NetsDaily Off-Season Report #8

We're a little late with this week's Off-Season Report. We were traveling and out of touch with the world of the Internet. We will try to make up for our tardiness.

We look at how the Nets community efforts are helping to attract a fan base: where the Nets might find a willing seller on Draft Night; an unlikely draft "sleeper"; who will make up Brooklyn's first pro team in 50+ years; how Mikhail Prokhorov has nearly doubled the value of his investment in the Nets and Barclays Center. in two years; Jay-Z's new and expanded role, and the value of the "stretch exception," etc.

Every Sunday, we’ll be updating the Nets’ off-season with bits and pieces of information, gossip, etc. to help take the edge off missing the playoffs, relying on the Nets’ beat reporters and others who have slipped interesting stuff into larger stories, blogs, tweets...plus our own reporting.

Brooklyn...It's a Movement

In an interview with Mike Scotto on RealGm, Brett Yormark talked this week about how he sees the role of the Brooklyn community in building a fan base.

"This is about a movement and it’s not just about what the fans see on the court. They’ve got to see our players, our organization, our management in the community engaging with kids, engaging with those that truly need us, and I think that’s a great part of the NBA," said Yormark.

Indeed, the "Nets Experience", their 40-foot trailer, has been circulating throughout Brooklyn neighborhoods the last few weeks, traveling to the far reaches of the borough, at street fairs, community events, etc. Now decorated in team colors, it's a "hoops party truck," as the Brooklyn Fans website notes. It's been to a few of the events, where Nets staffers give fans a chance to shoot buckets for prizes, hear tunes from roof-top DJs and bands, and buy new black and white Brooklyn Nets gear.

How it works is anyone's guess, but Brett Yormark tweeted a promise this week which didn't make headlines, but did make heads spin. "You can expect brooklyn nets fans to be very much like what we saw in okc last night," he tweeted after Game 1 of the Finals. Of course, the Nets are going to have to win.

Meanwhile, Crains New York reports that there's great interest in the Brooklyn community in working for the Nets and the arena. It reports:

In just two weeks, more than 9,300 people have sought jobs at the Barclays Center, the arena opening Sept. 28 in Brooklyn. They were prompted by 21,000 postcards mailed to Housing Authority residents by developer Forest City Ratner, which also visited local churches. About 2,000 jobs are available, though barely 100 are full-time positions. Top priority in hiring is being given to Housing Authority applicants, followed by those from the three nearest community districts. The city Department of Small Business Services will help screen applicants.

Each of those 9,300 people now have a connection to the Nets. For 2,000 of them, or however many Brooklynites get jobs, the connection will be very strong.

Meanwhile, a rally against the arena, claiming Bruce Ratner hasn't done enough to create jobs and provide affordable housing attracted 80 people.

Draft Night Dealing

Not to harp on it, but we continue to believe the Nets already have a Draft Night trade in place, either acquiring a first round and/or trading for a veteran player using some of their assets. The confidence level about a first rounder seems high and there have long been rumors that the Nets would make a big splash on Draft Night. Deron Williams hinted back in April that the Nets could make some moves "on draft day." (No, we don't think Dwight Howard will be dealt on Draft Night.) Besides, Billy King made two draft night deals last June, trading the #27 pick and the Nets 2014 second rounder to Celtics for #25 (MarShon Brooks) and sending $1.5 million in cash and the Nets 2013 second rounder to the Timberwolves for the rights to Bojan Bogdanovic.

Who might their partner be? Two possibilities mentioned by a number of writers are the Bulls and Thunder. They have low first round picks, #30 is held by Chicago and #28 by OKC, and rosters that are not in need of marginal additions carrying three-year guarantees. They've been rumored to be the most likely to sell their pick or perhaps deal it for a future pick. (The Nets have two picks --their own and the Rockets' lottery protected pick-- in the 2013 draft which is viewed as weaker, perhaps substantially weaker, than this year's. That of course can change.)

Who's in that neighborhood, if indeed that's what the Nets are planning? Evan Fournier of France, Marquis Teague of Kentucky, Tyshawn Taylor of Kansas, Tony Wroten of Washington, all who can play the point among others.

Why are so many teams willing to deal? Economics is likely to be the big factor in whether a team wants to trade or sell its pick(s). Rookie contracts signed his summer will expire in 2013-14, the first year of the new harsher luxury tax rules. Does a team worried about massive luxury tax payments want to guarantee a player, taken at #28 or #30 a two of three year deal. Teams are going to be far more judicious in looking at what a rookie can do two or three years out. (Free agent contracts do have a little more flexibility with the stretch exception now in effect.)

Alex Kennedy of HoopsWorld reported Saturday what beat writers have reported regularly since the Nets lost out in the Lottery: "League sources say that Brooklyn is one of several teams trying to move into the first round, which shouldn’t be too hard given how many teams are willing to part with their pick."

