NetsDaily Off-Season Report - No. 10
We’ll be updating the Nets’ off-season weekly, with bits and pieces of information, gossip, and everything in between to help fans get ready for ... anything. First things first. Everyone knows that the NBA Draft is Wednesday night at 7:00 p.m. (first round) and Thursday night at 4:00 p.m. (second round) on ESPN. Right? And you can buy tickets for the first round at Barclays Center. Right? And that the.Nets are the only team with no picks in the first or second round. Right... as of now?
But before the Draft, things will likely get busy. Monday is the deadline for the NBA Board of governors to approve the sale of a 15% minority stake to Julia Koch and her three children. The only question as of now is whether James Dolan will once again be a curmudgeon and be the lone vote against the transfer as he has the last two times the league took up team transactions.
Then Tuesday, the New York Liberty will try to make it two in a row in Commissioner’s Cup competition when they play the Minnesota Lynx in the finals of the mid-season tournament. Because of a schedule screw-up, that game starts at 8:00 p.m. ET. It’s at UBS Arena in Belmont, N.Y., not Barclays Center. So root, root, root for the home team.
And if you’ve been reading here or on our Twitter page, you that historically Sean Marks’ trade window opens up 48 hours before the Draft. That’s Monday too.
Jordi Fernandez will also be in the news starting Friday when he gathers his Team Canada team in Toronto for a few days before moving on to Las Vegas.
Finally, the Nets exclusive bargaining rights with their own free agents, starting with Nic Claxton, which began Tuesday ends next Saturday. Then, starting next Sunday, Claxton, Dennis Smith, Lonnie Walker IV and Trendon Watford can talk to other teams if they haven’t already re-signed for Brooklyn. Similarly, Sean Marks can talk to other teams’ free agents. The off-season is officially underway.
Koch fallout
Of course, last week, there was a big news week, too, with the Julia Koch agreement to buy 15% of BSE Global, the Tsai family holding company for their Brooklyn properties. She and her three children, Maria Julia Koch, David Koch Jr. and John Koch, will wind up with passive ownership of the stake, meaning that Joe and Clara Wu Tsai will not be ceding any control or decision-making, including in basketball operations. Neither Koch nor her children will be alternate governors. In the press release announcing the deal, BSE Global, the Tsais’ holding company, called the deal a “strategic partnership.”
So why buy in? As we noted in our coverage, the valuation of NBA teams is skyrocketing, her older son, 25-year-old David Jr has an interest in running and NBA team far in the future and there may be an element of “sports-washing,” using sports to help resurrect, reflect, recharge the buyers’ reputation.
Koch Industries, the source of the Kochs’ $65 billion fortune, has been among the nation’s most controversial, financing a number of conservative and libertarian causes not in line with the generally liberal spirit of the NBA. Harvey Araton, the veteran basketball writer, tweeted about the Kochs purchase of the Nets stake and Miriam Adelson’s recent purchase of a majority share the the Mavericks this way...
Adelson and Koch $ now flowing into the NBA. Two of the biggest donor supporters of people that tried to nullify millions of Black votes in 2020. Crickets on this from inside the NBA. https://t.co/n7FGyiY7o9— Harvey Araton (@HarveyAraton) June 19, 2024
As the week wore on, the financials came into clearer view. A lot of the money the Kochs will send to the Tsas will be used to retire debt. The Nets, Barclays Center and the Liberty have not made big profits or any at all since the Tsais first bought a minority share, of the Nets and Barclays, then the whole thing, from Mikhail Prokhorov over a nearly two-year period starting in 2018. The Tsais got control of the Libs in a separate transaction with James Dolan of MSG. Retiring the debt will of course add to the value of the assets going forward, good news all around.
Norman Oder of the Atlantic Yards/Pacific Park Report who’s tracked team finances since the team’s moved to Brooklyn, summarized the latest Sportico and the New York Post reporting this morning...
