The Grizzlies Are Still Afloat

by Chip Crain

The guy is a billionaire and still profits from his other businesses. Spending $100 million and only recouping $70 million of it back, resulting in a $30 million loss, shouldn't be THAT big of a deal.

These guys own sports teams like someone else might own a boat or something. It's not a necessity that they have to have. It's a status thing.
a post on the Grizzlies Message Board

That has to be one of the least informed opinions I have ever seen. Do people seriously believe that the owners in the NBA can swallow $30 million losses every year because they see the team like a boat?

No one is going to lose tens of millions of dollars every year and not want to do something to stop that trend. Michael Heisley is no different and he took moves this year to stop it from continuing along that path. Sure it will magnify pain in the short run but these moves had to be made to put the team in position to move forward in the future.

Owners in the NBA are extremely competitive personalities for the most part and they want to win. Michael Heisley wants to win too. The team he had at the end of Jerry West's tenure was not the team he wanted and so he decided to remake the team from the ground up. A lot of people, including some who write on this blog, were screaming for him to do this for years. The attitude was that Pau Gasol, Mike Miller and the others were never going to compete in the playoffs. Not because they couldn't be role players on championship teams but they could never lead a team there by themselves and having them in that role of leader was preventing the Grizzlies from getting the type of player who could.

Well Heisley saw the same thing. He decided, along with Chris Wallace and Marc Iavaroni, that the team needed to be rebuilt from the ground up. They decided to go with a youth movement which has its risks not the least of which is some years of struggling at the front end. Do people prefer he try to rebuild by spending up to the salary cap with players who will only make the team average at best?

Heisley understands that the fans have to be won back and that will take wins on the court. He said as much at the press conference welcoming Mayo and Arthur to the team. He wants to win in the worst way and when the time is right he will spend the money needed to get the right player to help put the team in a position to win it all. He's not interested in acquiring a player who will make us marginally better this season but not be in position to spend money on the right player at the right time.

No one knows how well the team will perform this season. Most likely they will struggle with so much youth on the team. However, if Antoine Walker takes hold of the PF position and plays like he wants to be in the NBA in 2010 then who knows?

Why Do We Watch?

Thanks to Herm Edwards, we know why they play the games, but why do we, the fans, watch the games? Is it for the athleticism that is turned into artistic grace and poetry, as espoused so eloquently by Graydon Gordian (48 Minutes of Hell, Hardwood Paroxysm)? Is our attention drawn because we grew up watching, as our fathers did before us, so it has become ingrained in us? Do we watch simply to root for laundry, as Jerry Seinfeld once quipped when discussing the prevalence of player movement in the modern era? Do we watch for the purpose of gathering and calculating statistics? Is it merely a team's geographical proximity to our current location? What is it that drives us to become fans of a player, a team, a sport?

Obviously, it could be any one of those reasons or even all of them. Loyalty is developed in different ways for different people. The reason that I am currently pondering this question is because of the cynicism that the Grizzlies fanbase has adopted in recent years. Right now, on the Grizzlies' Fan Boards, there is plenty of discussion about "smokescreens" and conspiracy theories. On many well-known websites and blogs, there have been comments made about the Grizzlies' reluctance to pursue any of the big name free agents, despite their position as the last remaining team with any significant cap space, is a "detriment to the league" and is proof that they "do not intend to be competitive". All of this has been eaten up with a spoon by a large percentage of the fanbase, but for the life of me, I cannot figure out why.

If you truly believe that your favorite team isn't making moves to better itself in the future, with the goal of a realistic shot at a championship in the viewfinder, then why would you continue to root for that team? If financial considerations are not only the primary concern of a team, as Chris Vernon has stated, but is, in fact, their only concern, then what would motivate you to continue rooting for that team? If you truly believe that your team's owner, GM, coach, et al, have resigned themselves to losing for the forseeable future, then why would you stay on board a sinking ship?


