SCC Blog

Paul Allen & the Trailblazers Reclaim the Rose Garden

This story isn’t exactly a current event as the news of Paul Allen’s re-acquisition of the Rose Garden became public a few weeks ago. That said, I wanted to revisit the story in our blog because it illustrates an issue of paramount importance in the world of sports business. For those teachers who follow our blog, I would encourage you to spend some time in your classroom discussing arena financing as it relates to sports/entertainment business and marketing.

The Blazers franchise, after relinquishing control of the arena (and subsequently the revenue streams an arena provides), spent the last few seasons toiling in financial distress. Management frequently complained of a “broken economic model”, maintaining the franchise was doomed to lose money unless changes were made. The organization even resorted to pleading with government officials for public financial support (a disastrous PR nightmare to say the least).

Having worked for the Blazers, I can tell you this much: the organization has NO chance to succeed financially without control of the revenue streams that accompany a stake in the team’s arena. The team now has a lot to look forward to in upcoming seasons with a core group of talented young players, a new general manager beloved by fans, a positive buzz following the team in the community, and finally regaining control of the Rose Garden.

I spent some time chatting with members of the organization this week, and they will be the first to tell you that the franchise that had disconnected from its fan base over the years has finally turned the corner. They will also tell you that this is no time to kick back and give one another high fives, but rather to continue ramping up their efforts to rebuild the Blazer brand by capitalizing on current successes and riding the community’s newfound support and enthusiasm.

*** NOTE TO TEACHERS ***

In my mind, regardless of where you teach (whether you are in Oregon or Kentucky or New York), this is an excellent case study on effective franchise management. Just two years ago, the Blazers were on the bottom of the standings with nearly the lowest attendance figures in the league, no community support and not much to look forward to. Now, with the franchise on the cusp of a financial turnaround with improvement on the court and in attendance, control of the arena becomes that much more valuable.

Compare this situation to that of professional sports teams in your area. What are the relevant revenue streams that the management of an arena provides? Discuss why it is important to a franchise to maintain control of an arena or facility and what that means to the franchises’ bottom line. Consider developing a role play situation with your class acting as team management.

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