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Interview with Mike Golub, Pt. 1

"I like to think that I've got good karma." ~ Trail Blazers COO Mike Golub

In many ways, Portland Trail Blazers Chief Operating Officer Mike Golub is a lot like you.  He reads Bill Simmons, he has memorized the home/away record of the Blazers, and he believes deeply in the importance of attracting high-character players to the organization.  However, there are, perhaps, a few differences too: namely, his Ivy League education, his two-plus decades of experience in sports, the flat screen TV in his office, and the fact that he reports directly to the man that reports directly to Paul Allen.

While it's fun and relatively easy to play Imaginary General Manager ("Trade the pick!") -- it's no walk in the park to bestow upon yourself the daily responsibilities of Mr. Golub.  If you were sitting in his chair, you would oversee all financial aspects of a very, very large organization that is competing in a cutthroat industry where lottery ping pong balls and injured ankles can make or break millions of dollars.  You would have total oversight over ticket and merchandise sales, corporate sponsorships, and media deals.  And, oh, by the way, if anything goes wrong, you're answering to the co-founder of Microsoft.  In short, your blood pressure would be roughly quadruple what it is now, you'd need an extra couple of cell phones, and you'd probably quit or get canned within, oh, six hours.

This week, Mr. Golub was kind enough to welcome Blazersedge into his office at One Center Court to discuss what it takes to run the business side of an NBA franchise.  It should be noted that, despite all the pressure, he carries himself with an unmistakable joie de vivre. 

Due to the length of the interview, we'll be running this conversation in two parts.

In Part I, running tonight, we discuss:

  • His career path prior to the Blazers.
  • The relationship between Basketball Operations and Business Operations within the Trail Blazers organization.
  • The importance of professional facilities and the potential global expansion of the NBA.
  • Whether the rookie scale contract system should be changed for Europeans like Rudy Fernandez.
  • The Sonics leaving Seattle and the potential aftermath.
  • Whether the NBA is "recession-proof."

In Part II, running soon, we will discuss:

  • The latest on the Comcast deal.
  • The launch of 95.5 The Game.
  • Forthcoming online developments.
  •  Whether Paul Allen is, in fact, the best owner in professional sports.

Without further ado, here is the transcript of our conversation.  If you are a true fan, you will cowboy up and read this thing word-for-word, especially if you are interested in a career in sports.  Mr. Golub was kind enough to speak openly and honestly about a number of topics; he drops some serious, serious knowledge.

Blazersedge: Surely it's not an overnight rise to your current position.  How did you get your start in sports?

When I was in college at Dartmouth, I thought I was going to be a lawyer.  But, I just came to the conclusion that I needed to spend my professional life doing something that I really love, in an industry that I just want to inhale. Really since my senior year in college I've been dedicated to being in sports.

My first job I got really lucky, I hustled, but I got really lucky -- I was a production assistant for MLB Productions, the television arm of the league. I started off as a schlep but ended up in a couple of years producing This Week in Baseball, producing the official World Series film, producing baseball programming for the league. But I really wanted to be on the business side, less so on the production side.

So I decided to go back to business school, which I did, to get my Masters in business with the intention of staying in sports.

Blazersedge: Today there are full Sports MBA programs.  Was that the case back then? 

It's interesting, no. There were sports masters programs, a couple then. UMass. Ohio University. But not the sort of proliferation of programs that you see now. I just wanted the best possible postgraduate business education I could get. So I figured if I could go to a really good school, which I ended up being lucky enough to do, Stanford, I could go to a really good school and get the best education and it will serve me well. 

Stanford is a wonderful place and they have a great career management division for its students but at that time it was totally not geared up to sports. I had to convince them to buy this resource book... now... I'm going back for my 20th reunion, and now there is a sports marketing club as the business evolved so has the ways that people can prepare for the business.  I was a bit on my own there.

Blazersedge: I imagine the MBA set you on a new path professionally?

I became director of marketing for the Oakland Coliseum, where the Raiders played and the A's played. It was a great time to be there. It was Run TMC, Mitch Richmond, Chris Mullin, Tim Hardaway, McGwire, Canseco, it was before San Jose Arena was built so we got all the concerts.

In retrospect, it was a wonderful post-graduate school experience because the facilities piece of this business is so vital. If you look at what's happening in Seattle [with the Sonics] it's all about their arena deal. Even what we went through a few years ago, it was all about the arena deal.

