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NBA's Portland Trail Blazers face mounting concerns after first-round exit and a coaching change

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Key Points
  • The Blazers lost in six games to the Denver Nuggets, marking the fourth time in five years the team has failed to get out of the first round.
  • Head coach Terry Stotts and the Blazers parted ways on Friday, one day after the post-season elimination.
  • "We didn't win a championship, so obviously where we are now isn't good enough," superstar guard Damian Lillard told reporters.
Damian Lillard #0 of the Portland Trail Blazers shoots against Paul Millsap #4 of the Denver Nuggets in the first quarter during Round 1, Game 6 of the 2021 NBA Playoffs at Moda Center on June 03, 2021 in Portland, Oregon.
Steph Chambers | Getty Images

It all happened so fast, providing another example of how quickly business can shift with a National Basketball Association franchise.

The Denver Nuggets took out the Portland Trail Blazers in six games, capping off their NBA playoff series on Thursday with an 11-point victory. The Blazers couldn't protect a 14-point second-half lead and had an abysmal fourth quarter. TV cameras captured the scene of franchise star Damian Lillard walking into a dark tunnel at Moda Center in Portland.

An Instagram post from Lillard seemed to ask how long he should stay loyal to the only team he's played for in his nine-year career. He made it clear to the media that the team needs to improve.

"We didn't win a championship, so obviously where we are now isn't good enough," Lillard told reporters after the loss. Less than 24 hours after that, head coach Terry Stotts, who fell to 23-44 in the playoffs, paid the price. Lillard quickly informed a handful of media outlets including Yahoo Sports, of his preference — Jason Kidd.

It is the fourth time in five years, the team has failed to get out of the first round of the NBA playoffs. With public messages surfacing about the future, consumers and corporate partners should be asking: What is going on with the Blazers?

The roster needs major work and ownership — Paul Allen's estate — is facing pressure to make changes. Top basketball executive Neil Olshey remains, as of now, and is tasked with fixing the $1.9 billion franchise. He needs to do it fast.

Satisfying the superstar

Lillard is one of the NBA's most dynamic stars. He's heavily endorsed off the court, with Adidas and Hulu among his top sponsors. He's known across the league for his clutch performances, which are often labeled "Dame Time."

Against the Nuggets, he averaged a career-best 34.5 points and put together a stat line for the ages in Game 5, scoring 55 points and making 12 of 17 three-point shots. Still, the team lost in double overtime.

Lillard made $31 million this season. That will jump to $39 million next season, thanks to a four-year, $196 million extension signed in 2019. The contract keeps Lillard locked up until 2025.

But the six-time All-Star turns 31 in July. The nagging injuries have started, and the window to win with Lillard is closing. Olshey has given rival teams no indication that he's willing to trade Lillard.

Lillard and his agent, Aaron Goodwin, could easily change that tone, though. A person close to Lillard told CNBC that he's expected to wait to see what the Blazers do this off-season before deciding his future.

A rival NBA agent, who faced a similar situation with a star player, said Lillard could first gauge how serious ownership is about winning. The Blazers' willingness to pay into the luxury tax, which carries steep financial penalties, is also a factor.

But after his public comments soliciting Kidd, the signs suggest Lillard wants to stay.

Who will be the new coach?

Kidd is currently an assistant coach for the Lakers, who won the championship last year. He has head coach experience and a title as a player from his time in Dallas. He'd bring credibility in the locker room and will instantly click with Lillard, as both are Oakland natives.  

The thing is, can Olshey trust Kidd? If this is Olshey's final coaching hire, before he too is gone, can he count on Kidd to honor organizational structure?

Kidd's praised for his work with the Lakers, and the chatter is that he's grown. But his history as a head coach in NBA isn't the prettiest. He feuded with management in Brooklyn, was criticized for the way he took the helm in Milwaukee. Another respected coach, Larry Drew, was on the job when Kidd maneuvered to get there.

Chauncey Billups is another option.

