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A letter to Paul Allen regarding cost cutting measures

Dwight Jaynes has a good reaction to John Canzano's most recent article on the subject of Paul Allen wanting to "break even" and it got me thinking enough to at least draft a fictional letter to our fearless owner...

Dear Mr. Allen,

    I understand that you have recently requested that you “break even” financially in regards to my beloved Portland Trail Blazers. As a satisfied customer of your product for over almost 20 years I have no problem with you looking for financial relief, especially given the present condition of the economy. Your willingness to take on massive losses for the sake of providing a winning ball club has been well documented and for the most part, you have been a fantastic owner: not selling to a business man (when it seemed like you were very close to selling) who could have hijacked our team and sent them to Oklahoma City for instance; not holding tax payers hostage and demanding they pay for a new building or renovations, paying guys like Steve Francis to just go away, I could go on and on. But now I’ve heard some of your vulcans may be whispering in your ear that the actual product on the floor should be effected by some of the cost cutting required for you to break even. Although this may be nothing but bad rumors, I would nonetheless like to address it and at the same time bring up a few other points about the Rose Garden, the Trail Blazers, and the “fan experience.”


Star-divide

If you are indeed serious about cutting costs related to the Blazers, here are a few suggestions:

1) Fire that DJ/MC  guy who walks around in sweats and a microphone and orchestrates shenanigans like tricycle races for adults. He’s unnecessary and unless he works for free (if you insist on keeping this position I’m sure you could find a blazermaniac who probably WOULD do this crap for free) you shouldn’t be employing this guy to dance around the rose garden trying to hype us up about a 50 year old guy in dress slacks trying to shoot free throws for a gift certificate to Mcdonalds.

2) While we’re on this subject, lets just do away with ALL the side show stuff. Have you done any polling or focus groups on this subject? You’d have a hard time convincing me that people look forward to it, I wouldn’t believe you if you told me people are entertained by it and there’s no way in hell fans come to the game for it. You’re familiar with the term “addition by subtraction,” right? Sure you have, its like when you traded Zbo for Channing and then Channing for, well...nothing. This is like that. This cut would actually add to the fan experience because not only would our senses get a break from all the techno music, we’d be allowed a few moments to talk to the fans around us or even start our own chants/noise organically. Aren’t those the best kind anyway? And I get that sometimes the “cash grab” is sponsored by Wells Fargo and hey, sometimes it IS amusing to watch a couple fatties throw themselves at a pile of 1 dollar bills, but lets consider for a second the idea of having an actual break in the action. A few moments where not much is going on except people socializing/moving around or focusing on the players and coaches in the huddle. Still need to appease the sponsors? “This moment of silence has been brought to you by Standard TV and Appliance!” No? Well I’m sure you could come up with a better way to pimp sponsor X without the blindfolded lady bumping around the court looking for the washing machine. The point is, give the fans a break and save a buck or two in the process.

3) Fire Blaze the freaking Trail Cat so fast his foam head will spin. He/She scares young children and old people, he serves no purpose I can think of (seriously ask a fan next time you’re in the garden if they think he even ADDS to the experience in any way shape or form) and I’ve heard that mascots make something like $70,000/yr. Mr. Allen, I will jump off trampolines and miss dunks for FREE.

4) Kill the non stop migraine inducing “music.” I know I sound like an old man here (I’m 28) but you could save a little more money by doing what virtually all the radio stations have done, by firing your actual DJ and just letting a computer run everything for you. Hell, you could even hire an old lady from the local church to play the organ if you didn’t like that idea. DEFENSE! (Old lady on the organ: Duh Duh) DEFENSE! (Duh Duh). I’m sure she could handle that responsibility and I bet her services would come on the cheap.    

5) I know you recycle the confetti when it falls after every victory, but REALLY? We need confetti to fall from the rafters after we just pelted the Memphis Grizzlies at home? I mean, a win is a win and I love celebrating but is that really necessary?