Is Michael Heisley focusing on losing less money than he has in the past -- and possibly even making some for a change? Absolutely. Does that mean that the Grizzlies are guaranteed to flounder at the bottom of the standings? Nope. The issue I have right now is that it seems that everyone wants to lump both questions into one answer. Even if Heisley is more concerned with the bottom line than a position at the bottom of the standings once again, that doesn't mean that the Grizzlies won't get better. This isn't an either/or situation. In fact, that's something that I believe that Heisley is counting on.

If the team becomes competitive over the next few seasons through Chris Wallace's management of personnel with trades and the draft, then Heisley has a valid reason to spend money on a quality free agent that could put the team in a position to make a serious postseason run. Of course, if the team has done that with "homegrown players" like Rudy Gay, Mike Conley, O.J. Mayo, etc. then they will have to sign them to extensions, which could take a big chunk of that cap space that everyone is talking about right now. If that occurs, then Heisley still has an out for not spending, since the team, which currently has 8 players under the age of 24 that are expected to contribute, could be solidly set at all 5 positions, meaning there isn't a necessity to spend money on a big name free agent. I'm not saying any of this to support Heisley's "Three Year Plan" or the practice of putting finances above wins. However, this is a reality that everyone should consider when they look deep within and ask themselves why they watch.

I watch, because the NBA = entertainment. I watch to see the best athletes in the world, night in and night out. I watch because the jersey says "Memphis" on the front of it and the team plays 20 minutes from my house. I watch because I expect great things from young players. I watch because I truly, honestly believe that this team will continue to get better, whether or not the current owner gives approval to signing a big free agent this offseason or next. I watch, because for better or for worse, I am a fan, even as I view the future of the team with a critical (but not cynical) eye.

Tell me why you watch in the Comments.

Moving Forward with the Forwards

(Photo by Getty Images)

Matt over at Hardwood Paroxysm emailed me last week to ask me a simple question that has been bandied about on the message boards for quite some time. That question was this: Why not take a stab at Josh Smith? He didn't use my response in his post about the matter, which is great for me, because now I can use it here.

The Grizzlies should probably at least make a cursory call in to his agent for two reasons:

1) To drive up the price that the Hawks eventually sign him for. Nothing better than making other teams overpay for their own free agents.
2) To make the Grizzlies fanbase believe that they might have intended to spend some of their cap space this offseason, even though they have said repeatedly that they were targeting the 2009 offseason to spend it.

Now, as far as them making a legitimate play for him -- this is problematic. Since he's a restricted free agent, the Grizzlies would have had to offer him more than what the Hawks were willing to match in order to actually acquire him. Because they signed Marc Gasol already, the Grizzlies only have about $10 million in cap space for the first year of that contract, which Atlanta would almost surely match.

I don't believe that Josh Smith (or any of this year's young free agents) are max-level players, but that's the kind of contract offer it would probably take to pry any of them away from their current teams. While I'm not convinced that the trio of Antoine Walker, Hakim Warrick and Darrell Arthur will be enough to cover the Grizzlies at the PF position this year, I don't see any reason why they should overpay for Smith either, given that this team is still 2 years away from making any real noise no matter who they choose to go out and sign this offseason.

Besides, there is another possibility that most people haven't discussed. What if Smith (and Igoudala, Okafor, Deng, et al.) decide to just sign the qualifying offer and test the market next summer as unrestricted free agents? Then the market truly sets their real value, rather than having to haggle with an agent, only to see their current team match that offer, leaving you with nothing to show after putting your cap space on hold for a week. This is why the Grizzlies didn't sign Andres Nocioni or Anderson Varejao to offer sheets last year, despite serious interest in them, and instead went after Darko Milicic for a reasonable sum.

Restricted free agency is almost always a fool's gambit. You either overpay, get suckered into a bad deal via trade (Kenyon Martin to the Nuggets, Joe Johnson to the Hawks) or simply waste your time (Corey Maggette retained by Clippers after signing offer sheet with Jazz). The NBA has designed it to favor the "home team" and they certainly succeeded in that regard.

On top of that, even though the Grizzlies would be more exciting and talented if they were able to sign Smith, would they be able to compete with the Lakers, Hornets and Trail Blazers over the next few years with that core group?