He breaks down the current thinking on what teams might be willing to deal, moving up or moving out. the Trail Blazers (#6 --the Nets pick and #11) and Hornets (#10) are looking to trade for players who can impact their roster right now. The Bucks (#12), 76ers (#15), Boston Celtics (# 21 and # 22) are trying to trade up. And the Rockets (#14 and #16) and Warriors (#7, #30, #45, #52) are simply aiming to trade away some of their excess draft picks.

Draft Sleeper of the Week

Billy King has said if there's a player the Nets like who's dropping they will try their best to get him. Perry Jones III fits both those definitions. He's slipping in mock drafts and the Nets like him. The 6'11" Baylor combo forward with NBA talent but a suspect motor is listed at #19 in Chad Ford's latest ESPN mock; #15 in Jonathan Givony's Draft Express and Yahoo! mocks and all the way down at #21 in Aran Smith's on NBADraft.net.

Ford put it best in his analysis on ESPN Insider: "This is a long way for Jones to slip in the draft. Many believe he's a top-five talent, but no one knows what position he'll play in the pros. His situation reminds me a lot of the one Josh Smith was in a few years ago. Jones may find a home in the lottery, but if he doesn't he could slide this far. Given Jones' raw talent, he's definitely worth the risk at this point."

Givony thinks he needs a coach who could give him "tough love" (he cites Doug Collins as his example, but that description could also fit Avery Johnson.)

What's the problem with PJ3? He's not a troublemaker, not a malcontent. He just seems to disappear in games, sometimes big games as he did against Kentucky in the South Regional. He looked woeful against Anthony Davis early when Baylor went down big, but recovered and finished with 17 points in a respectable performance late. Also, he had four points in his first game against Kansas State in Big 12 play and a season-high 31 in the second meeting. Bottom line: the 20-year-old hasn't done what was expected of him after being among the nation's top high schoolers two years ago but it's hard to pass on a player who's nearly 7-foot tall and can run, jump (38.5" vertical), pass and shoot.

How much do the Nets like him? He wasn't far behind Davis, Thomas Robinson and Michael Kidd-Gilchrist in their assessment of "immediate impact players" when they decided to trade the top three protected pick to Portland. Problem is that it would take some deft maneuvers with limited resources for King to pull it off. In other words, don't get your hopes up if you like him and don't panic if you don't.

Julian Wright and the Boys of Summer

The most famous book written about the Brooklyn Dodgers was "the Boys of Summer," Roger Kahn's classic about the Dodger powerhouse teams of the 1950's, before they packed up and left for L.A. Interestingly, the next professional team to wear Brooklyn colors will be the Nets' Summer League team in Orlando. They open July 9 and play five games in five days at the Magic practice court.

Julian Wright revealed this week that he will be playing for Brooklyn this summer in Orlando. A 6'9" combo forward, Wright, taken #13 in the 2007 Draft, never panned out his first time around, but after playing for the D-League champion Austin Toros this year, he attracted attention from several teams.

And just as the Nets scored the best D-League player at mid-season, Gerald Green, Scott Schroeder of Ridiculous Upside, SB Nation's D-League blog, thinks they could scored the best D-League player at season's end as well.

In a series of tweets Thursday, Schroeder wrote about Wright.

"May have ended season as best D-League player..."

"But yes, though Julian Wright's game better suited to higher-paced D-League style, he's an NBA player. Fully expect him on roster next year."

"More disappointing to know he ended his season in the D-League without an NBA call-up: Antoine Wright or Julian Wright?"

Other than Wight, the only players we know will be on the Summer League Roster are Marshon Brooks, Jordan Williams and Jeff Foote. Dennis Horner had accepted an invitation but broke his foot like any Nets big man should.

Prokhorov's Profits

The Memphis Grizzlies announced an agreement this week with a tech billionaire to buy the team for $335 million. Also this week, the NBA gave its final approval to Tom Benson's purchase of the New Orleans Hornets for $338 million. That's good news for the Nets' ownership.

Mikhail Prokhorov paid $260 million in 2010 for the Nets and other assorted Brooklyn properties --$200 million in cash plus $60 million to cover operating costs while the Nets were in New Jersey. In return, he got 80% of the team; 45% of Barclays Center (with an option to up that to 80% if Bruce Ratner doesn't repay a $77 million loan to cover arena infrastructure in 15 months); and an option to buy up to 20% of the overall Atlantic Yards project. Neither the Grizzlies sale nor the Hornets sale included any percentage of the team's arenas. Moreover, Memphis and New Orleans, at No. 48 and No. 53, are the NBA's two smallest markets. Prokhorov's Nets are now in the NO. 1 market.

