Random Thoughts 

The NBA playoffs, money and power, and the allure of Tunica.

I was just wondering:

In the locker room at the Racquet Club Sunday, the NBA playoffs were on the big-screen television most of the afternoon. I ducked in three times. Not a single person watching. Yes, it was Mothers' Day. Yes, it was a beautiful day outside. Yes, people were playing tennis, golf, working in their yards, or doing something else. Isn't that the point?

· We don't know exactly where the money to build a new arena and keep it running will come from, but we sure know where most of it will go: to player salaries. We're bringing a corporation to town with fewer than 50 employees. The 12 highest-paid employees make from $1 million to upwards of $7 million a year. All of the rest combined make less than the highest-paid player. Maybe the players will live in Memphis and maybe they won't. This is economic impact?

· For $250 million, why doesn't Memphis just go out and buy someone else's corporate headquarters, build them an office at Shelby Farms, and get 1,000 jobs instead of 50?

· There's a new book about casino gambling called The Money and the Power: The Making of Las Vegas and Its Hold on America, 1947-2000. It is righteously anti-gambling, dismissing it as a corrupt, wasteful pastime for suckers. Why does a business that spends billions in a state like Mississippi, creates thousands of jobs, discloses its finances, asks for few public incentives (the Tunica jet airport boondoggle is a glaring exception) get vilified, while pro sports get a free ride?

The Money and the Power discloses that slot machines are sucker games, weighted in favor of the house. Where did I first read this shocking indictment? Let's see, oh yes, it was the 1995 Promus annual report, which said 70 percent of the company's profits came from the Harrah's division, and 80 percent of casino profits come from slots and low-dollar blackjack.

I have been to Tunica close to 100 times since Splash opened years ago, usually as a reporter, sometimes as a gambler, often just to gawk. The image of slot players as dumb suckers seems as false to me as the beautiful, giddy models in casino ads. I think it has something to do with a bias against people who wear ballcaps and bermuda shorts and have varicose veins.

· What do you call someone who goes to the casinos 45 times a year, spending $50 to $75 each time, or $2,250 to $3,375 a year? A compulsive gambler. What do you call someone who goes to an NBA game 45 times a year, spending $50 to $75 each time? A season-ticket holder.

· Few businesses are more secretive about their finances than the NBA. Want to know what Grizzlies owner Michael Heisley made in total compensation last year, or what the team made, or how that much-quoted figure of $45 million in losses was arrived at? Good luck. Want to know what the head of any public corporation made last year, or how many shares he owns, or where the cash flow went? You'll need a little patience and a good pair of eyeglasses, but it's all in the public documents.

· Is there anything more annoyingly simple-minded than those "I Want My NBA Now" commercials?

· Which is more intelligent and thoughtful: the naysayer-NBA letters to the editor or the PR agency-driven NBA hype?

· Weren't you sort of proud of the television reporters who badgered Michael Heisley with tough questions when he tried to make a feel-good appearance at Neely's Barbecue a couple weeks ago?

· Has there been a more stunning political transformation than former mayor Dick Hackett, friend of the little guy, to Dick Hackett, NBA booster (from the safe confines of DeSoto County)?

· Staley Cates, one of the proposed co-owners of the Memphis Grizzlies, made a fantastic presentation last week at the Longleaf Partners annual meeting at Memphis Botanic Garden. Cates runs one of the mutual funds. It was straightforward, totally devoid of hype or jargon, and full of common sense. You left the meeting wanting to buy more shares. Cates and his partner Mason Hawkins treated shareholders like intelligent but demanding partners. Isn't that what the NBA skeptics want? Why Cates & Co. are being so secretive about their part in the NBA is one for Ripley's.

· Longleaf's investment principles are: price-to-value ratio and no more than 20 holdings in any fund. Cates and Hawkins said they hear only two or three really good investment ideas a year. They reject 99 out of 100, often because they admit they don't really understand the business or they don't like the management. Their funds returned an average of 25 percent from April 2000 to April 2001. Wouldn't you like to hear these guys make the case for the NBA?

· On the other hand, maybe the NBA wouldn't fare so badly in a price-to-value analysis. The Los Angeles Times reported Sunday that confidential NFL documents reveal that pro football, at least, is a "robust enterprise that gets more so each year as team after team moves into new or renovated stadiums, many paid for by taxpayers." The Cleveland Browns, the worst team in the NFL, made a $36 million profit in its first year thanks to a new publicly funded stadium. The new NFL franchise in Houston, former home of the Tennessee Titans, went for $700 million in 1999 a 47 percent increase in the asset value of the Cleveland franchise, which went for $476 million in 1998. ·

You can e-mail John Branston at branston@memphismagazine.com.

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