Now, as I stated in the email entry above, I'm not sure that I buy into the idea of entering the season with a trio of Warrick, Walker and Arthur, but I know that I don't want Josh Smith as our starting PF for the next 4-5 seasons. I'm a big fan of Smith's style of play...as a SF. That's his natural position, after all. Last time I checked, we already had a decent small forward by the name of Rudy Gay. He needs a backup, but I don't think that's what the fans have in mind when they suggest signing Smith.

I know that a lot of Grizzlies fans (all 11 of us) get a little upset when they consider the ramifications of letting everyone know that we have no intention of making a major free agent signing this offseason, despite the fact that we are the only team with any significant cap space. It sends out a message that seems to plainly say, "we're not going to try to compete this season". I mean, that's what all the media pundits are reporting across the board anyways. I've seen that phrase, or some version of it, on no less than 5 different major media websites in the past week. But just because the Grizzlies aren't throwing cash around simply because they have it, doesn't mean that they aren't being competitive. I'm not saying that I'm on board with what the Three Year Plan represents initially, but given that this is the stated direction of the front office, we might as well accept that and look at moves that fit in with that direction.

Here is my suggestion -- and one that I believe we will be able to see in action over the next two seasons. Why don't we see what we have first? As I noted yesterday, we have two young players at 4 of the 5 positions, with SF being the only one that is without competition for the next season. Conley vs. Lowry, Mayo vs. Crittenton, Warrick vs. Arthur and Gasol vs. Milicic. What if Darrell Arthur -- a consensus Top 15 pick on nearly every reputable mock draft in existence -- turns out to be worthy of that designation, rather than displaying the talent level of where he was actually selected near the end of the 1st round? In other words, what if Arthur proves to be talented enough to be the starting PF as early as next season? Wouldn't that negate the need to go out and sign a player like Josh Smith this offseason? That should be a very realistic possibility, given that he was ranked #14 overall on the Grizzlies draft board and the #4 PF by DraftExpress.


Photo by David Dow/NBAE via Getty Images

In this piece on SI.com, Chris Mannix makes it clear that the Grizzlies front office has very high hopes for Arthur and loves the fact that he has come in with a tremendous chip on his shoulder due to the way that his draft stock plummeted needlessly, taking him from the back end of the lottery to the very end of the 1st round. After all, If D.A. can come in and use that motivation as a positive force (like Paul Pierce did regarding his draft position), then the rest of the league probably won't be laughing at the Memphis Grizzlies much longer. Check back tomorrow for what that future might look like.

If You Show It, They will Come

The Grizzlies rookie campaign ended Wednesday night with a matchup against Al Thornton and the LA Clippers and on WPXX (PAX 50 - the local TV station that covered the Grizzlies rookie league games last summer, you were able to watch...reruns of the Family Feud!


Memphis is sooooo not ready to be a major league city.

Of course this isn't the only time when the Memphis Grizzlies rookie team's games weren't televised in Memphis. The team used to play in the Long Beach Rookie league or whatever it was called. That league had something like 4 teams participating and was not televised anywhere. In 2007, the Grizzlies joined the Las Vegas Summer League and had all of their games televised either on NBA-TV or WPXX. This season, with the addition of OJ Mayo exciting the local fan base and the team being in the midst of a general revival of interest local fans were again blacked out except for the one Sunday night NBA-TV game.

It was unfortunate NBA TV chose the Grizzlies-Lakers rookie came to be a national TV broadcast since the Grizzlies were playing their third straight game and obviously the legs were a little tired. Still the stands were full of fans anxious to see Mayo, Conley and Darrell Arthur for the Grizzlies. The Lakers are a big draw in Vegas too. Apparently the folks running NBA TV thought the game would draw more interest than re-runs of the 1966 Celtics-Lakers championship series. In Memphis the decision is different. It's not like the Grizzlies are like every other team in not covering the summer league either. The Lakers broadcast everyone of their summer league games in LA.

Why did the Grizzlies not get broadcast this season?

According to George Flinn of Flinn Broadcasting the decision was...well actually he didn't say anyting. He wouldn't talk to me but if he had I am sure it would sound something like this.

3SOB: Why aren't you guys covering the Grizzlies Rookie League Games? Was it because you don't think anyone would watch?

