player option, and Nick Claxton position is eligible for a new contract.
Nets operator BSE global has shown its willingness to pay luxury NBA taxes, a penalty the league applies after a team’s salary exceeds a certain point. This money is then distributed to teams that do not pay taxes.
For the 2021-22 season, the team’s estimated tax bill exceeded $90 million, second only to the Golden State Warriors tab, according to SpotracA website that tracks sports deals. That’s slightly higher than the previous season’s bill.
Next season, the NBA’s so-called soft salary cap will grow to $122 million, with the luxury tax threshold set at $149 million. Nets gross salary of $187 million for eight players on contract, according to Spotrac. We expect this number to grow.
Executives questioned how long Tsai, the billionaire co-founder of Chinese e-commerce giant Alibaba, would pay to chase what could be an early exit from a playoff.
“At some point, the owner looks at the payroll and says, ‘That’s out of the way.’ [the roster], so puzzled? If you don’t achieve the result — a championship — at some point, it will cost Sean Marks, an executive said, referring to NETs general manager Sean Marks.
Marks did not return a call from CNBC to discuss the matter.
Nets owner Joseph C. Tsai and Clara Wu Tsai at the game between the Brooklyn Nets and Indiana Pacers on December 21, 2018 at Barclays Center in Brooklyn, New York.
Nathaniel S. Butler | National Basketball Association | Getty Images
The uncertainty created a power vacuum, and one of the stars of the team confirmed himself. After the loss to the Celtics, Irving suggested he would team up with Durant, Marks and Tsai “to do some off-season moves” and be “mean about what we’re building and enjoying it.”
On the business side, the Nets are looking for another CEO next John Abamondi announced that he is stepping down Effective in July. The move has been a surprise since Abamondi took over the role in July 2020 after the current one sports sex CEO David Levy He resigned as CEO of Nets in January 2020 After only five months on the job.
The departures created a sense of confusion over who runs the club and led to other stress-filled questions. The franchisee, for example, will be scrutinized over whether to hire a black CEO.
There are only three black chief executives in the predominantly black NBA, up from the top seven in the league in 2007. NBA Commissioner Adam Silver has acknowledged the diversity issue, saying the NBA “could do a better job.” Regarding appointments between “CEOs on the commercial side of teams.”
Two sources in the league told CNBC that the Nets have already identified a candidate to replace Abamondi. The Nets did not respond to a request for comment on whether the team’s search for the CEO includes a black candidate.