Because the economics of this business is so challenging because player payroll makes it so hard for franchises to even break even or be profitable, you have to have a good arena and building situation. Having had the experience of running and marketing a facility that had two professional sports tenants, was a wonderful training ground, because I really got to understand how the arena business works from the ground up. What it takes to run a successful facility and how integral that is to deliver to the fans the experience they need.

From there, I went to the NBA where I ultimately ran the events crew- we ran the All-Star Game, the NBA Draft, and all the international games, and all the Dream Team games. One of the early projects I had was here in Portland, we did the Dream Team Tournament of the Americas, and the first ever NBA Draft outside of New York. I spent a lot of time in Portland and worked very closely with the Blazers and was here all the time and just fell in love with Portland. I was here during some of the Finals games that year in 1992 and just really got swept away by the area and the city's love for basketball.

At the time, the sport was booming. It was Magic, it was Larry, it was Michael. The sport was just exploding. It was just really a privilege being a part of the league at the time. But it was a grind, travelling my butt off, working my butt off.

Then I got the opportunity to start up a sports group in sports marketing called Nike Sports Entertainment that they were just launching. The idea of coming back to Portland was really appealing to me. We started this group that ran large events for Nike with Nike athletes. We did golf tournaments with Tiger Woods; soccer matches with the Brazil soccer team; we brought Michael Jordan and Charles Barkley and others to Asia; and we did track and field in Australia; we did the world volleyball championships in Los Angeles; so we ran these events that we, Nike, owned and controlled.

Blazersedge: Was it brand development or personality development? Were you trying to sell this athlete to a new market or just out there spreading the Swoosh gospel?

More the latter. It was taking these deals that we had with the athletes and trying to maximize their impact and their value. So paying all this money to Brazil for the rights, well let's get events rights and see if we can expand the relationship and expand the value. It was really fun and ultimately it was something that Nike decided to not continue to support. It was a small piece of a much, much larger business and it didn't quite fit with what they wanted to do. But it was a wonderful experience and it got me back out here.

From there I went to the Grizzlies in Vancouver. It was a wild time because we went from trying to rebuild that team to suddenly be in a position to move-we were the first team to move NBA cities in over 15 years. We took it to Memphis, first ever pro sports team, built a new arena, really launched a brand-new market. It was a start-up team, essentially, and we built an amazing new arena. The team won and made the playoffs for the first time in its history.

From there, I went to the New York Rangers, the year of the lockout, and we made the playoffs for the first time in 9 or 10 years. I like to think that I've got good karma. I go to the Grizzlies and we go from the worst team in basketball to a 50 win playoff team in a few years; the Rangers hadn't made the playoffs in 10 years; and here, the Blazers, the year I came we were coming off 21 wins to 32 wins to 41 wins and who knows where we go from here.

I grew up in New York, going to games in the Garden, being a Rangers and Knicks fan, was really cool. It's a challenging  place.  Put it this way, I like being in Portland a lot relative to New York and I like the Blazers organization a lot. I started here in October of 2006 and its been just a great run to be able to be part of a team of people that literally turned things around here, it's been really satisfying.

Blazersedge: A couple months ago, Chris Bowles talked with us about the turnaround.  He said that "basketball operations and business operations got on the same page at the same time"  and he painted it as a rare occasion in professional sports where that happens.  How would you characterize the difference between the two sides of the business? Is there a dichotomy there? Is it two separate entities? The side that's trying to win games and the side that's trying to make a profit? Or is it two heads to the same monster?

We are one company and, Chris is right, that's not always the case in pro sports. There are teams where there is a complete wall between the two sides - and that's not just in basketball.  

Kevin, Tom and Nate are just unbelievably great to work with.  The fact that Kevin and I all report up to Larry Miller - we have one person overseeing both sides of the organization and that's huge, and again that's not usually the case.  We realize on the business side there's nothing more important than the product we put on the floor, the players, and our coaching staff, and our games, and what happens between the lines is the core of what we are.  And that is paramount.

At the same time, I think they realize for them to do their job and to have all the resources that we have to do our job, which is telling people about our team, communicating to people about our team, and providing the platforms for people to connect with our team. Broadcast, internet, in the game, in the community, that's how people touch and interact with the team. We've gotta be able to do our job at bringing our players and our team and our game to the people in the best, most entertaining way we can. They understand we have a job to do.

