NetsDaily Off-Season Report #3

Steve Mitchell-USA TODAY Sports

Every Sunday, we update the Nets' off-season with bits and pieces of information, gossip, analysis, etc. to help take the edge off not winning the NBA championship. We rely on our own reports as well as what the Nets’ beat reporters and others have slipped into larger stories, blogs and tweets...

Dreams of Brooklyn

There are 32 dreams on the line this week, as that many players show up at PNY Center to show off their talents. Of the 32, 10 have played in the NBA, from D.J. Kennedy's two games with the Celtics to Donte Greene's 253 with the Kings.  There are refugees from the Chinese Basketball Association, where Greene, Lance Thomas and Ivan Johnson toiled this season, putting up big numbers to mostly little effect, at least in the eyes of most scouts. The CBA is still looked on as a mediocre international league.

One thing you won't see is NBA free agent talent, players like Adonis Thomas, who the Nets brought in to training camp, then nurtured in Springfield before he had three 10-days, two with Orlando and one with Philadelphia, the last one signed in April for the rest of the season. That makes him Sixers property through the end of the month. If the Sixers choose to renew him, he's likely to sign with them. He'll be eligible for Early Bird rights next summer, for one thing. If not, the Nets are likely to pursue him at least in summer league.

How many of the 32 are likely to be offered summer league invites. No doubt the number will be small, in the single digits. Maybe one or two will get camp invitations and no more than that will make the team Some may make a little more money as a result of the camp. The Nets have said they could offer small guarantees to players they like who might be pursued by other NBA teams. The guarantees, probably in the high five or low six figure range, stay on the cap whether they make the team or not. And since the Nets will pay the luxury tax, the cost will be multiple times higher. So don't look for big spending.

Beyond the names we mentioned last week --Thomas, Greene, Kennedy, DeAndre Liggins, Ivan Johnson-- we should also point out that DaJuan Summers stands a chance. He's played in 83 NBA games at small forward and can shoot. It wasn't that long ago the Nets considered pursuing him.  (The  Nets in fact have looked in acquiring either through the draft, a D-League call-up or training camp invite a number of the players in camp, from Liggins and Machado to Summers and Kennedy. Of course, they did invite Thomas and Greene to training camp in the past.) So put him on your list.

And no, we still haven't figured out why two Argentines who play for a mediocre team in an international league --and who didnt make the Argentine national team-- are playing in East Rutherford.  Truly international men of mystery.

Another dream of Brooklyn

We all know how Lance Stephenson didn't/couldn't get into LeBron James head and how a lot of people, including teammate Paul George, coach Frank Vogel and GM Larry Bird, think he's been kind of a jerk.

So much so that Marc Stein wrote this weekend...

Here's the thing: Stephenson has turned off potential free-agent suitors with his unreliability -- ever since being snubbed for the Eastern Conference All-Star team -- as much or more than he's annoyed fellow Pacers. His free-agent market, according to the latest rumbles on the personnel grapevine, is already drying up. And it's not even June 1 yet.

Really, his market is "drying up?"  How much?  Has it so dried up so much that the Nets, his hometown team, might have a chance with a $3.3 million/$10 million offer?  Seems far-fetched for a 23-year-old who led the NBA in triple-doubles.

We have NO idea if the Nets front office has any interest in Stephenson. And if they were, it would mean they'd have to give up on Shaun Livingston, who is Mister Reliability.

But let's continue to play this parlor game a little longer. Stephenson made $1 million this season so $3.3 million would be a raise, or sorts. And he would be returning to Brooklyn, if, again, the Nets had any interest. There's some psychic reward there, maybe even some endorsements playing off his bad boy image.

Our own Dexter Henry, who covered Stephenson at Lincoln High School, interviewed Stephenson last November about joining the Nets this summer.  First of all, Stephenson talked about how thrilled he is that Brooklyn has a team.

"When I was young, I always dreamed for an NBA team to be in Brooklyn and now it's really happening," said Stephenson who broke the New York State high school scoring record at the Coney Island school.

But Stephenson wouldn't comment when Dex asked if he would like to play for his hometown team.

"Aw you can't ask me that question," said a smiling Stephenson.  "The future holds itself but I love my team, I love the Pacers. I would love to stay with my team. I'm happy with my team."

Now, it appears that his teammates don't love him.  There are ways for Stephenson to play for Brooklyn and preserve his flexibility down the line, after his reputation is restored. He could sign a deal with a team option after his first year  just as Andrei Kirilenko did when he realized last summer when his asking price was too high.

