Category: Portland Trail Blazers

I didn’t mean for this to be an all–Portland Trail Blazers week, but here we are. The latest news is that, on top of anonymous team officials saying they won’t dignify the city’s lease offer with a response, anonymous city officials say they’ll wait for a counteroffer because to do otherwise would be “negotiating against ourselves.” That’s what you call an impasse, prompting The Athletic to run an entire explainer on how impasses work.

And at the same time, two Multnomah County commissioners are threatening to pull the plug on $35 million in county arena renovation funding that was already approved:

Ahead of a scheduled vote later this week, Commissioners Julia Brim-Edwards and Meghan Moyer on Tuesday introduced a pair of amendments that would cut more than a third of the $100 million that County Chair Jessica Vega Pederson previously committed toward the estimated $600 million project and require that the county recoup any debt it takes on to help finance it…

One of Brim-Edwards’ and Moyer’s amendments would pull the $35 million in earmarked business tax proceeds from the pot of county money, reducing the total to about $65 million.

“The county anticipates a $60 million deficit over the next three years,” the pair said in a statement Tuesday, noting those funds “could instead be used to protect essential services for seniors, people with disabilities, homeless individuals and veterans.”

The county commission only has five members, so the amendments would only need to pick up one more vote to have a shot at passage. In that case we could see Blazers owner Tom Dundon increasing his demands while Oregon officials reduce their offer, which doesn’t need an explainer to explain how that would be an impasse.

At that point, the conventional wisdom goes, Dundon could start ramping up efforts to move the team, something up till now only hinted at by his unnamed henchmen. Except that, as reported here this week, Dundon’s site agreement with the city dictates that he “shall not relocate or seek to relocate the playing site” of Blazers home games until his lease expires in 2030, under penalty of everything up to and including a court injuction. So that rules out openly shopping around for new cities for another three and a half years, right?

Except! ESPN’s Brian Windhorst wrote yesterday that the lease doesn’t block Dundon from moving the team:

The basics are this: The Blazers have a short lease, negotiated in 2024, that only runs through 2030, and the penalty for breaking the lease is to repay the local governments the cost of renovations, which haven’t taken place.

In short, the Blazers are not locked down.

Here’s the lease, which indeed runs only through 2030. In section 13.4, it specifies that if Dundon is found in default of his lease (he doesn’t have rights to terminate the lease, only the city does), Portland can “seek specific performance or other injunctive relief” and try to “recover monetary damages” — there’s nothing in there about Dundon just repaying the cost of any renovations and getting off scot-free.

So, whatchu talking about, Brian? Since Windhorst doesn’t have a public email address that I can tell, I tried tweeting at him, but so far have gotten crickets. Until he provides some receipts for his claim, we should assume that what the lease says is what the lease means, in which case Portland has the hammer in terms of forcing Dundon to come to the negotiating table if he wants arena money, or else he has to sit and lump it until 2030. That’s not perfect leverage, but if city and county officials want to play hardball for the time being, it does appear that Dundon doesn’t have much he can do in response other than send his flunkies to warn elected officials not to make dad mad.

 

Two days into the week, and Portland Trail Blazers owner Tom Dundon’s strategy for getting arena renovation money is becoming clear: Send team officials to talk to the media under cover of anonymity to sell his $600 million demand. That’s a typical enough gambit — though finding two media suckers in a row to agree to print your unnamed quotes, The Oregonian last night after The Athletic on Sunday, is impressive — but what’s breaking new ground is that Blazers officials have introduced negging to the sports subsidy game, declaring that really it’s Oregon taxpayers who would be getting a “sweetheart deal” by only giving Dundon $600 million:

The official said one “very real” potential outcome of that meeting could be the ownership group resetting the negotiations and starting over, including tossing aside the $365 million commitment the state made earlier this year. … The official added, “The deal doesn’t get better. It gets worse with time.” …

The team official argued that “the city of Portland doesn’t even recognize that they got a sweetheart deal,” suggesting that an arena renovation is far less expensive for the public than had ownership pressed for a new facility. …

The team official stressed a move is not the Blazers’ preferred outcome but did not rule it out.

If Dundon were to attempt to move the Blazers to another market, he would likely have to pay a steep penalty to the league. That may not necessarily be the deterrent some relocation skeptics believe it would be for the famously thrifty owner.

“It’s not like we lose money moving the team,” the team official said. “We might spend money, but we don’t lose money. It might be OK to spend a billion dollars on a relocation fee if the valuation of the team doubles.

“Of course you would do that.”