6) We don’t need cheer leaders and/or dancers. I’m not saying this because I care that some women are offended by other attractive women gyrating all over the place in skimpy outfits. I just don’t think its necessary. How much are you paying to cover insurance on those 90lb girls that get thrown into the air on the 300 level by another 75lb girl anyway? And if I wanted to watch a bunch of bald headed guys in sleeveless shirts with bad tattoos throw a couple of girls around I woulda stayed at the bar I was at to watch the game.

I’m sure I’m forgetting a few things but this post has gotten WAY too long as it is. Basically, a decrease in frivolous spending can be made without taking away from the product on the court. Or at least what SUPPOSED to be on the court. I trust you will do whats right for this organization.

Comment 18 comments  |  3 recs  | 

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You are dead on

When I first saw the title of this post, I thought it was a plea to sign Brandon quickly.

* Building a Greg Oden Fanboy Treehouse Clubhouse this summer...

by OdenFanBoy on Jul 11, 2009 3:40 AM PDT up reply actions  

Right on!

John you are SO right on about all the hooplah at the games. I would so much rather sit at home or at a bar and watch the game rather then spending 3 hours being completely distracted by antics, cheerleaders, and other luxuries. I went to my first Blazer game last year (as I am an SF Bay Area transplant), and I was pretty shocked by how upstaged the actual game was by all of that craziness. I’ve taken the Blazers to heart now and if the money saved by cutting all that out could go to giving Brandon a max 5 years or signing Millsap then I would do it in a heartbeat! However, something tells me that it wouldn’t add up.

- Matt

by thorfio on Jul 10, 2009 1:33 PM PDT reply actions  

sorry if the first paragraph is misleading

thats all me, I was just referencing and linking my motivation for the post…

The Blazers as a whole are far more like my wife than like me in the sense of their physicality on defense.
-Dave

by chrischa on Jul 10, 2009 4:01 PM PDT up reply actions  

Reposted from another thread

I did some research on this awhile back, if anyone has more info, (since some of this is a year or two old) please feel free to add/correct what I found. But basically PA is fine, the Blazers are very close to making money, and will as soon as next year be in the black again.

Wow, okay it appears that this is not common knowledge. Last year the avg ticket price at the RG was $61.21, that doesn’t include suite’s or comp tickets. The Blazers avg about 17,000 paid customers per game, that is about $45.2 million per season in ticket sales alone, give or take. (road teams get a part of the gate, but it should about wash as the Blazers get their part of the gates as a visitor as well).

Then add in the consessions, parking, gift shops, etc..the NBA doesn’t seem to release these numbers, you have bet that they are at least $10-20 bucks per seat on avg. Then you have to factor in that the total amount of people in the RG, which is closer to 19,000+. If that is the case, then using $10 per seat that is another $7.79 million in change per year, giving a total of about $53 million, and that is conservative.

On top of that the league’s TV deal nets each team about $28 million per year, the Blazers local deal with comcast I hear was about $10 million per year, if those numbers are good that is a total of about $91 million. And we still havn’t talked about suite money, corporate sponsorships, money from league merchandising, etc… which can all add up to more than $25 million per year even for a small market team like PDX.

So the Blazers, even on a conservative estimate, are pulling in $116+ million per year in revenue, which makes it easy to see why PA was losing so much money back in the early 2000’s. But after this year, when they are no longer a tax paying team they will start getting money back, (teams who don’t pay the tax, get the total tax paid back, minues a few dollars for the league), which could be a $5 or even 6 million dollar swing easily.

With the Blazer payroll slated to be between $55 and $60 million for the next few years, that leaves quite a bit of cash for PA to pay the people who operate the RG, KP, Nate, and all the front office staff, it even leaves him enough to pay his light bill.

This team is sitting pretty for the future, it is the past that has cause it to still bleed a bit of red ink, not the present and the future is looking very good.

by usmcr3049 on Jul 10, 2009 1:41 PM PDT reply actions   1 recs

Any Idea What

KP and Tom Penn make per year?

Ball Don't Lie

by bothteamsplayedhard on Jul 10, 2009 1:46 PM PDT up reply actions  

There is nothing concrete

I can find, but lots of rumors that the average NBA GM makes between $2-5 million, with some of the lowest being paid $1 million per year.