Flinn: No. We didn't think we could sell enough advertising to make it profitable. Selling the ad space to cover the expenses of Family Feud re-runs would be easy. Selling enough ads to cover the expense of the buying the game from the NBA Network would be prohibitively more expensive. We love the Grizzlies and want to maintain....

blah, blah, blah. Business. Money. The Bottom line. Why does it always come down to how much profit someone can make? Heisley wants to make money with the Grizzlies. WPXX wants to make money at the station. Local businesses want to make money too. And why didn't Memphis businesses believe that they could reach enough customers by advertising during Grizzlies games?

I think I know why. And I hope this is going to change. After the Gasol trade last year everyone from casual fans to local businesses to the national media believed that the Grizzlies had quit trying to compete in the NBA. The team had relegated itself to minor league status. No one wanted to be associated with a loser and Memphis was the epitome of a loser franchise in the NBA.


All that changed at 11:00 pm on Thursday, June 26th. That was when OJ Mayo, Darrell Arthur and hope all became a part of the Memphis Grizzlies.

If WPXX had the opportunity after June 26th to broadcast the games they probably would have because the advertisers would support the apparent new direction the team was taking. Alas it was too late. The summer league was only 15 days away and there were two weekends and a national holiday in between. There simply wasn't time enough to get it done.

The message needs to be that 'if you show it, they will come.'


People in Memphis understand building a winner takes time. After all the Tigers may have been thrust into the nation's conscience this past year but most Memphians know it took two NIT appearances, a couple of early NCAA exits and two Elite 8 runs to suddenly burst onto the scene last year. The same is true of the Grizzlies. Basically we just signed Dajuan Wagner. There is a light at the end of the tunnel but it's still a pretty damn long tunnel.

Links: Cleaning Out the Inbox (Quick Hit Edition)

Washington Post: Rudy Gay is On the Cusp.

Chance Harper (SBR Forum) on small market realities in Memphis and Milwaukee.

Round 7 of the MVP/ROY Blogger Rankings is up on CelticsBlog for your viewing pleasure. LeBron still has a stranglehold on the top spot, but there has been a shakeup after that. On a related note, the guys at Hardwood Paroxysm have been having a little back-and-forth with CelticsBlog and David Friedman (20 Second Timeout) about MVP voting practices today. Very entertaining.

Pete Pranica's latest blog post.

The Play in California and The Free Throw Line review the trades. Some interesting thoughts, even if I think a few are off-base.

Neil and Vicky took in a Grizzlies game on their travels. You can read about it on Travel Pod.

Ted Sevransky says the Grizzlies are the worst team in the NBA. Guess he doesn't get Miami Heat games in Canada.

Think Chris Wallace is the worst GM in the league after the Gasol trade? At least he's not the Sports Guy. Go read BrewHoop's take on having Bill Simmons offer to be Milwaukee's GM. (via Hardwood Paroxysm)

Blog/Website of the Day: 20 Greatest TV Show Intros

Is This Anyway to Run a Ball Team?

Well the trade deadline has passed and Michael Heisley, Chris Wallace and everyone else associated with the Grizzlies front office is taking a lot of heat from the local fans. Just as fans were buying into the idea that the team was competing soon with Rudy, Miller and Gasol the team suddenly reversed course and decided to rebuild with youth. Then, instead of a total rebuilding effort by trading Mike Miller and Brian Cardinal's ugly contract for expiring deals and the cap space that comes with it, the Grizz stand pat and only do a minor deal involving Marcus Vinicius.

People exploded on the Memphis radio airwaves expressing their unhappiness to Chris Wallace. It has gotten so bad that Bill Walton called the Grizzlies 'a farm team for the rest of the NBA.' The problem with that is the fans still have to pay major league prices to see it in person. Fans are unhappy right now with the losing ways and the prevalent attitude is that the team isn't being run properly.

But is this fair to the franchise?

The Grizzlies lost a reported $45 million over the last 3 seasons (Heisley claims he lost more like $40 million last year alone). Maybe that doesn't sound like much to some people but at the reported rate of $15 million a year it would only take 11 years for the franchise's losses to out strip the money Heisley paid for the team. And remember two of those seasons the team made the playoffs.

