The Blazers as a business investment

[MikeDC]

I wrote a long and somewhat Bulls-centric post here about looking at NBA teams as investments, but I think it might also have some interesting things for you guys to consider as Blazers fans.

Specifically:
1. If you compare a guy like Paul Allen to a guy like Bulls owner Jerry Reinsdorf, Allen actually made something to make his fortune. Reinsdorf basically took advantage of tax shelters. I think ultimately this sort of thing is telling in terms of ownership style. An owner like Allen is occasionally going to take a risk.

2. An owner like Allen who accepts a lower return on his investment (he's made about 10% annually in increased value and income on the Blazers, by this analysis, vs. a return of around 20% for a guy like Reinsdorf or Donald Sterling) might do so in order to win more. However,

3. The teams that have tended to be the most valuable over the last ten years have been teams that have been consistently competitive winners. In that sense, I think this is a very good result. Even though their are guys like Reinsdorf who abuse the system and do little to win while profiting from past glories or limiting payroll (or both), a team can be extremely profitable by correctly evaluating talent and putting a winner on the floor.

 

[BrianFromWA]

My initial reaction is that profitability stems more nowadays from what used to be "ancillary" items rather than butts in seats watching a winner. Local cable and national TV money, ability to get public funding that boosts your bottom line, etc. matter more for profitability.

My GM-wannabe sense tells me that there's definitely an opening for a Billy Beane-esque shift in GM values from the old-school cigar-smoking scout, past KP's draft-develop-and-bake-the-cake philosophy, past even the "three-star-and-role-players" model Popovich has been successful with into a niche of "pure profitability".

If you wanted to be purely profitable, I think you could definitely make it happen while fielding a middle-of-the-road team that may make the playoffs here and there, won't get too many high lotto picks, stays well below the salary cap and experiments now and then with things that keep the buzz alive. Being an innovation pioneer and thinking way outside the box in player acquisition, development and utilization. Using advanced metrics, but also looking for the gold mine in the tundra.

I kind of thought KP was on his way to this, but he took the path more traveled by. That's not necessarily my vision for this "purely profitable" enterprise.

 

[Nikolokolus]

A lot of profitability for pro franchises (of any kind) is not only tied to TV deals, but corporate sponsorships. One of the reasons the Blazers will always have a tough time breaking even in Portland is that there just isn't enough of a corporate base to help underwrite costs (Arena naming rights, promotions, advertising rights, etc.)

If Reinsdorf or Sterling had their teams in much smaller markets their bottom line would look very similar to the Blazers (not taking into account player salaries).