The Waive and Stretch: Revenue Sharing, Potential Jordan Sale, Bogdanovic Extension, And More
What Caught My Attention This Week
Woj On The 2021-2022 Revenue Sharing Numbers
This past Friday, Woj let out a string of tweets detailing the revenue sharing details from the 2021-2022 season. He also put out a story on the ESPN website that you can read here.
Basically, Woj listed out the franchises that either had to pay in or received a cut of the revenue sharing pie. What fascinated me was that this was released at all (as I don’t remember this ever being leaked prior though please let me know if I’m wrong there) and the timing of when it was leaked. Based on earlier reporting, it would seem that the NBA and NBPA are hammering out the final details on the new CBA. Doesn’t seem like a coincidence to me that this report comes out while they are still finishing up negotiations. One conclusion is that the teams that are paying the most into the revenue sharing leaked this to show who’s doing all the heavy lifting, and are trying to resist more stringent luxury tax penalties in the new CBA.
I was also curious to see how the revenue sharing rank of the 30 teams that Woj laid out in his tweets compared to the most recent Forbes valuation ranking that you can see here. So, I put together the below chart showing how each team ranks in terms of revenue sharing compared to their valuation rank. I did back out the luxury tax distributions from the revenue sharing numbers.
Three More Things That Caught My Eye
1. Bogdan Bogdanovic Extension
Last Thursday, it was reported that the Atlanta Hawks had reached an agreement on a veteran extension with Bogdan Bogdanovic. The deal was reported as 4 years, $68 million, with a team option on the fourth year. Because Bogdanovic had to turn down his player option of $18 million for next year in order to agree to this extension, the first year of the extension has to start at least at that number. The year-by-year cap hit is as below:
2023-2024: $18,700,000
2024-2025: $17,260,000
2025-2026: $16,020,000
2026-2027: $16,020,000 (Team Option)
At first glance, I think the deal is fine in a vacuum for both sides. The Hawks face some luxury tax issues, as this deal already puts them in the luxury tax for next year on only 10 guaranteed salaries. But they lock in Bogdanovic for multiple years on a descending deal that could prove to be cheap with a rising cap in the near future, great business to get the team option on the last year as well. As for Bogdanovic, this deal does lock in some long-term money, which is smart at age 30 and his injury profile. It is a little cheaper than recent deals for guys like Norman Powell or Tim Hardaway Jr, but I think the age and injuries probably played a factor there.
2. Michael Jordan Possibly Selling Majority Stake
It was reported last week that Michael Jordan is engaged in serious talks to sell his majority stake in the Charlotte Hornets to Hornets minority owner Gabe Plotkin and Atlanta Hawks minority Owner Rick Schnall. Plotkin is the founder and CIO of Melvin Capital, the fund that famously got short squeezed by Gamestop investors. Schnall also made his money in markets, as he is a partner at Clayton Dubiller & Rice, a global private equity firm. This comes on the heels of Marc Lasry selling his stake of the Milwaukee Bucks at a $3.5 billion valuation. Using the revenue multiple from the Lasry transaction, this would set a valuation of ~$2.67 billion for a Jordan sale, a 57% premium over the most recent Forbes valuation fo $1.7 billion.
3. Ochai Agbaji!
The Utah Jazz are hanging around the playoff picture, currently sitting at 35-36 and 10th place in the bunched up Western Conference. The fact that they are still in the hunt at all is impressive considering they sent out two of their better players at the deadline in Malik Beasley and Jarred Vanderbilt. The continued success is owed partially to the play of the teams young players, especially Walker Kessler and, more recently, fellow rookie Ochai Agbaji. The departure of Beasley has freed up more minutes for Agbaji and he’s started to make the most of it. He is coming off a 27 point night on 6/10 shooting from three in a win over the Kings on Monday night. In his last ten games, he is averaging 13.2 points a game on 58.5% True Shooting in 29.8 minutes per game. Agbaji has shown flashes of being an effective floor-spacing movement shooter, as well as able to get his own shot off the dribble. He’s really starting to pop and looks like another great addition via the Donovan Mitchell trade, along with the breakout performance of Lauri Markkanen.
Fake Signing Of The Week
Player: D’Angelo Russell
Team: Los Angeles Lakers
Deal: 2 Years, $60 million
The Los Angeles Lakers actions at the trade deadline signaled to me that they will act as an over-the-cap team this offseason, thus planning on retaining their own free agents instead of trying to go out and make a splash with cap space. This would imply the team plans on coming to an agreement with D’Angelo Russell this summer. This deal is a little rich compared to where his EPV is or when compared to deals for guys like Terry Rozier, Jalen Brunson, or Kyle Lowry, but the Lakers getting Russell on a 2-year deal would align his contract with both Lebron and Anthony Davis and help preserve future cap space. As for Russell, this would get him back on the market in 2025-2026, the year the new TV money will be kicking in, at the age of 29 looking to cash in again.