Tom Penn was the assistant GM for Memphis from 2000-2007 and then the Vice President of Basketball Operations for Portland from 2007-2010. He now works as the "capoligist" for ESPN.
On PTI today he not only said there was a 75% chance of no basketball this season, but said definitively that during his tenure with Memphis and Portland they did not make a profit. Even in Portland where they were right at the cap, selling out every game, getting solid local tv ratings, and making the playoffs they couldn't turn a profit because their market was just too small.
Not exactly a good outlook.
Uh, "right at the cap?" For a numbers guy, you'd think Penn would have a better grasp of things. Portland was a luxury tax-paying team nearly every year Penn was with the team.
2007-08 payroll: ~$75 mil
2008-09 payroll: ~$80 mil
2009-10 payroll: ~$56.5 mil
2010-11 payroll: ~$75 mil
http://www.eskimo.com/~pbender/misc/salaries11.txt
(see salaries10, salaries09, etc. for other years)
Additionally, IIRC, Portland made buyouts and bought draft picks in many of those years.
Paul Allen has deep pockets, and loves owning an NBA team. Portland may be a "small-market" team, but they don't have any problem spending money.\
Also, I suspect that this episode had something to do with the losses that the Blazers were incurring after 2007, when Allen reacquired the Rose Garden Arena:
http://en.wikipedia.org/wiki/Rose_Garden_arena_bankruptcy
You raise a valid point. However, the response that comes to mind is -- so what? Ostensibly, the Blazers were spending that amount of money in order to be a competitive (playoff-caliber) team. Because they were in a relatively small market, spending that much money resulted in them losing money.
If the Blazers have been losing money despite doing what it takes to field a competitive playoff-bound team for the last few years, that's a solid argument in favor of what the owners have been saying -- that small market teams can't afford to be competitive and still make money under the current system. I don't think you could argue that the Blazers have been poorly managed by any means.
Why not? Doesn't Paul Allen states in his last book that he fired Pritchard because "he struggled in the managerial parts of his job"? Wasn't the gross mismanagement going on under Pritchard/Penn that lead to Allen bringing the "Volcanos" to restructure the franchise? Weren't the Blazers known for profligate spending? Paying much above the market to scouts and other backoffice positions. Or buying all those 1st round picks, how many times did that happen? And they have a relative high level of debt exposure. Paul Allen himself admits he didn't care about the bottom line for a long time. So, poor financial results are to be expected.
I think an efficiently managed Portland team can generate enough revenue to pay for those salaries; but I do agree that's a fair point if applied to other teams - Indiana, Minnesota and Milwaukee for example. Those teams may be prevented from paying a payroll above the luxury tax - frequently needed to compete for a championship - unless their owners are willing to take a loss.
In fact, I believe that factor is the main reason behind this stalemate and the lockout.
However, in my opinion it doesn't follow that the best solution for that problem is cutting the players salaries.
The issue is that some teams make a lot more money than others. This was aggravated by the league expansion - as the owners happily pocketed the expansion fees. With a cap tied to the BRI, the expenditures necessary to compete raise as the BRI raises but the BRI doesn't go up proportionally for every team - big market teams have seen their revenue growing at a much larger pace.
So, how to solve this problem?
The owners proposal is basically that the players' salaries should be low enough that any team, regardless of the size of the market and the quality of the management, can have the highest payroll in the league or close to it and still turn out a profit.
The players better hope the owners don't sell an expansion fee to some investor in North Dakota or Alaska, otherwise they'll be asked to reduce their part of the BRI to 3 or 4%.
In my opinion, the NBA needs to address this issue primarily via revenue-sharing. Otherwise they're underpricing the players value too much - and being oblivious to "invisible competitors". A league without those small market teams could pay more to the players and be more profitable than the NBA.
Topic: Tom Penn (on PTI) - 75% chance no basketball this season (Read 6932 times)