As an assistant GM, Penn likely makes just less than KP, but not much since the team just resigned him to keep him. My guess is that between the two they make $5 million or so.

by usmcr3049 on Jul 10, 2009 2:35 PM PDT up reply actions  

A few clarifications...

1.) The above fanpost is a gross over-simplification of the fan experience. By being a reader of BlazersEdge, it would seem to imply that you’re a “rabid” basketball fan, whereas the dancers, cheerleaders, mascot, and kids games are marketed to an entirely different (but equal paying) fan base. That 13-year old girl who gets dragged to a game for bonding time with her overworked dad? Her tickets cost just as much as yours, and she may enjoy the “sideshow hoopla”. Similarly, if you don’t like the dancers, they only perform during time-outs, right? Go get another beer! You’ll miss the dancing, you’ll miss the loud music, and once the sweet, sweet nectar is finished you’ll probably have more fun anyway.

2.) Todd – the sweatpants wearing ‘hype man’ who handles the McDonalds Races and also selects BlazerDancers – is also responsible for a large portion of the videos produce during games, whether it’s replays or “Let’s Grill, let’s grill, let’s grill ’em” videos, he’s pretty much Johnny-on-the-spot. Personally, I enjoy these videos and replays very much. So please understand that numerous positions have a great deal of responsibility behind the scenes before you go around asking for people to be fired.

3.) A date with Blaze helped raise nearly $1,000 for Oregon-based Orphans last year. Have you ever donated to help out Oregon’s Adoption Programs? Has anyone ever paid you for a date? The mascot may make a lot of money, but he also helps ease the burden of public appearances on the players. Kids almost always love the mascot. Granted – I’m not in love with a “Trail Cat” either, but a mascot is a necessary evil.

4.) It is commonly mistaken that salaries of players and coaches are the only two things an NBA team needs to be successful. This is far from the truth. The Portland Trail Blazers are a business that operates exactly like any other. There’s a sales team (all of whom are paid), there’s a full marketing department (which features the occassional unpaid intern and numerous other full timers – like Casey Holdahl) and then there’s the gameday staff that works it’s collective tail off trying to produce a respectable product come tip-off. Even if this cost was an extra 5.5% of total revenue (low for most companies), that’s $6.38 million extra dollars (more than the MLE!) in salaries outside of the immediate basketball product.

"Now, you take a bobcat or a Jayhawk. You know they'll run if you give 'em the chance. But when one don't run, why, you shoot him and shoot him quick. Raef's my dog, Pa. I've gotta do what's right..." Old Yeller (1957)

by RoyGoesTheDynamite on Jul 10, 2009 2:10 PM PDT up reply actions  

I am guessing

this was a response to the OP and not to my post?

But as to point 4 of yours, which does someone reply to my point, I agree totally. I wasn’t trying to give off the impression that the Blazers are making money hand over fist, or that I covered every single expense of the franchise. I was only trying to show how much the Blazers as a team make per year, (not including alot of items, like arena sponsorship, or the money PA gets from concerts and the like that use the RG).

In my last paragraph I talked about how I felt there was plenty left over to pay the people who run the RG, etc… well I meant everyone that was paid by the Blazers, so all of the front office, the ushers at the games, Todd, (who does a pretty good job in my opinion), Blaze, the announcing crews for TV and Radio, and their behind the scense crew, as well as the courtside crew. There are of course more that I have not mention. My point is there is enough to go around.

by usmcr3049 on Jul 10, 2009 2:18 PM PDT up reply actions  

Yeah... Wrong place...

But you also have to understand that these are billionaire owners who can just as easily invest in another product. How many sports franchises make money? I believe it was few and far between according to Forbes.com, but I can’t find the article off hand.

Owning a sports franchise is a very expensive hobby. It’s not a profitable enterprise (although the organization should appreciate over time) and, in my opinion, we should be grateful that Paul Allen hasn’t pulled the plug altogether and invested in something like Classic Cars (which appreciate more over time than your average mutual fund).