There’s a lot to unpack there, but in short: Dundon’s execs are claiming that their boss’s offer to take $600 million in tax money while paying no rent or property taxes is really doing Portland a favor, because he could either 1) demand even more money for renovations, 2) demand even more money for a whole new arena, or 3) move the team to a more lucrative market, even if it costs $1 billion in relocation fees. For the Blazers’ value to double, in case you’re wondering, according to Forbes figures they would have to become the fourth-most valuable team in the NBA, behind only the Golden State Warriors, Los Angeles Lakers, and New York Knicks. Where on earth they could make that happen is one of many followup questions that it would be good to ask — but which no other news outlets can, because the Blazers Deep Throats aren’t taking questions, they’re only issuing statements.

Responding to resistance from elected officials to giving you everything you want by threatening to demand even more, meanwhile — and at a time when his lease actually prohibits him from seeking out new cities to relocate to for another four years — is a bold move, but then, Dundon has always been known for his unorthodox business practices. If the next anonymously sourced article claims that if Portland doesn’t approve its share of the $600 million immediately Dundon will shoot a dog, don’t act all surprised.

Amid the ongoing staredown over $235 million in city and county funding for Portland Trail Blazers arena renovations, the news media dropped a slew of articles this weekend on the latest developments, such as they are:

• The Oregonian (reprinted at MSN without a paywall) asked all 12 Portland city councilmembers what they want out of a Blazers deal, and, surprising no one, they all want a deal, but disagree on what the city should give up to get one done. “It’s unclear whether at least seven councilors will vote together on the outlines of the deal, which is expected to undergo significant revisions in the coming weeks,” concluded the paper. (Councilmembers’ complete answers are here.)
• The mayors of 24 Portland suburbs sent a letter to city, county, and state officials urging them to cut a deal with Blazers owner Tom Dundon, though they didn’t specify what kind of deal, urging negotiators “continue to ask hard questions and negotiate professionally while acknowledging the deep mark your decisions will make on your neighbors, as well as the overwhelming commitment already made by the surrounding region.”
• The Athletic devoted a long article to statements by two unnamed Trail Blazers sources, one of whom said, “I think we are very far apart” on a deal, calling last week’s term sheet proposing that Dundon pay $3 million a year (and rising each year) in payments in lieu of property taxes “a non-starter” and adding, “I don’t know why they sent it to us, because they know very little of the stuff we would agree to. They are playing politics at this point.” (The Athletic, incidentally, appears here to have violated the Society of Professional Journalists’ guidelines on use of unnamed sources, which caution, “When someone asks to provide information off the record, be sure the reason is not to boost her own position by undermining someone else’s, to even the score with a rival, to attack an opponent or to push a personal agenda.”)
• One of the Blazers sources also alleged that the city’s “delay” in approving an arena renovation deal could lead Dundon to demand even more, including possibly asking for an entirely new arena, see if he doesn’t!
• Oregonian columnist Bill Oram, who has been insisting for months that Dundon will move the Blazers without arena subsidies, quadrupled down on that Friday in a column titled “Portland may need to keep the Trail Blazers here against Tom Dundon’s will,” writing that “the city’s job is to lock the door and throw away the key. Not let the new owner skip town with Portland’s most precious civic asset.”

That’s clearly the game of chicken here: How much can Portland officials push back on Dundon’s demands without him picking up the team and leaving when his lease expires in 2030? What makes it weird is that Dundon hasn’t so much as dropped hints about moving the team — his only direct statement on the matter has been, “We didn’t buy the team to move it. We bought the Portland Trail Blazers.” (Even one of the Athletic’s unnamed team sources passed up the chance to make a move threat under cloak of anonymity, saying, “No one with the Blazers has ever said we want to move. We don’t want that. We want to stay in Portland.”) And while Blazers president Dewayne Hankins did hint at a move threat in May by saying, “if city and county leaders can’t get a deal done, the Blazers’ lease at Moda Center will expire in 2030,” by not actually saying out loud where else the Blazers might go or what kind of deal Dundon could expect to get there, Portland leaders are left bidding against ghosts, which is to say bidding against themselves.

Add up all the latest breathless news coverage, and there isn’t much new: Portland officials still don’t want to give away the store to Dundon, team officials still want them to. At this point the likely impact of all the media handwringing is to influence what pressure city councilmembers — especially swing votes, whoever they may end up being — feel to cut a deal, and how much they’ll hold out for. Ultimately, in so many of these negotiations, the end game ends up coming down less to ethical principles than to haggling over the price.

UPDATE: The Blazers’ current lease says that Dundon “shall not relocate or seek to relocate the playing site of its Home Games … without the prior written consent of the City, which may be withheld in the sole and absolute discretion of the City.” This would indicate that Dundon can’t even seek to talk to other cities until 2030 — which would explain why he’s biting his tongue now, but not so much why Oregon officials (and sports columnists) are acting like a new lease deal is urgent.

