How the NBA Uses Accounting Strategies to Maximize Losses

Deadspin has an analysis of the NJ Nets’ books from 2003 to 2006 with some interesting tax law and business strategy aspects.  For instance, NBA teams are allowed to take depreciation on players as well as writing off their salaries.  This allows the teams to take a loss on taxes.  Then the teams can then take advantage of pass-through to apply their owners’ other businesses.

Teams can then use those losses to beg politicians for new stadiums and land deals that they otherwise couldn’t get.  Case in point, Bruce Ratner, who is building the Atlantic Yards project in Brooklyn:

[T]he best explanation for why a buccaneering real estate developer like Ratner might buy a middling franchise like the Nets in the first place. As Neil deMause, co-author of Field of Schemes, explains: “If Ratner had gone to Brooklyn politicians and said, ‘Hey, I want to build offices and residential buildings on public land,’ they’d have hung up on him. But when he says, ‘I’m going to bring professional sports back to Brooklyn,’ suddenly here’s [Brooklyn Borough President] Marty Markowitz holding press conferences and sobbing about the Dodgers. [Buying the Nets] helped him get a foot in the door with Brooklyn politicians.”

An interesting and cynical look at the business of sports.

UFC Encourages Its Fighters to Tweet

The UFC is embracing Twitter as part of its promotion strategy.

From MMA Fighting.com:

Unlike other professional sports organizations that have cautioned, not to mention fined, its players for using Twitter, the Ultimate Fighting Championship is encouraging its fighters to tweet as much as possible.
.  .  .  .
At the conclusion of a full calendar year, the UFC will end up paying $240,000 a year to its fighters for their Twitter usage.
So while NFL and NBA players have been fined for tweeting during team functions, the UFC is doing the exact opposite, which is no surprise considering how active White is on Twitter and how he has long been in favor of embracing social media.

This makes sense from the MMA’s perspective.  Take advantage of controversies to build awareness of the brand, the fighters, and the fights.

It encourages the fighters to reach out to their fans and build a more-direct and stronger fan-base.  I think it’s another smart move from UFC boss Dana White.

Sustainable Energy: Sustainable Business Practices

Attached are the term paper and the presentation slides for Sustainable Energy at Rutgers.

Sustainable Energy Paper

Slides

Symbian Closes Its Source Code

Nokia seemed to be making the right move when it opened the source code to the Symbian operating system, which runs on a large number of cell phones and handheld devices.  So when they announced that they were closing their code, the natural question was: Why?

Nokia never reaped the benefits that they wanted from their Open Source strategy.  Nokia was hoping that by opening up the code, other hardware manufacturers and the user community would do the heavy lifting of porting the software to new hardware.

But to get other people to contribute their work, you need an advantage for them as well. What can this advantage be? For Eclipse, most of the companies developing their own integrated development environment (IDE) found it economically sensible to drop their own work and contribute to Eclipse instead. It allowed them to quickly reduce their maintenance and development costs while increasing their quality as well. The Symbian foundation should have done the same thing, but apparently missed the mark, despite having a large number of partners and members. Why?

The reason is time and focus. The Eclipse foundation had, for quite some time, basically used only IBM resources to provide support and development. In a similar way, it took WebKit (which is not quite a foundation, but follows the same basic model) more than two years before it started receiving substantial contributions[.]

(Carlo Daffara)

Also compare Symbian’s Open Source history to that of Mozilla.  After Netscape launched the Mozilla foundation it took years of effort for the critical mass to arise.  Evidently, Nokia had no interest in putting in this same level of effort.

Additionally, Symbian had a disadvantage when compared to some of these other projects. Android is open, mobile, relatively easy to port to new hardware, and increasingly ubiquitous.  Large hardware manufacturers have dumped Symbian in favor of Android.  Google understood the importance of the Open Source community and embraced it.

Moneyball and College Football

Today Bruce Feldman (probably the best college football columnist/analyst out there) wrote about Manny Diaz, the Texas Longhorns’ defensive coordinator’s approach to the game.  Diaz tries to use a “Moneyball-type” analysis, using statistics to get an edge.

Football doesn’t lend itself to statistical analysis as easily as baseball does.  College football has a seemingly endless number of teams, each with large rosters.  Throw in the higher injury rates, the shorter seasons with fewer games, and the physical changes that take place in young players, and it’s a real challenge.  Coaches are always looking for an edge, and these “outside-the-norm stats” give coaches another perspective on the game.

Today’s entry is definitely worth a read.  (ESPN Insider sub required)

Facebook Open Sources Its Server Design

Recently, Facebook opened up its server design.

Both Google and Facebook as competitors in the same industry: advertising.

Strictly speaking, they don’t compete in the hardware arena.

Google’s actions indicate that it believes that its hardware designs give it an advantage in the processing and delivery of advertising.  Keeping these designs a trade secret is to its advantage.  (It is worth noting that they do share some details of its designs.)

In contrast, Facebook believes that using an Open Source philosophy for its hardware gives it an advantage.  Facebook will now be able to receive input from outside designers and take advantage of economies of scale as their designs are produced for more customers.

Jon Stoke’s analysis at Ars Technica is correct in that Facebook “doesn’t have to beat Google to win. Rather, the move will be a success if it only serves to shrink some of Google’s relative advantage. Anything that lets Facebook become more competitive by eliminating some of Google’s advantage in delivering ads cheaply will be a success.”

Ultimately Google and Facebook are both acting as rational profit-seekers, though they have chosen different strategies.