Could bad deal mean end to Jazz in Utah?

Small-market NBA teams facing tough times

Published: Sunday, Nov. 20 2011 10:00 p.m. MST

Gail Miller, wife of late Jazz owner Larry H. Miller, gets a hug from her son Greg during a special halftime ceremony in which the court at the EnergySolutions Arena was renamed the Larry H. Miller Court in honor of the late Jazz owner.

Keith Johnson, Deseret News archives

SALT LAKE CITY — The ongoing NBA lockout situation presents a dilemma for the Utah Jazz and their fans.

Everybody wants basketball to be played, not delayed by a labor mess.

But even if it brings pro hoops back sooner than later, an unfavorable collective bargaining resolution for Utah could adversely affect the organization as it tries to maintain a tradition of winning despite market-size challenges.

In fact, one source with intimate knowledge of the Larry H. Miller Group of Companies' inner workings speculated that small-market-related economic hardships could force Jazz ownership to place a "For Sale" sign on the franchise. The source told the Deseret News that the Jazz were expected to report losses in the $17 million range for the 2010-11 season.

"If I was a betting man," the source said, "my guess is that the Millers will sell the team within the next five years, unless this CBA changes the formula so that the team can make some money."

Others say the Millers will never sell the Jazz.

The late Larry H. Miller viewed the Jazz as a "community gift" to Utah. The self-made entrepreneur once put it like this, "Selling the Jazz would be like selling Canyonlands."

From his vantage point, RSL owner and pro sports mogul Dave Checketts can't envision the Miller family selling the Jazz. He doesn't view their commitment as conditional.

"I think the Jazz have a tremendous, tremendous fan following. I think teams like that will always exist in the markets they're in," said Checketts, whose resume includes time spent as the Jazz's president and general manager.

"I don't think the Jazz are an endangered species."

Fans can thank NBA commissioner David Stern's league-wide gag order on lockout talk for Jazz CEO Greg Miller's decision to turn down an interview request.

"Based on the circumstances," Jazz spokesman Jonathan Rinehart said, "we respectfully decline to comment on your questions."

Despite his current silence, Miller hasn't shied from emphasizing his intent to keep the Jazz in the family and in Utah. He told a packed EnergySolutions Arena at the 2009-10 season-opener that his family would ensure the Jazz stay in Utah as long as the support remained.

"These fans," he said that night, "are the engine of the Utah Jazz."

Even so, the Millers would make an enormous profit by selling the franchise.

According to Forbes, the Jazz are the 16th most valuable NBA franchise and are worth $343 million. While that's down from its $358 million value in 2008, the late Larry H. Miller bought the team outright from Sam Battistone for $24 million in 1986.

But due to circumstances, the Jazz would be in a much stronger financial situation with a more generous revenue-sharing model between the NBA's 30 owners and a greater share of the league's Basketball Related Income (players have earned 57 percent of BRI).

"Greg has consistently stated that as long as owning the Jazz makes financial sense, the Millers will own the team," the source said. "However, under the current system, it doesn't make financial sense."

Miller seemed to agree with that sentiment during an interview with ESPN last year when he said, "almost anything we did with our money would get a better return on investment."

But, Miller added about Jazz ownership, "it's really a community asset that our family is charged with running."

Before the 2006 season tipped off, eight NBA owners sent a petition letter to Stern.

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