So I think there's a mutual understanding and respect that happens. So they know that what we do in the community is so key.  To make the most impact, we need the cooperation of the players and the coaches. And they're going to provide that.  We know that during March and April when we are fighting for a playoff spot, we're not going to ask them to do those kinds of things. It's just an understanding. It's a great dynamic between basketball and business. Just really healthy and it starts with the fact that Nate and Kevin are just really fun, just really great human beings, and great at what they do. 

It's funny, you would think [combining the basketball side and the business side] would be a really easy to do, but a lot of teams just don't quite get it right. I think it's a big part of our success.  Our "Make it Better" campaign came from Nate! 

 And, don't forget, we have a great bunch of young guys that get it. They get it. Brandon is in Rose Festival Parade this week. He gets it. Greg is in the Junior Parade. They get the importance of being connected to the community and they get the importance of all the things they do off the court. They know it's part of their job. It's like any organization, you just have to have everybody on the same page. Everybody aligned. People understanding and respecting other areas. When that happens, cool things can happen.

 Blazersedge: Clearly, Mr. Pritchard is very hands on. Coach McMillan is a very hands-on coach. Is it a different relationship that you have with the team given your role on the business side? Do you tend to keep the players more at arms length or do relationships develop spontaneously?

We just don't have as much interaction as the basketball side does. A bunch of us on the business side have relationships with the players. They know us, we know them, we work with them off the court, but we just don't spend as much time with them and we're not part of their daily lives as Blazers, but we see them a lot. We have players that come to our staff meetings and community appearances so they get to interact with a lot of folks on the business side. But it's different. They see guys on the basketball side everyday during the season and travel with them and it's just a different relationship.

Blazersedge: Let's step back for a second to what you said earlier about the arenas and how they are a driving force of where the league is going.  Earlier this year, Commissioner Stern said that Europe would be a place he would be interested in expanding to.  This past weekend, he noted on Bob Costas' radio program that London and Berlin will soon have new basketball-ready stadiums.  Do you see expansion to Europe as a viable option for the league? Is that really on the table in the short to mid term?  I ask because the Commissioner does seem to hedge back and forth on this issue in various interviews.

When I first started with the league 17 years ago, Europe was a big part of their strategy then. Business has grown exponentially. It started as television distribution, now the NBA is in 220 countries. It started with merchandise and the licensing business has taken off. It started with playing games and now there are games throughout Europe, Asia and China, regular season games in Japan. The sport itself has become enormously popular worldwide.

The next stage of that evolution is the notion of the European-based team. Commissioner Stern is on the record as saying its something he would like to see happen. What the league's timetable is unclear. He says its no different flying from New York to LA than from New York to London. Heretofore there weren't NBA ready buildings in Europe. There's a nice building in Paris but its not quite NBA ready. But now with the advent of a couple of world class arenas, it creates a new generation of arenas that might change the playing field for European expansion.

So I think that's a big piece of the puzzle that the league and David continue to want to move towards. When and exactly how I don't think it's clear.

Blazersedge: When it comes to this year's owners meetings, some have argued that there should be a discussion about amending the rookie scale contracts to make provisions for handling European players.  Someone like Rudy Fernandez is being offered millions of dollars more than you are able to offer him under the collective bargaining agreement.  Is the Blazers organization in favor of restructuring rookie contracts to make exceptions for European players, say, who are older than NCAA freshmen?

I don't think the league has any designs to alter the salary cap structure to handle that. If you look at what's happened, just take the Blazers.  It took Arvydas Sabonis a long time to get here. It's just not the case anymore. The best players in the world want to play in the best league. There really hasn't been any recent situation where that hasn't happened.

When it comes to Rudy, we are hopeful that he will play here next year.  Getting him here this coming season was always our desire. We've been shooting for this year and we're hopeful that's going to be the case.

I think the system is working, generally speaking, the best players are playing in the best league in the world. I also think the pipeline in the other parts of the world is pretty healthy for the most part.

Blazersedge: Is an issue like this perhaps the result of the media and fans running a little wild and being impatient with the pace of complicated international negotiations?

In Rudy's case, he's just a really high profile player. He's one of the most popular athletes in Spain. He's one of the best basketball players not in the NBA. And so it's a high-profile situation. I think [the media attention] is understandable.

Blazersedge: So in his case you just charge it to the game and realize the scrutiny will be there no matter what?