Olshey would instantly trust Billups, as he built a strong relationship with the former Detroit Pistons point guard when they were with the Los Angeles Clippers for the 2011-12 season. Billups is now an assistant with the Clippers, and is active in NBA circles. He's involved with a point guard-driven players group that discusses basketball concepts and is aligned with NBA power booker Rich Paul, who added Billups' agent Andy Miller, to his sports group.

Other names like ESPN NBA analyst and former New York Knicks coach Jeff Van Gundy have also emerged. Nets assistant Mike D'Antoni's name was also lobbied, but with his history of coaching nondefensive teams, he could be a hard sell to the fanbase.

The Blazers didn't return a request for comment when contacted by CNBC.

But should he get his coaching wish, Lillard would still need to see the Blazers make moves to try and upgrade the roster, which was among the worst in the league on defense. A top asset like guard CJ McCollum could attract a healthy return. McCollum will make $30 million next season, part of a three-year extension.

The Cleveland Cavaliers were mentioned as one possible destination for McCollum. The San Antonio Spurs like McCollum, but his name hasn't gained traction within their trade scenarios. A Western Conference executive floated the idea of the Clippers trading Paul George this summer if the team failed to meet expectations. Hence, a possible McCollum to the Clippers package. And if Miami can't lure a Lillard deal, McCollum could be an option there, too.

"To come up short in the first round and for our season to end on our home floor is disappointing," Lillard told reporters after the loss to the Nuggets. When discussing his future, he added, "we'll see what happens. I haven't thought that far out."

Portland Trail Blazers General Manager Neil Oshley looks on during a game between the Portland Trail Blazers and San Antonio Spurs at Moda Center on February 06, 2020 in Portland, Oregon.
Abbie Parr | Getty Images

Olshey's future seems secure for now

Until Stotts' departure, uncertainty about the Blazers' future went all the way up to the top.

Chris McGowan is CEO of Vulcan Sports and Entertainment, which operates the Blazers and Seattle Seahawks. Allen, the co-founder of Microsoft, died in 2018 and his sister, Jody, now has the last word. Olshey reported exclusively to Allen when it came to basketball decisions. But that picture now is more muddied.

Olshey is viewed as a solid executive who has done everything he could to work within the team's budget, and form a good roster around Lillard. And he was critical in keeping the franchise stable after the departure of former franchise star LaMarcus Aldridge in 2015.

Bert Kolde, vice chairman of the Blazers and Seahawks, has been mentioned both locally and by a former team staffer as the person who could insert himself as a loud voice in future basketball affairs. What Kolde knows about hiring basketball executives is unclear. But Olshey's name was in the announcement to part ways with Stotts, so it appears he'll get another shot to run basketball operations.

On the business side, McGowan doesn't want the pressure of losing Lillard, either.

When a rebuild occurs, a team loses leverage in negotiating corporate partnerships. The Blazers will be navigating a new regional sports network partner, moving from NBC Sports Northwest to AT&T's Root Sports. Distribution issues have been a concern for the team for years and has cost it audience reach. But entering a new local TV deal with no superstar isn't ideal.

Lillard is a huge financial draw, and losing him could be devastating. There would likely be fewer nationally televised games. It's here the team's jersey patch asset could take a hit because less exposure makes that advertising real estate less attractive.

The good news for the Trail Blazers is that Portland has proven to provide a loyal fanbase. It was the first major sports team in town, followed by Major League Soccer's Portland Timbers and National Women's Soccer League's Thorns FC.

Since 2007, the Blazers finished in the top 10 in NBA attendance. The team was fifth in 2020 before the pandemic struck, according to ESPN's NBA attendance. The team brings in more than $240 million in annual revenue, according to Forbes.

Lillard's value is no secret to management. A team executive, who asked not to be named so he could speak candidly, told CNBC that a Lillard departure is the biggest risk to the franchise's value declining.

The executive added that the team as currently constructed clearly isn't good enough to win a title. Regardless of who's to blame, the person said, big changes have to be made.

Stotts was the first move. Now fans, corporate partners and the rest of the NBA are waiting to see what's next in Portland. And most of all, if Lillard's loyalty will keep the Blazers business from crumbling.

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