Blazers implement layoffs, pay cuts due to COVID-19

Sports

The Blazers 50th anniversary logo is giant-sized on the Moda Center, October 23, 2019 (KOIN)

PORTLAND, Ore. (The Oregonian/OregonLive) – The wrath of the coronavirus and its crippling effect on live events dealt a sobering blow to the Portland Trail Blazers on Wednesday, when the organization issued a round of layoffs and salary reductions.

The Blazers laid off 15% of their workforce — roughly 40 positions — and issued salary cuts for every person in a director role, including President Chris McGowan and his senior vice presidents. The cuts came from departments across the organization and its arena management company, Rip City Management.

“This is absolutely the most painful decision we have to make as leaders of the organization,” McGowan told The Oregonian/OregonLive. “We’ve tried to do this in a way that’s as compassionate as possible during an unprecedented time.”

The cost-cutting measures were necessary because live events such as concerts and NBA games have been canceled for the foreseeable future to prevent the spread of COVID-19. The Rose Quarter has not hosted a sporting event or concert since March, when the United States went into a virtual coronavirus lockdown, and it’s unclear when the revenue-generating live events will return.

The Blazers are scheduled to resume their season next month, when 22 NBA teams gather in the “bubble” of Disney World in Orlando to play a truncated eight-game regular season and postseason. But while that will generate millions in television revenue, the Blazers still stand to lose millions because they cannot host games at the Moda Center.

The organization generates roughly $2 million of revenue for every home game, factoring in tickets sales, concessions and sponsorships, and will forfeit roughly $18 million because the final nine regular-season home games were canceled. That does not include millions more in lost playoff revenue. Add that to what is owed to season-ticket holders and corporate sponsors — who missed out on 22% of their regular-season investments — and the loss of millions generated from concerts and other live events at the Moda Center and Veterans Memorial Coliseum, and the organization is millions in the hole.

And the worst could be yet to come because it’s unclear how long the threat of the coronavirus will persist and keep large crowds away from arenas.

“We don’t know when we’re going to be able to return,” McGowan told The Oregonian/OregonLive. “If I could say, ‘Hey, by November, we’ll be back up and running,’ that would be one thing. But we have no live events and we don’t know when they’re going to resume.”

The layoffs are the first for the Blazers under Chair Jody Allen and McGowan, who, after an initial round of restructuring when he was hired, has expanded the organization during his eight years in Portland. He and other organization leaders have been working on the cost-cutting measures behind the scenes since March, when the NBA season was postponed. The hope is that the moves will put the Blazers — who were valued at $1.85 billion on Forbes’ most recent annual valuation of NBA teams — in a strong position for whatever awaits when the thereat of the coronavirus disappears.

The salary reductions of Blazers directors ranged between 5% and 15%, depending on salary and job title. Those who lost jobs were given a severance package that included health benefits.

Wednesday’s layoffs illustrate that even Portland’s marquee sports franchise isn’t immune to the factors roiling Oregon’s economy. The state’s jobless rate was 14.2% last month, a historic high, and roughly 600,000 Oregonians have filed for unemployment benefits since the middle of March. That is nearly 1 in 3 workers statewide.

“Due to the global pandemic, the Trail Blazers organization has been substantially impacted in our ability to host live events for the foreseeable future,” the team said in a statement. “As a result of these unprecedented circumstances, the organization has instituted a series of measures to prepare including a reduction in our full-time workforce.”

This article was originally published by The Oregonian/OregonLive, one of more than a dozen news organizations throughout the state sharing their coverage of the novel coronavirus outbreak to help inform Oregonians about this evolving health issue.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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