Tuesday, December 20, 2011
Paul Allen on spending
By Henry Abbott
There are teams that are willing to spend like crazy, like the Knicks, Lakers, Mavericks and -- when the mood is right -- Blazers. But from an owner's point of view, an ability to spend should not be confused with a healthy bottom line. When it comes to making money, the Lakers and Knicks are in a class by themselves. If the Mavericks or Blazers are going to spend along with them, it's because the owners have irrationally decided to lose money. And here Allen says publicly what others have privately -- that Cuban's Mavericks lose a lot, something that informed Allen's position as a hawk in the just-concluded CBA talks.
Allen spoke to reporters in Portland, as reported by Kerry Eggers of the Portland Tribune:
"The quandary you get into in a small market is, you have a choice between being competitive and maybe overspending, or not trying to be competitive and trying to break even," he said. "That became very dramatic with some teams. We were starting to see some teams say, 'We’re not going to be competitive, because it costs too much money, and we’re losing too much money.'
"Even the mid-market teams like, say, Dallas ... they won the NBA championship but were way over the luxury tax and lost a lot of money. It was clear that not only did you have to stop the small-market teams from collectively losing a lot of money, but you had to try to level the playing field."
Allen has often spent many millions in luxury-tax dollars. That won’t happen in the future, he said.
"As an owner, you want to do the team right, the fans right, the community right, and build a winning organization," he said. 'It comes back to the desire to win and enjoy with the fans and the community the success you have. I’ve invested a lot, but the crazy luxury-tax days are gone.
"It’s one thing to say, 'It’s a near-championship year, I’ll spend a little extra money on free agents.' To do that on a regular basis doesn’t make sense."
And, Allen added with a smile, "There’s no enjoyment to losing money. As you get older in life, you start thinking, ‘I could be losing money doing this, or I could be spending money on great research or charitable things.'"
Oregonlive has a full transcript of Allen's talk, including the moment a reporter's phone interrupted him with the theme from "Rocky."