Prokhorov told Forbes Russia in 2010 that he expected his investment in the Nets and Brooklyn real estate to reach $1 billion in value by 2015. Some people laughed at that idea. No one should be laughing now. Based on the valuation of two NBA teams in small markets, Prokhorov's investment now looks like it's north of a half-billion and going strong. If his other 2015 prediction --that the Nets will be NBA champions-- comes true and Ratner can't repay that loan, he could make that billion dollar projection.

Jay-Z's role

A lot of copy on the internet this week about Jay-Z's role with Barclays Center. It turns out that he's a director of the company that owns and runs the arena. What's his role with the Nets? It hasn't been disclosed. Let's leave it at that.

But increasingly, you can see his imprint, literally and figuratively on the arena and the team. Jay-Z may not have put pen to paper on the Nets logos and colors. His graphic designer, Timothy P. Morris, handled that. Jay-Z may not have designed the club spaces at Barclays Center, including the new 40-40 club. Arena architects at SHoP and designers at Jeffrey Beers International did that, but Gregg Pasquarelli of SHoP has exuded praise for Jay-Z, saying his input has been real.

The new directorship raises questions questions once again about his role with the Nets. We read "Empire State of Mind", an unauthorized biography of Jay-Z, this weekend. Most of it is concerned with his business dealings, not surprisingly since the author is Forbes writer Zach O'Malley Greenberg. There's a chapter about his involvement with the Nets and how he got involved (Jason Kidd suggested it to him before Bruce Ratner had even bought the team), how early (late 2003 as one of the original bidders on Team Ratner), and how much he paid (either full price at $4.5 million or a discounted price at $1 million) and how much he owned (about 1.5%).

What's happened since the book was written two years ago is uncertain. Under normal circumstances, his share would have shrunk by 80% when Prokhorov bought a controlling interest in the Nets, driving it down to less than one-third of one percent. But there has been a lot of scrambling inside the minority shareholder group and his ownership percentage remains undisclosed.

Insiders say Jay-Z wanted his deal with the team reworked in 2009, with him getting a fee and a title, "Cultural Icon", for his role with the team. Negotiations failed but were apparently renewed when Prokhorov took over the team in 2010. No one has every publicly discussed the parameters of a deal, but the Nets introduced Jay-Z as "Cultural Icon" (at the arena ground breaking in March 2010) and as "the Face of the Franchise" (at the Nets naming ceremony last September).

In the last two years, Jay-Z's partly owned advertising agency, Translation, got the marketing contract for the transition from New Jersey to Brooklyn. Morris, his graphic designer got the commission for the corporate identity, according to Morris website. His wife's (and Rihanna's) bodyguard, Robert Masiello, has become the Nets director of security and just last week, his choreographer, Tanisha Scott, became the Brooklynettes celebrity choreographer. As are viewed as top-notch in what they do. Ratner remains intensely loyal to Jay-Z for sticking with him throughout the long and arduous road to Opening Night.

Fans (but not the front office) may complain that he didn't deliver LeBron James or Carmelo Anthony, but Greenberg's book notes that in 2005, he was part of the effort to recruit Shareef Abdur-Rahim, who the Nets agreed to offer a contract, then reneged after a physical exam showed a serious knee issue.

The front office believes that in fact Jay-Z can be a big help in landing big talent although it should be known that Deron Williams musical tastes run more to jazz and R&B.

Stretch it out

As contract figures get thrown around in the next few weeks, don't panic. Remember this: the Nets and every other NBA team have an "out" if things don't work out, the stretch exception.

Here's how Chris Sheridan explained it in layman's terms, with a Nets example, last November.

Teams overpaying for marginal players, knowing that they can dump a guy owed $10 million in the final year of his contract if it is only going to count as $3.33 million against the cap in the ensuing three years.

For example, let’s say there are two teams bidding for the services of Kris Humphries, who is a free agent in more ways than one.

Team A is willing to give Humphries a three-year contract starting at $8 million. With 4.5 percent annual raises, Hump would have an offer of $25.08 million sitting on the table.

But Team B really needs someone to do the dirty work under the boards. So they make Humphries the same offer but with a fourth year added on, fully guaranteed at $9.08 million. Now, Hump is looking at a $34.16 million deal.

Which one do you think he’s going to take?

Team B’s, of course.

Then, after three years, if Humphries is a $9 million burden on Team B’s 2014-15 cap, they can waive him using the stretch exception, and he will count against the cap for only $3 million per season over the next three seasons.

Insert Gerald Wallace for Kris Humphries and add or subtract a year and you get the drift.

Final Note

Starting this week, draft prospects will drive over to East Rutherford, put on Brooklyn Basketball gear and work out for the Nets front office, coaches and scouts. Don't be surprised if the first group of players is filled with names unfamiliar to all but the most intense fans. The Nets expect agents for first round prospects to wait a while to see how serious King is about acquiring a pick. Around the same time, agents who see their prospects drop in mocks or hear the same from front office types will start calling. By the end of the process, you'll be able to tell how serious the agents think the Nets are about moving into the first round...and how high.

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