OK, the initial numbers reported (link) were a bit inflated, but two days ago Sportico asserted that the Koch family is paying $688 million, not the presumed $900 million, for a 15% stake in BSE Global, which includes the Brooklyn Nets, Barclays Center operating company, and the New York Liberty, among other assets.
Though $688 million is nearly 15% of $4.6 billion, the valuation is still said to be worth $6 billion according to Sportico, or $5.8 billion according to the New York Post. Sportico said that $492 million will be used to pay down debt, and $196 million for working capital.
It’s not clear exactly how the math works, since we don’t know the terms of the debt, but the removal of about one third of net debt—is the remainder the annual arena bond payments?—diminishes future obligations and makes the properties more valuable.
Not quite as lucrative as initial reports suggested but it’s still a coup for the Tsais. Their 85% stake in the BSE Global assets — or whatever the final number turns out to be will — will be more valuable than what he paid for them five years ago and the Kochs’ enormous wealth will likely permit BSE Global to make other sports investments.
Back in April, two months after the initial reports of the Koch interests broke, there were hints of that. Ollie Weisberg, who runs Blue Pool Capital, the Tsais family investment vehicle, noted that the Tsais are interested in making more sports investments, particularly in women’s sports.
“We believe that the rising interest in live sports, and the increasing growth in media rights, that’s something we’re super excited about. It’s not just the NFL, the NBA, the NHL. It’s women’s soccer, women’s basketball,” Weisberg told an investment symposium in Hong Kong.
Indeed a lot of people may have underestimated the Tsais’ interest in sports as an investment. In addition to the Nets, Liberty and Barclays Center, they have investments in two lacrosse leagues, both indoor and outdoor, as well as a small piece of the LAFC franchise in the MLS. Joe Tsai also has been quietly responsible for the improvement in relations between China and NBA.
Bottom line: the Tsais will be better equipped financially to make certain decisions but having all the money in the world doesn’t give you that much of an advantage when the league’s goal of parity keeps narrowing the gap between rich and poor. At the moment and at least through next summer, the key element of the sale, the Brooklyn Nets franchise, is not in good shape after losing 50 games last season while being well over the salary cap. They need a big turnabout now, no matter who’s sitting courtside in Nets gear.
Back to basketball
The clock continues to tick on Nic Claxton. Virtually every pundit has written that the NBA believes that the Nets will re-up him at somewhere around $20 to $25 million a year over a four year deal. Like Cam Johnson’s deal last season, expect any Claxton deal with Brooklyn to include both likely and unlikely bonuses and be configured so that the Nets will have maximum flexibility in 2025-06.
In recent days, both Brian Lewis of the Post and C.J. Holmes of the Daily News have written pieces on Claxton’s free agency. For Lewis, returning Claxton is an absolute necessity. Holmes writes that it might not be that bad if he doesn’t stick around.
“Nic Claxton is at the center of the Nets’ summer,” wrote Lewis. “Overpaying him would be a problem. But losing him would be a catastrophe.”
Lewis quotes a number of NBA cap gurus and pundits who cap gurus on where things stand, but him the bottom line is not what he’ll be paid but how the loss while adding to the team’s 2025 cap space will be a failure for a team that’s already lost so much in the last year and a half.
“They have to pay him,” one league executive told Lewis. “They don’t have a choice.”
It’s not just that the loss of Claxton would be another blow to a franchise that had three future Hall of Famers on the roster two years ago and now has draft picks and trade exceptions instead. It’s about what the 25-year-old brings to the Nets defense that makes him more valuable to Brooklyn than to other teams. As Lewis writes:
Claxton has been more valuable to the Nets than he would’ve been to some other teams, not just because he’s their homegrown player but because of how he plays. He’s the best switching big man in the NBA, playing on a team that switched defensively more than any other team in the league.
It’s unknown how the Nets will switch in new coach Jordi Fernandez’s scheme. He clearly respects Claxton, stating the center could win Defensive Player of the Year for the Nets.