This season the Grizzlies cut payroll. It was reported that the Grizzlies payroll last season was $64,451,991. This season the Grizzlies payroll are supposed to be $52,792,812 adjusting for the trades already made. Now these are just estimations and may not be 100% correct but they do put us in a reasonable ballpark most likely. That is a savings of $11,659,179.

That figure alone is more than Forbes reported that Grizzlies lost in the 2006-07 season. Now let's start making some adjustments. First, the Grizzlies last season were above the luxury tax threshhold and had to pay an additional amount of money on top of their salaries that bottom line deduction is gone. Throw in the luxury tax payment paid by teams over the luxury cap threshhold and the decrease in salaries from Jerry West to Chris Wallace, from the half of a season the Grizzlies have been without Andy Dolitch and the team has to be close to break even this year even with the decreased attendance. They may in fact make a profit this year!

And that doesn't include the impact packed houses for the Tigers games will have on the Forum's, and by default the Grizzlies, bottom line as well. Between concerts, shows (and I hope everyone got to see the Cirque de Soleil show this week), Monster Truck rallies, etc. the Forum has had some pretty profitable events lately.

Of course you will never see it reported that way but the numbers seem to imply that breaking even isn't so remote a possibility.

Maybe the front office is running the team like a business instead of a hobby. While Heisley, Wallace and the rest of the Grizzlies want the team to be competitive and challenging in the playoffs it is still fundamentally a business. We as fans may not like to hear that the Grizzlies are terrible but breaking even yet that does seem to be the case here.

If Heisley starts to make money with the team he could use that as leverage to sell the team but more likely he will just keep watching the bottom line and see what happens. He isn't likely to make another mistake like the Brian Davis affair. A profitable enterprise is more likely to attract legitimate suitors to buy the team than one losing on average $15 million a year. Of course the question becomes can the team survive in Memphis even if it is profitable one year if the team can't attract fans? Isn't there a point of diminishing returns? How long can a business remain profitable if is has no consumers? Can the Donald Sterling model of basketball frugality and profits work in Memphis?

Well let's look at the Gasol trade again. What exactly did the Grizzlies receive? The team got a lot of potential cap space to spend on free agents this summer. The team got draft picks to upgrade talent via the draft, a far more cost effective way to upgrade your team than free agency as well. They got a young swing guard in Javaris Crittenton who exhibited a lot of potential to Laker fans before the trade. Memphis fans haven't seen a lot of him yet but I expect they will either this year or next. He is after all a 20 yr old rookie guard. They don't get a lot of burn on any team in the NBA.

Now granted it may not seem like a great idea to run a basketball team this way with a rookie head coach teaching basically rookie players to play in a new system against veteran led teams. Winning probably isn't in the immediate future. The question is what alternative did the team have? The Grizzlies were losing money and games before. Now they are only losing games. Is that an improvement?

Is winning in the playoffs the only way Memphis is going to support this team? Would the city be able to support a team with young talent headed in or at least appearing to be headed in the right direction? Would a team with Rudy Gay, Mike Conley, Darko Milicic, Javaris Crittenton, Micheal Beasley and maybe someone like Michael Pietrus via free agency attract some fans?

Probably as many fans as the Grizzlies are attracting to games now. The bigger question is how many tickets are sold right now that go unused? That is a hidden revenue stream that may dry up. Everyone realizes that the Grizzlies lower bowl is practically sold out but rarely does it appear that way on game night. Will those fans renew this time? Can Rudy Gay and Mike Conley be promotion enought for the season ticket holders? Would those fans wait to invest in tickets if Memphis wins the lottery? Would they wait until the draft? What if Memphis got a Derick Rose in the draft? What about Eric Gordon, DeAndre Jordan or OJ Mayo? What about an intelligent free agent signing this summer? Does it need to be a big name or what? Where is the line drawn where it is not worth the money?

The key question here is will the team be able to survive in Memphis long enough as a business to become competitive as a ball team?

I only wish I knew the answer.