clock menu more-arrow no yes mobile

Filed under:

Question Response

If you read the Quick Chat recap below, you know that I referenced Steve Patterson making a habit recently of describing Blazer decisions in corporate business terms.  I talked a little bit about my view of the "yes" and "no" of that but I also said I'd ask Oregonian business/sports reporting guru Helen Jung a simple question:

What are the differences and similarities between the Blazers and your standard business entity?

Helen was gracious enough to reply.  (She really is a good egg and if you haven't checked out her blog recently, you should!  It's also in the links in the sidebar of this page.)  Helen's response:

I'm totally not an expert on this, and this doesn't get into the detail that you might be looking for -- for instance, considering its membership in the NBA, labor contracts, media broadcast rights etc put the Blazers in a different category of business (although very similar to businesses whose product is talent). I'm afraid that would take a lot more expertise and opinion than I can or should offer. (I do have to steer clear of offering anything that can be construed as opinion, since I report on them and everything). But here are some quick very general thoughts...

It's true that the Trail Blazers organization is like any other business and has to do the math on revenue versus expenses. And they are doing the kinds of things you'd expect from any company -- trying to increase revenue, such as through corporate sponsorships and ticket sales, while trying to reduce expenses, such as through labor cuts (especially since labor, for many companies, is the single largest expense.)

The thing is that there are a couple key factors that subvert the normal laws of financial physics here. By the Blazers' count, the team has lost hundreds of millions of dollars over the years, and is expected to lose another $100 million over the next three years. Not a lot of privately owned companies could or would continue to stay in business with those kinds of losses -- and with no clear path for ever changing that. But with Paul Allen as the owner, the team can keep on going as long as he's willing to absorb the losses.

So while the Blazers are a business, they don't necessarily face the same fate as other businesses when they fail to perform financially.

So some of these measures -- such as cutting four or five staff positions -- will have such a small effect on the projected loss, that maybe the question for Patterson is, why bother? Sure, every business considers its cost structure, but it's a little hard to see how these little measures will really move the needle that much.

I suppose that last bit is part of my larger overall argument too.  The team blew millions of dollars basically ruining itself during the bad years.  I'm glad that dam was plugged.  But now you're so cost-conscious that you nickle and dime your way into the same kind of bad publicity you got when you were spending millions foolishly?  When it was time to fork out for overpaid players, you spent.  When it was time to fork out for perks, you spent.  Now when the financial stakes are small in comparison to those things for you but huge to the public or certain segments of it (as is so in the case of keeping Darnell on at least through the end of the season), NOW you're not willing to pay?  How much is a good rapport with the public (and your own players) worth?  I'd argue that at this particular point in time, given everything that's gone on, it's worth a TON.

I mean, if there's a story behind the story, like Darnell was subverting the coaching staff or something, that's different.  But if this really is financial and was all about getting those numbers off of the books for the year-end report, a pre-Christmas firing of a semi-popular former player who is terminally nice and has a very sympathetic position seems a little...silly.  It's hard to see where that would affect your bottom line as much as the negative perception surrounding it affects your reputation.

Maybe someone who is more an expert than either Helen or I can weigh in...

--Dave (