If he wants to “break even”, that’s a pretty low target for a successful operation, right? How many companies start the year off saying “Hey, this will be a successful year if we can break even! Think we can handle that?”

Most companies have a profit marging of at least 1% (grocery stores) up to 50% (apartment complexes and various other real estate – prior to the current melt down)…

"Now, you take a bobcat or a Jayhawk. You know they'll run if you give 'em the chance. But when one don't run, why, you shoot him and shoot him quick. Raef's my dog, Pa. I've gotta do what's right..." Old Yeller (1957)

by RoyGoesTheDynamite on Jul 10, 2009 3:19 PM PDT up reply actions  

Me!! Me!!!!!
How many companies start the year off saying "Hey, this will be a successful year if we can break even! Think we can handle that?"

Sports team owners make their money on the buying and selling of the franchise.

"A bizarre and extremely rare hybrid Blazer/Laker fan, Timbo has always struggled to contain the Beast Within, like Dr. Jekyll, Bruce Banner, or Ted Kennedy." — Miled Animal

by timbo on Jul 10, 2009 7:17 PM PDT up reply actions  

Paul Allen

bought the Blazers for $70 million, and today they are worth $300+ million. That is a nice profit.

by usmcr3049 on Jul 15, 2009 1:44 PM PDT up reply actions  

you think that little girl bought those tickets?

1) you market to the people who are spending the money, not the kids they may or may not drag along.

2) I enjoy some of the videos too, but any nerd in the back room can manage that. we don’t need an MC.

3) Blaze earned $1000 for a charity? Great, can he do it 70 more times a year to pay for himself?

4) I don’t believe I said anything about cutting merchandise or marketing outside of the arena

The Blazers as a whole are far more like my wife than like me in the sense of their physicality on defense.
-Dave

by chrischa on Jul 10, 2009 4:18 PM PDT up reply actions  

Big Ben,

That is one excellent manifestation of my frustration.

* Building a Greg Oden Fanboy Treehouse Clubhouse this summer...

by OdenFanBoy on Jul 11, 2009 3:46 AM PDT up reply actions  

While I Agree with the whole no frivilous spending saving money....

We saw some magicians at the Rose Garden who did an act like this one

http://www.youtube.com/watch?v=4EAKgsNcL4U&eurl=http%3A%2F%2Fvideo%2Egoogle%2Ecom%2Fvideosearch%3Fq%3Dmagicians%2Bchanging%2Bclothes%2Bat%2Bthe%2Brose%2Bgarden%26hl%3Den%26emb%3D0%26aq%3Df&feature=player_embedded

and still to this day my wife and 2 daughters, not to mention myself, are blown away. Atleast during all the damn timeouts there is something to see. But heck, im usually running to get a drink or take a leak so I miss alot of the performanx\ces anyways.

by cavejunctionblazer on Jul 10, 2009 2:00 PM PDT reply actions  

I was with you

Until number 6. No… no… and no.

I like the stunt girls and i like the cheerleaders. My girlfriend and I would be very disappointed indeed to lose out on the pleasure of the blazer dancers.

if the financial impact is extremely high, reduce the number of costumes, cut back on the number of dancers. Do not eliminate them. If the costumes are too expensive, I’m okay if we just do away with that completely. and just paint them in team colors.

Also, as another side point. Many companies seem to freak out and attempt to find ways to cut costs. What about the flip side of the coin and focus on increasing revenue? Do you think new companies are attempting to cut costs? no… they’re out there attempting to drag in new clients. if a company is looking at cutting costs, you can do that until the company no longer exists. However, that generally isn’t good for the business after a certain point.

"Fernandez, to my eyes, is the Blazer who walks that walk most comfortably. A lot of Portland's fans (egged on, dare I say, by their local broadcasters) lament things like how Ron Artest or Yao Ming get to hit Brandon Roy's arms.

But I suspect Fernandez sees all that and thinks: We get to hit arms! Cool!"

http://myespn.go.com/blogs/truehoop/0-39-135/On-Playoff-Experience.html

by ratbastird on Jul 13, 2009 12:27 PM PDT reply actions  

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