Of course, it's unlikely, and the obvious downside would be losing Livingston, but we wouldn't be surprised if the possibility comes up.  And here's a footnole: The Nets considered buying a second rounder in 2010 as he was coming out of Cincinnati. The Nets passed on the idea after examining his record, particularly his arrest for brutally beating up his girlfriend.

Is he a jerk? Probably, but really, is blowing in LeBron's ear or cupping his mouth that big a deal. As John Schuhmann noted in a tweet.

Let's discuss!

The repeater tax cometh ... Or does it?

With Kevin Garnett likely, very likely in fact, to return and the Nets being open to paying, overpaying in fact, Paul Pierce, it's hard to imagine Brooklyn avoiding the dreaded repeater tax. Without getting into all the gory details, the tax is instituted if a team pays the luxury tax three years out of four. Its an add-on to the luxury tax. The Nets will cross that threshold this Year, having laid out $12 million in taxes for 2012-13 and $89 million for this year.

How bad would it be?  If the $102 million Nets roster this season had been subject to the repeater tax, the total bill would have been $235 million! Alert the ONEXIM CFO!

But there is an out, of sorts. If the Nets are non-competitive by next years trade deadline, the team could start dumping contracts. The taxes are calculated on a team's roster the final day of the regular season, not the first day. So the deadline would be last chance to limbo under the tax line.

It would also give the Nets some flexibility in using sign-and-trades, acquiring players with the MLE which should be near $6 million and/or the BAE, which should be near $3 million. The Nets can also trade the rights to their 2015 first round pick.

How easy would it be?  It's an old adage in the NBA: you dump contracts just as easily as you can acquire them, even easier. Ask Kiki Vandeweghe. He made a career out of it.

Of course, that would mean the Nets didn't have a chance for a championship. Alert the ONEXIM wedding planner!!

The premium and the suitor

The speculation that the Nets are worth so much more than the Clippers goes to the history of team valuations, as estimated by Forbes. The Nets valuation has always been 35 to 40 percent higher than the Clippers. That in turn had to do with market size ... And Donald Sterling's horrific management of L.A. Now, several of the Nets minority investors are doing the math and putting the Nets at 35 to 40 percent higher than the $2 billion price tag the Clippers fetched or $2.7 or $2.8 billion. Maybe.

First of all, there's no indication that Mikhail Prokhorov is planning to sell. In the next couple of weeks, the Nets will in fact announce another acquisition, their Brooklyn training facility.  That's a $45 million commitment.

But there are downsides too. Until recently, the way to make money on a professional sports team was in capital gains when the team was sold. Someone was always willing to pay more, usually a lot more, for a franchise.  The "greater fool" theory, if you will. But with the advent of the new, own CBA, most teams, maybe 29 teams, are profitable. You know the one that isn't. You cheer for them. Estimates of operating losses range from $23 to $50 million, all of it because of the incremental luxury taxes instituted this year.

So, the downside of a big luxury tax/big valuation is that it could scare off partners. Who's willing to plop down hundreds of millions knowing that they will be sharing losses, not profit, for the foreseeable future. That's not an abstract measure for Bruce Ratner, who couldn't afford to pay his share of the losses this year and took out a loan from Prokhorov to cover what he owed. As he seeks the best price he can get for his share, you can be sure the prospective suitor will raise the issue.

The Clippers were also a neat little package 100 percent owned by the Sterling Family Trust. The Nets have around 100 investors. That's a negative or better put, there's a premium on having total control.

Who might want a piece of the Nets? How about those investors who Steve Ballmer outbid?  One possible suitor is Guggenheim Partners, owners of the Dodgers ... along with Magic Johnson. They and Ratner (and presumably Prokhorov) are already partners in the Nassau Coliseum rehab. Would Magic join them in a bid for the Nets. NO idea.

And remember this, under terms of the Nets partnership, either partner has the right of first refusal if the other wants out.  So Prokhorov can match whatever the Ratner gets. AND if he doesn't, whoever winds up with Ratner's share will have the right of first refusal when and if decides to sell.

Final Note

Charles Klask's decision to return to Detroit was a no-brainer. The assistant coach,a Michigan native, had been brought in by Lawrence Frank as an in-games stats guy. Kidd is not high on deep stats and once Frank was re-assigned, Klask was sans rabbi. He was later re-assigned as well, leaving the bench for the advance scouting job as Sean Sweeney and Jimmy Saan rose in Kidd's estimation. It happens. Moreover, Klask had worked for Stan Van Gundy in Orlando.

Don't expect Klask will be the only change along the bench this summer.

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