Now they have to figure out what price is right.
It would appear that at the moment, there isn’t much competition for Claxton. There is not a lot of cap space available around the league and the teams with the ability to pay already have a big man as young as or younger who they like a lot. Still ya never know.
Holmes thinks life without Claxton would not be so bad even if he leaves for nothing. For him, the loss of Claxton could accelerate and deepen the team’s rebuild. Why hang on to Mikal Bridges if you lose Claxton.
Just because Claxton has been good for Brooklyn does not mean it cannot find a better fit, at a better price, down the line. And the truth is, letting Claxton walk in free agency would simply jumpstart a rebuilding phase many view as an inevitable fate for the Nets...
After all, Day’Ron Sharpe and second-year forward Noah Clowney are still on the roster, also oozing with untapped potential that needs to be cultivated. Both are better fits long-term if Brooklyn decides to rebuild. The Nets have thrived when it comes to identifying young frontcourt gems in the past, so replacing Claxton is nowhere close to impossible.
Of course, a deep rebuild would take some time as it did in 2016 through 2019 in Sean Marks first time around. Gaining then losing all that talent, topped by a long rebuild would test the fan base even further. It wouldn’t be a good thing for Jordi Fernandez either.
In the middle of this week, Claxton and a friend were spotted in the stands at Barclays watching the Liberty. But his picture did not show up in the gallery of celebrities. Take that for what it’s worth which is probably nothing.
If the reason for not keeping Claxton is about money, things could get downright ugly. How would fans react to the team not paying a top young player when team owners got paid days before? Yes, you can argue it’s apples and oranges and the CBA and whatever else, but we can guarantee that argument will be lost on much of the fanbase.
Draft Sleeper of the Week
This is our last profile before the Draft itself and no, we have no idea who the Nets will take or even if they will get into the draft. Someone did hint to us that the Nets could add two pieces.
As far as we know, there’s only been been one report linking the Nets to a specific player, NBADraft.Net’s Aran Smith reported that the Nets may be “targeting” the G League’s Tyler Smith, a 6’11” PF/SF. That’s all the intelligence we have. Hoopshype’s list of 14 prospects who’ve been in for workouts is helpful, but incomplete. Pacome Dadiet, the French wing, is the highest prospect on the Hoopshype list, at No. 32, but he appears to be moving up in the mocks after working out. We’ve profiled both Smith and Dadiet in these pages before.
Maybe the most intriguing prospect on Hoopshype’s list is Enrique Freeman, a 6’7” forward with a 7’2” wingspan from the University of Akron and serious credentials on defense and under the boards. He was the NCAA’s leading rebounder at 12.9 a game last season and in pre-draft workouts and the G League Elite Camp has shown off some 3-and-D prowess as well.
A walk-on at Akron where he was a fifth year senior last season, he’s been moving up the draft based not just on his college performances but the intensity he’s shown at places like the Portsmouth Invitational, the college seniors’ camp; the aforementioned G League Elite and the NBA Draft Combine.
Here’s what Sports Illustrated wrote about him earlier this week.
He capped off his college career with a phenomenal performance in the NCAA Tournament, producing 21 points and 14 rebounds against Creighton in the first round...
He led the country in boards last season, which is largely due to effort and positioning. He’s relentless on the glass, especially on the offensive end of the floor. There were countless possessions last season where most players would give up on play, but Freeman ended up with the rebound for second-chance points. Not only did he average 13 rebounds per game last season, but he has also notched three 20-rebound games in his career.
He has drawn comparisons to other similarly undersized but intense forwards like Draymond Green and Herbert Jones. He is older at 24 than his draft class but with that comes a toughness coaches admire. Freeman had no college basketball offers after a high school career in Cleveland. He accepted an academic scholarship to Akron and tried out for a walk-on spot with the school’s basketball team, earning a roster spot. He played only 13 minutes as a freshman, then grew three inches before his sophomore year and wound up starting, gathering all-MAC Conference honors along the way, including player of the year this past season.
