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News » Jazz execs plan to ride out auto industry slump


Jazz execs plan to ride out auto industry slump


Jazz execs plan to ride out auto industry slump
The headlines out of Detroit have been difficult to ignore this season, but they've had nothing to do with Allen Iverson's arrival in a November trade, Michael Curry's first season as Pistons coach or Rasheed Wallace's always-climbing technical foul count.

Instead, the news has concerned the auto industry's historic collapse.

The $17.4 billion federal bailout for General Motors and Chrysler.

The 35 percent decline in national December new car sales.

The first projected loss for Toyota in 70 years in business.

With Jazz owner Larry Miller operating one of the nation's largest networks of car dealerships, the question is whether the downturn on one side of operations will affect the Jazz and what they can spend, especially looking ahead to this summer.

For now, the answer is no, according to chief executive Greg Miller.

The Millers have not closed any dealerships, and though sales have declined, their numbers are better comparatively than those nationwide during the current auto crisis.

"If business holds up at today's levels in the car division, it's really not going to have any carryover with the Jazz," Miller said. "But if you see it drop off significantly from where it is now and our dealers start showing losses, it could have an adverse impact on the Jazz."

The auto industry is coming off its worst sales year since 1992; Chrysler sales were down 53 percent in December.

But Miller said used-car sales were "hanging in there" and he was excited about some of the innovations coming, in particular from Ford.

"People have indicated to us that they're not that far off," Jazz coach Jerry Sloan said of the Millers' sales. "They're down, but they're still doing OK."

Jazz general manager Kevin O'Connor said it was business as usual despite the auto industry turmoil. "They certainly have prepared for this," he said, "and all we're being told is to run your organization like you're supposed to, it's not going to affect us."

The Jazz's payroll stands at $65.8 million this season -- above the NBA's salary cap of $58.7 million and below its luxury-tax threshold of $71.2 million.

The team is carrying the maximum 15 players on its roster.

Estimates of the Jazz's payroll for 2009-10 vary because Carlos Boozer, Mehmet Okur and Kyle Korver all can opt out of their contracts and become free agents. At least five other players will be free agents as well.

At a minimum, the Jazz have $45 million committed to six players -- Andrei Kirilenko, Deron Williams, Matt Harpring, C.J. Miles, Ronnie Brewer and Kosta Koufos -- next season. That's before re-signing Paul Millsap or talking about an extension with Brewer.

O'Connor said the Jazz never have headed into free agency with a set payroll, but have made decisions such as signing Boozer and Okur in the summer of 2004 or matching Oklahoma City's offer to Miles last summer based on the market.

"We're planning on trying to be aggressive and put a team on the court that can compete for a championship," O'Connor said.

Miller reiterated the Jazz's opposition to paying the luxury tax, but said of potential salary-adding moves: "As long as something made sense, I wouldn't be particularly scared going into the future."

The Jazz also said the decision to decline a $1.2 million option in 2007 first-round draft pick Morris Almond's contract for 2009-10 was made not because of payroll concerns, but owing to the crowd of young guards on the roster after Miles was re-signed.

Both on the floor and at the box office, the Jazz have remained competitive this season.

The team is 21-15 despite early-season injuries to Boozer and Williams and has announced sellout crowds for all but one home game.

"We're really trying to take the approach of doing everything to get through this season," team president Randy Rigby said, "and doing everything possible to finish this season on a strong note and then worry about next season."

Rigby said season-ticket renewals would go out in the next 30 to 45 days. He added that the Jazz were trying to be receptive to fans with the current economy. "We're looking at really trying to do things as far as holding ticket pricing as much as possible."

John Garff, chief executive of the Ken Garff Automotive Group, said projections for an auto industry recovery were "all over the map," possibly as early as the second half of 2009. That said, national sales plummeted by 3 million in 2008, the biggest decline in 25 years.

"Hopefully, we're bouncing on the bottom and we'll find a way to get going in the right direction," Garff said.

David Carter, executive director of the Sports Business Institute at the University of Southern California, noted that the "right owner in the right place is hard to come by" and suggested fans shouldn't be concerned by the Millers' automotive interests.

"I would be taking a much longer look at how well have they run the franchise, how well have they treated the fans, how well have they worked with sponsors and advertisers, how in touch they are with what's going on in the community," Carter said.

rsiler@sltrib.com Slamming on the brakes

In addition to owning the Jazz, the Miller family owns one of the nation's largest networks of car dealerships. A look at the year-over-year decline in sales for automakers in December, at the end of their worst sales year since 1992.

Maker December decline

Chrysler 53 percent

Toyota 37 percent

Honda 35 percent

Ford 32 percent

General Motors 31 percent

Jazz vs. Pistons

Today, 7 p.m., FSN


Author: Fox Sports
Author's Website: http://www.foxsports.com
Added: January 12, 2009

 

 
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