The Oregonian ran an incredibly long (by 2026 standards) article on Friday on the Portland Trail Blazers arena situation, including lots of useful information but thematically muddled to the point where if you read it and aren’t sure what it was saying overall, you’re not alone. In all likelihood, you didn’t read past the headline (“As the Trail Blazers dig in on Moda Center costs, Portland looks for leverage”) and first three paragraphs, as the Oregonian is hard-paywalled for subscribers only; thanks to a kindly FoS reader who passed along a copy, we can go through it bit by bit and try to see what to make of it all:
The Blazers, through a sibling organization, lease the Moda Center from the city. The team pays no rent. It also pays no property taxes because it no longer owns the arena. In addition, it keeps the revenue from the arena’s naming-rights deal, advertising, concessions, as well as a significant share of the cash generated from ticket sales and parking at Blazers games, as well as some revenue from other events.
Those terms are all negotiable in the team’s next lease, which must run for at least 20 years to unlock the public financing windfall.
That is indeed a very bad lease, one that goes back to 2024 when the city agreed to buy the arena from the estate of the late Paul Allen. And if Blazers owner Tom Dundon doesn’t want to put in a significant share of the $600 million in arena renovations he wants — currently his final offer is “I pay taxes, why should I spend anything on arena renovations?” — then getting him to pay some rent seems like a reasonable demand.
City Councilor Steve Novick has done back-of-the-napkin math that shows tweaking lease terms could make the city whole for its expected $120 million renovation investment, even if Dundon doesn’t chip in a nickel…
In an email, Novick said he wants to craft a lease that kicks back every dollar the city puts into the arena, including the expected $120 million for renovations and $14.5 million in annual operating costs.
That’s not really Dundon not chipping in a nickel, of course: It’s Dundon chipping in $300 million ($120 million for the city’s renovation costs plus the present value of 20 years of $14.5 million operating payments). But if Novick wants to frame it as “Dundon doesn’t have to put in any money for renovations so long as the city can take it out of his increased lease payments,” that’s fine, two can play at the Casino Night Fallacy.
And that wouldn’t all be new money that Dundon would be putting in, because, as it turns out, while his current lease doesn’t require him to pay rent on the arena, it does require him to share some arena revenues:
The city makes $10.5 million a year from the Blazers’ current lease, Novick said. That includes $2.9 million from its 6% fee on Blazers tickets and $4.3 million from non-Blazers tickets. It also makes $3.3 million from parking in municipally-owned garages, a little less than half of the Rose Quarter parking revenue. The rest goes to the Blazers.
So now we’re down to covering $120 million in renovation costs plus an added $4 million a year in operating costs, which comes to about $170 million. That’s clearly $170 million that Dundon doesn’t want to pay — he already pays taxes, that means he gets everything else for free, it’s just how being a billionaire works! — but if it unlocks him getting $600 million in public funds total, he should take the deal and be up $430 million, right? In fact, one could argue the city should really be asking for more than $170 million, on the grounds that there’s county and state spending to be made up as well — Oregon officials have argued that state taxpayers will be made whole by all the income taxes the Blazers pay, which 1) no, probably not and 2) residents who don’t own basketball teams don’t get to devote their employees’ income taxes to their own business expenses — and while Dundon would undoubtedly rather get to keep his whole $600 million windfall, a $200 million or $300 million windfall for doing absolutely nothing aside from continuing to play in Portland is still a pretty nice day at the office.
Ah, but Dundon has leverage too, writes the Oregonian:
The worst-case scenario is grim: If the Blazers leave, the city could get saddled with an aging asset with no marquee tenant, one in need of more than $400 million in maintenance, and no backing from the state or county, which are respectively expected to contribute $365 million and roughly $101 million.
That $400 million in “maintenance” costs doesn’t have a cited source, and elsewhere the Oregonian refers to the projected $14.5 million in operating costs as “maintenance,” so maybe the paper is just adding up the costs of keeping the lights on at the arena for the next 30 years? In which case, first off, that’s not $400 million in present-day costs, whereas the city’s arena renovation costs would all be paid out right now. And second, as just established, that’s money that is mostly being paid off currently by those ticket taxes and parking fees, and if the Blazers left town, there would be 41 added dates a year for the arena to fill with concerts to make up for at least some of the tax revenue shortfall from not having the NBA.