Soccer has been going through it for years. On a much bigger scale and a much higher magnitude. Baseball too: the flow of players from Latin America has certainly been there and now you see many more players from Korea and Japan. 

So, I think the system is working and the economics usually take care of themselves. I can't speak for the league as a whole but I think their position is that the growth in international players will continue and that the system is working because the best players are coming to the NBA.

Blazersedge: A little closer to home, there has been quite a fracas up in Seattle this year over the Sonisc potential move to Oklahoma City.  I would characterize the Blazers as being relatively quiet regarding that situation. Was that intentional in trying to keep some distance, given that Seattle's internal struggled wasn't directly impacting you? Certainly, there is a rivalry and a ton of regional fan interest. Looking back would you change anything how your response played out over the last six months?

If you asked us at any point in the process, over 40 years of tradition, 40 years of a franchise existing up the road, a great rivalry, a great tradition, a city like Seattle, the caliber of the city, the size of the city, they should be home to an NBA team. Especially given the long legacy that the Sonics have. We voted against the move.

We're in a special situation vis a vis Seattle. In an ideal world, they would get the arena they feel they need to compete and they would stay. And we would continue our rivalry. But it looks like its unraveling. It looks like a matter of when they will leave.

On one level that's very sad and disappointing. On another level, we've got to be pragmatists and say, "OK, if they ultimately leave, what does that mean for the Trail Blazers?" Can we distribute our games on broadcast? Can the Blazers be to Seattle what the Seahawks and Mariners are to Portlanders? A lot of their audience, especially the Seahawks, because it's less of a commitment. Over time, could we become that? Could we begin to draw from there? Could we take sponsorship deals and make them more regional?

Yes, yes and yes. It represents some opportunities for us should the Sonics leave and we are looking at that and we would be silly not to. We have mixed emotions about that whole situation.

Blazersedge: TV ratings have been way up this year, Blazers tickets sales are way up this year, all while so many of the economic indicators in America are negative.   For the last six months there has been talk of a "recession." Would you say that the NBA is a "recession-proof" entity or do you see things like tightened consumer spending trickling down to your fan base?

It is a scary time for a lot of people around the country. The credit crunch. All the issues surrounding the economy are challenging.

If you look at it, historically, the entertainment business during down times, the depressions-people need outlets, they need ways to entertain themselves. Is the entertainment and sports sector somewhat immune to the cyclicality of the economy? Yes, I think so to some degree.

The investment of going to Blazers games varies quite a bit-we have season tickets from $9 a game to very, very expensive tickets. For many of our season ticket holders, it's a big investment. In money and also in time. It's something that we look at a lot. 41 nights -- and hopefully more-- next year.

So far this offseason, our ticket renewals and new sales have been very robust, people are clearly excited about the direction of the team and the future. We haven't yet seen any manifestations of the economic situation affecting people. We are very grateful for that. But we'll see.

Blazersedge: Do you anticipate concessions or other revenue streams being affected down the road? Maybe someone goes into the arena to see Greg but then keeps his hand on his pocket the whole night.

It's certainly possible but I don't know. My sense-and this is totally unscientific- is that people in Portland yet haven't really felt the same crunch that other markets have, largely because the housing and credit problems haven't affected Portlanders' optimism.

It's something that we are watching for sure.

We raised our prices this year, but cautiously and reasonably. People understood and reacted positively. Same thing with concession prices, we are going to be very cautious even though food prices and everything else is increasing, we are trying to be very sensitive and reasonable there too.

Sponsorship business is one that we want to continue to grow and companies who are facing economic pressures-will they be cautious with investing in the Blazers remains to be seen. So far it hasn't been the case. People who love the Blazers, LOVE the Blazers, dearly. We have a place in people's hearts and minds here, when we are doing our job right, that is unusual. People have this intense, personal, emotional relationship with the team and we are so grateful for that.

I think it's a different set of decisions for people. It's not, "do I get my oil changed?" It's a personal, emotional decision that's different from how people spend their money on other things because the marriage between Portland and Oregon for that matter is pretty unique. The franchise and the city and the state grew up together, came of age together. We are the only team in town.

We are perceived, for better or worse, as a representation of Portland. People's perception of Portland around the country is affected disproportionately, one might say, by the Blazers and we take that pretty seriously. I do think that's a special relationship that is more akin to the Green Bay Packers than perhaps any other team. We are the city and the state's team. if we do our job right and continue to connect with the fans I'm hoping we can weather any economic forces.

-- Ben (