And speaking of “Approve sports spending first, work out the details later,” this just in from Portland, Oregon regarding Trail Blazers owner Tom Dundon’s $600 million arena renovation request:

As a deadline to commit public dollars to Moda Center renovations rapidly approaches, it appears that Portland city councilors will be asked to approve spending $120 million on arena renovations next month without knowing where that money will come from in the city budget.

According to city officials, that’s because the Portland Trail Blazers have yet to share details of the renovation plans they have in mind for the Moda Center. The Blazers say they need the city to commit to funding before they’ll share designs.

Sorry, wut? If ever a moment called for the employment of that Simpsons “aurora borealis” meme — oh good, looks like J.C. Bradbury is already on it.

With Dundon keeping his pig firmly within its poke, that limits Portland’s options for coming up with its $120 million share, because two sources of funding — the Portland Clean Energy Fund and a city economic development fund — have restrictions on what they could be used for. Not that it really matters: If those funds aren’t used, Portland will have to come up with other tax money, and if they are used, Portland will have to come up with tax money to pay for whatever those funds would have otherwise been used for.

Still, the fact that the Portland city council is set to commit to a term sheet for Blazers lease talks on August 12 and won’t know by then how it would pay the $120 million bill it would be committing to is, let’s go with “not great.” There’s nothing stopping the council from calling Dundon’s bluff, of course, and saying they won’t release his money until he releases his arena plans. That would seem to be the absolute least they could ask him to do, since it wouldn’t cost him any actual money — and Portland lawmakers could still totally request that he chip in more of that — but nobody ever became a billionaire by acceding to reasonable demands.

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.

The standoff over spending $235 million in city and county money on Portland Trail Blazers arena upgrades to go along with $365 million in already-approved state money — and $0 from Blazers’ billionaire owner Tom Dundon — continues, with Portland Mayor Keith Wilson issuing a public letter declaring it a “transformational civic project” while city and county legislators wonder aloud what exactly the city and Multnomah County would get for their tax dollars:

County Commissioner Meghan Moyer slammed the proposed use of tax proceeds because the money could be spent on other public services. She said the county is expecting a $78 million deficit in its general fund over the next four years.

“What these funds could provide are services to our most vulnerable,” she said. “They are seniors, they are people with disabilities, they are people who cannot access health care. They are children.”

“Please, Tom Dundon,” Moyer added, “strike a fair balance.”

And on the city council side:

“If the owners put up just 25% of the $600 million price tag [which would be funded by the city, county, and state] on this renovation and agree to pay rent equivalent to what the Hurricanes pay in Raleigh, that alone would cover the upfront costs being asked of the city and the county,” said Councilor Angelita Morillo.

Portland area government leaders, meanwhile, sat down with Dundon in the arena at the Portland Metro Chamber of commerce’s annual meeting yesterday to talk up the Blazers’ renovation plan, only to have it turn into a forum for more questions about why, exactly, the public should be paying for this:

As the meeting was taking place, protestors made their voices heard, yelling “hands off PCEF,” the Portland Clean Energy Community Benefits Fund.

Protestors also gathered around the Moda Center, yelling “no bailouts for billionaires.”…

Multnomah County Commissioner Julia Brim-Edwards said, “I mean, very fundamentally, what is it that the almost $600 million in public investment is going to be buying? And we didn’t get that answered this morning. So we’re going to need that answer. There’s a lot of work that’s going to need to happen between now and the time that the county commission votes on anything.”

Mayor Wilson’s letter didn’t do much to answer what kind of return the city and county should expect on their $235 million, beyond warning that Portland could “put the brakes on the project if we don’t take our role seriously” and saying that “good process means sitting down, figuring out the math, and keeping the public informed and empowered every step of the way, not duking it out in the media or on Instagram.” No actual math was included, and posting an open letter on your website arguably counts as “duking it out in the media,” but Wilson has left it off his Instagram feed for now, so there!

Dundon, meanwhile, said that it’s totally fair for him to put nothing into a $600 million arena renovation for which he’ll receive all the proceeds, because he pays taxes, what do you want from him, blood?

“There’s lots of places that don’t have taxes at the same rate,” Dundon told the crowd. “So if you charge people taxes and invest it back into the thing that helps generate the money relative to the market, other places … it’s a huge investment. … I just know it feels like we’re making a pretty big investment by staying here and paying these tax rates and agreeing to these fees for dollars that go back into the building.”

It’s like an isoceles triangle! And what is geometry if not a form of math?

The city council has a vote on the arena term sheet scheduled for August 12, but the city and county have until the end of 2026 to vote on the arena renovation plan, so expect even more of this over the coming months. City Councilors Mitch Green and Steve Novick have proposed a November public ballot measure on the arena plan; that would have to be approved by the council by July 22 in order to happen.