He seems headed for the middle of the second round where no doubt there will be a lot of movement Thursday afternoon.
Coach Whitehead and Coach Sharpe
Last weekend, a group of local hoopsters gathered at the Barclays Center practice court for a tournament sponsored by Wah Yan Chi Nin, the Chinese street clothes brand who’s one of the Nets sponsors, responsible for the team’s annual Chinese New Year’s celebrations at Barclays Center.
The Nets lent their P.A. announcer Olivier Sedra and two players to act as coaches for the competing teams in the WYCH Invitational: Dariq Whitehead and Day’Ron Sharpe. The Nets Weibo site posted some highlights. No word on who won, but Day-Day looks slimmer and Dariq looks ready.
Forward without Jordi
As noted way above, Jordi Fernandez will be gathering his Team Canada charges in Toronto next weekend and from this point through early August his focus will be on the Olympics where Canada is a medal favorite with its cast of NBA players. It is not a bad thing considering it gives Fernandez another opportunity to man the clip board in a high profile job. (It also doesn’t hurt to have the Nets head coach mingle with a lot of top flight players who eventually will be free agents and for the second time. Team Canada surprised with a bronze at the FIBA World Cup.)
So between now and the end of the Olympics, starting with the Summer League, two of Fernandez’s Nets assistants will handle things. Steve Hetzel, who Fernandez has known since the two worked together on the staff of the Canton Charges, the Cleveland Cavaliers G League team, and Juwan Howard whose broad experience is different from the development-centric histories of his colleagues.
Howard, 51, is the only one of Fernandez’s staff with NBA playing experience or serious head coaching experience, having played 19 years in the league and been head coach of his alma mater, the University of Michigan for five years, He started at Ann Arbor as a member of the Fab Five in 1991, that spectacular recruiting class that included him, Chris Webber and Jalen Rose. They joined a squad that already had a smart bench player named Rob Pelinka.
Brian Lewis profiled Howard earlier this week and quoted Fernandez on what Howard brings to the Nets. He noted that not only was Howard the head coach at Michigan. He was an assistant under Erik Spoelstra with the Heat.
“The NBA is a small league. At the end of the day … we all know each other. I didn’t know Juwan well, or had a personal relationship, but I knew a lot of people that I trust that have worked with him,” Fernandez said. “Obviously you respect his career as a player, his presence, what he represents, his career as a coach with the Miami Heat with that special culture they have, being a head coach in college.
“So we had a few conversations. We connected very well. And I could tell right away that he’s gonna be a big part of what we’re trying to do here. So I’m going to rely on him in a lot of things. And like I said, he’s very unique, his background, and I’m excited to have him with the group.”
Howard, he adds, has the requisite experience as a coach, the respect of being an NBA veteran and one other thing: he can still get out there on the court and mix it up with the players.
“Juwan obviously has done [it] at a very high level. And some other coaches that have played at a high level, and they can still hoop with the guys,” said Fernandez. “That’s important, because a lot of times you have to connect in different ways, and we have different backgrounds to connect with our guys in a different way.”
Howard did have some issues at Michigan, as Lewis pointed out. He slapped a Wisconsin assistant in an on-court brawl and had a heated physical confrontation with the school’s strength and conditioning coach about treatment over his son Jace’s leg injuries. Ultimately, the 2021 NCAA Coach of the Year got canned after losing 24 of 32 games last season. Now, back in the NBA, he’ll have a chance to get back in basketball gods’ good graces.
Final Note
In writing this Sunday, we wondered if we would be upstaged by some Woj Bomb and Sham Wow, or whatever you called it. Things are that close, but no such bad luck has befallen us. Things are relatively quiet. That will change soon. Whatever questions fans have about the so-called “direction” or “culture,” etc. should be answered in the next two weeks in the Draft and in the first week of free agency. Then it’s on to the Summer League. Sounds like fun.
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