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SBJ/July 14 - 20, 2003/This Weeks Issue
As loss grows, Blazers trim staff by a third
Published July 14, 2003
With officials anticipating heavy financial losses for the fiscal year that ended June 30, the Portland Trail Blazers fired 88 employees last week, including 48 full-timers with Oregon Arena Corp., operator of the Rose Garden.
"It's been a numbing week," executive vice president Erin Hubert said in the aftermath of the layoffs. "Business has been out of balance on both sides. We had to make some really hard decisions. It breaks my heart."
The NBA franchise and facility, owned by computer software tycoon Paul Allen, reportedly will lose $100 million this year after being slapped with what potentially could be a $60 million luxury tax for spending far beyond the salary cap.
The staff cuts, which included Blazers TV broadcaster Pete Pranica and Jim McCue, senior vice president of facility sales and marketing, will reduce the red ink by only $4 million to $5 million, Hubert said.
She said there would be no more pink slips forthcoming, with the possible exception of in-house food concessionaire Cutting Edge Concepts. In fact, Hubert said Oregon Arena Corp. already has submitted an RFP to contract with a third-party concession firm.
"That's a separate financial analysis," she said. "We're going to find out if that can be done more efficiently out of house. We're in the process of getting bids and will make a determination later this summer."
The Blazers and Oregon Arena Corp. employed nearly 300 people, which was reportedly more than double the size of any other NBA team's staff. Hubert explained that the administration believed that to provide "top-notch service" it had to hire all personnel in-house rather than relying on subcontractors for certain tasks.
"That included all food and beverage, housekeeping, creative and graphic services and our technical department," she said. "We hired on an 'as-need' basis. We tended to operate as when we needed something, we hired someone full time instead of outsourcing.
"The simple answer is that while it all appears good in theory, you need a balance of the two with good business sense, and we didn't have that."
Hubert said despite reports that the decision to eliminate one-third of all full-time positions was orchestrated by Allen's financial consultants, it was ultimately her call.
"I initiated this a year and a half ago when I was hired," she said. "It was real clear from the get-go that we needed to run things in a more disciplined way."