All of which presupposes that Dundon would really move the Blazers if he doesn’t get his $600 million — or if he only gets $430 million, or $300 million, or whatever. And for what it’s worth, Dundon straight-up said in May that he has no intention of moving the team, and even if that was just an attempt to look less like a supervillain to the public, it’s certainly worth using in negotiations.
In the end, the Oregonian article is hamstrung a bit by viewing the Blazers arena squabble mostly through two sets of eyes: The vast majority of the piece is devoted to quotes or information provided by either Novick or Blazers president of business operations Dewayne Hankins, presumably on the premise that the truth must lie somewhere in the middle. But it’s at least an indication that some Portland elected officials are trying to push for a better lease in return for Dundon getting a pile of up-front public cash, which is better negotiating than lots of cities do. Right now the city is overdue sending its initial lease proposal to Dundon, but may as well take the time to get it right — after all, it’s Dundon who risks missing out on $600 million if nothing is approved this year, so who knows, maybe he’ll blink.
TFG put his wife’s name and the names of his ridiculously monikered children on the Stanley Cup. He’s been a villain from the get-go.
When Dumdum says “I pay taxes”… do we know exactly what taxes he is referring to?
I mean, the Blazers no longer pay property taxes on the venue. I suppose players and team employees do pay state income taxes and THEY no doubt pay property taxes (in one form or another) on their residences etc.
Is there an assumption that the owner will move to Portland and become subject to (at least partial) state taxes? I don’t see that happening, frankly, but it wouldn’t surprise me if that suggestion has been floated.
Maybe he is counting the fees and fines he has paid (and will likely continue to pay) to settle claims made against his other businesses etc. Those really aren’t taxes, of course. They are penalties (even if made without any admission or factual finding of guilt by the agency agreeing to the proposed settlement…)
This owner could be the biggest obstacle to successfully marketing his own team to fans. I guess he’s not the only one who that can/could be said about, but he is way up there on the list of heavily disliked owners.
Kinda amusing that Dundon’s hockey team won the Stanley Cup yet his absurd early run with the Blazers is overshadowing even that. Granted, some of that may have more to do with the NHL than anything that Dundon himself has done, but still.
That hockey team, by the way, just also happens to be in a “one horse” sports town. Seems like he knows that those types of places are far easier to play with and shake down than cities with two, three, or four (or more) teams in it, and where a hierarchy exists in terms of how beloved those teams are locally.
The Canes are known to underpay their employees and yet have an outstanding front office and coaching staff.
It is therefore reasonable to guess that good people want to work for them just because other good people work there (and like living in the Triangle area).
But that’s a house of cards. If a few people decide to go elsewhere to make more money, the whole thing will begin to collapse.
And if he tries to be cheap in Portland, he’ll probably never be able to attract the core talent to build around.
What I don’t understand is why the World Cup is never in the UK. They have so many soccer-specific venues that they don’t have to build anything.
England hosted and won the World Cup in 1966. Only time hosting & only time winning.
They bid for the 2018 WC. Jack Warner infamously declared that their “gift bags” for FIFA delegates were substandard, containing ‘non current’ iPhones and lower grade gold trinkets etc. Imagine.
After the tournament was awarded to Russia Warner attempted to explain away these comments by suggesting that “no one in Europe likes England. It wouldn’t be a popular choice” etc.
He had been awaiting extradition to the US to face similar charges to those Chuck Blazer rolled to avoid since 2015… however I understand our man Jack has now had his extradition stayed by the Trinidadian high court as his ‘rights’ were violated… somehow.
While the current regime in charge of FIFA may seem horrifically corrupt, it’s important to remember that much of FIFA’s history has involved some very, very questionable financial practices.
Reminds me of the video that went viral after the whole Balogun red card fiasco: “Corruption is not bad. Corruption is only bad if I’m not involved. But if I’m part of that corruption, I’ll defend it.”
FIFA has been bent for a long time. Maybe always.