Chaos A.D.: Shifting Foundations

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Published: February 8, 2019

The self-declared impending departure of Anthony Davis from the New Orleans Pelicans forces some changes on and off the court. While the franchise is “on the rack,” it’s a good time to look around and see if there are less-obvious things that need attention. I think some changes at the top need to happen, and I mean above the level of Dell Demps. I’m not alone in this, but I am recommending these specific changes to the organizational structure:

  • Mickey Loomis needs to be publicly installed as an ownership-level figure
  • A President of Basketball Operations needs to be hired from the NBA world
  • That new POBO makes the changes if and when and how they see fit, subject only to normal ownership style checks

These changes should all be completed by July 1.

Background

Mickey Loomis is the Executive Vice President and General Manager of the New Orleans Saints. He is also the Executive Vice President of Basketball Operations for the New Orleans Pelicans. Perhaps most importantly, but somehow overlooked, Mr. Loomis joins Dennis Lauscha and Greg Bensel on an ownership level.

The concept of ownership is blurry enough here to make this confusing, so I’ll explain it here in the rest of this section. It can be skipped if you just spot me this point.

The ownership of the team is represented by shares of stock. Ownership can also mean different things. Some of this stock is just about the “right to a share of the money” kind of ownership. Other shares confer voting power, which is control. Now, place that stock into a trust, which is an independent legal entity. It actually has the stock, but the trust as a mere legal entity exists to benefit someone, Ms. Gayle Benson in this case, and it is usually directed by other people. The trust comes with general law governing trusts plus specific rules established by the person that set the trust up, Mr. Tom Benson in this case. Those rules can be guidelines or enforceable by the rule of law, depending on the nature of each rule as how they are laid out.

Continuing with the ownership roles, trusts exist for a few reason, but one reason is to control succession. This can be seen in the Benson family drama that played out across many of Mr. Benson’s final years. Central to that battle were the trusts that held various assets, including the different kinds of shares of the sports franchises. Once the court battle ended, it appeared the structure Mr. Benson intended was in place. Mrs. Gayle Benson was to be the heir, and she is now listed as owner. More importantly, no one else is. The fact that the ownership is conferred in this way is a subtle but important consideration.

So, here’s where it gets interesting. Who’s next?

While it is not clear from the public reports exactly how ownership will pass next, with the shares still remaining in the trust, following some of the control of the organization is clearer. In fact, not much has changed or will change. Mr. Lauscha is still the President of both teams, with his roles being more business and infrastructure focused, not team operations such a player transaction decisions. Greg Bensel is Senior Vice President of Communications for the Saints, Senior Vice President of Communications and Broadcasting for the Pelicans. Importantly, Bensel, Lauscha, and Loomis are also specifically named as decision-makers in the trust, depending on who is alive and other things. Factoring in that Lauscha, for example, represents the organizations at ownership meetings, and you start to see that these men, more so today than last year, are very much more than functionaries. They are the ownership-level figures.

The Issue

The issue with the current structure is not so much one of internal function. I personally think the empire functions just fine. The issue is more a combination of:

  • Actual confusion externally about who is in charge
  • Willful ignorance externally about who is in charge
  • Faked ignorance externally about who is in charge
  • Mr. Loomis saying his basketball role was “greatly overstated”
  • Mr. Loomis objectively being Demps’ superior in Basketball Operations

These are issues of a very different kind, with different sources, but they all have one cure: clarity.

The waters are further clouded by the clinging shadow of the Stern veto. Though this was before current ownership was in place, it is another data point to put into “Demps always has to ask someone” bucket. This is totally irrelevant, but it nevertheless does actually affect the people who are genuinely confused.

Ownership is always a check on management. Always. No one should be surprised by this.

What is confusing is Loomis appearing in a non-traditional role with an unclear function, Demps is the senior Vice President of Basketball Operations, Lauscha the President of the organization, Loomis might be cast more as the President of Basketball Operations. This is a title that makes sense in the NBA circles. Using the Lakers as a reference, since having a parallel structure to them puts you beyond criticism, we see Jeanie Buss is a CEO, Magic is the President of Basketball Operations, and Tim Harris is over business operations. Rob Pelinka, the general manager, reports to Magic. NBA insiders are not confused by this, right or wrong. Examination of this structure illustrates the problem. Is Loomis more like Magic, who works with Pelinka to the extent that working with Pelinka is equivalent to working with the pair in charge? Or is Loomis more like Jeanie Buss who is more over an oversight on the big picture and major moves?

Moreover, as the larger business itself has a non-traditional structure that includes and entire NFL franchise, and Loomis is also a part of that, the fog deepens.

Right or wrong, it causes avoidable problems of varying degree, and it’s worth fixing. The organization, however, cannot just change things on a whim for a couple of reasons. The structure has to respect

  • NBA Norms
  • NFL Norms
  • Actual internal operations, checks, and balances

Moving Forward

Making Loomis Chief Executive Officer seems a reasonable choice. Jeanie Buss and Wyc Grousbeck are both CEO’s in addition to being owners, so there are clear NBA norms set as making that and ownership level title or at least inviting that context. Others would work, of course. I would simply be failing to hold up my end if I did not offer a specific, live option. This may be unacceptable for other reasons.

Mr. Loomis, with others consulting him at his pleasure, should then hire a President of Basketball Operations or something of that type. I think that particular title has value, as I noted above. This POBO should be someone from the NBA world who is also not currently in the Benson circle. Avery Johnson and Joe Dumars might be wonderful and trusted advisers. Use them in that capacity. The POBO should be an addition to the circle. More importantly, while both of these men have had NBA success and are clearly from the NBA world, their Louisiana ties cut both ways. If one of them is the best choice by a country mile, so be it, and people will take pride in local leadership. It would, however, be best to continue to bring in outside voices and names for a few reasons, one of which is to give a piece of objective evidence that a real search in NBA circles took place. This would be in contrast to the false narrative that would arise that the decision was near-thoughtless, merely going with easy choice of “your buddy.” If the search fails, you can always fall back to that. As I said, if they are the best candidate, fine, but do the search.

That President of Basketball Operations would then shape Basketball Operations according to their desires. As they have been vetted by Ownership, as represented by the CEO at a minimum in this case, the POBO’s goals will align with Ownership’s to a satisfactory level, and the ownership check would be minimal at most. Thus, the POBO should be given total authority, subject to only the normal ownership checks, to hire whomever for General Manager and other staff.

It is at this step that the future of Dell Demps should be decided, and it should be decided by the POBO, except in two cases: cause or mutual decision. I’m not even going to entertain cause other than as a logical possibility, but if Demps decides to go for whatever reason and Loomis is ok with that, that should be just fine. What should be avoided is letting Demps go before this point for some sort of “messaging.” The most important message is “the structure:” CEO to POBO, and POBO to GM should be structure, and this order of events uses the GM decision to empower the POBO and set the tone.

Final Note

Mickey Loomis is more than a “football guy,” and people need to get over this lazy attempt to knock the guy. Robert Kraft is not knocked as a paper guy. Malcolm Glazer is not knocked as a fish oil salesman. As owners, their other experiences or the other things in their lives are less of an issue, as owners are seen as needing to be much less active. In fact, that is seen as a plus. So, it’s not what Loomis, others on that level, or what the actual owner does or who they that is really the issue. It’s about the mismatch of expectations. A few real and a few cosmetic changes can go a long way toward making the Pelicans “unremarkable” in all the ways one wants to be unremarkable in the end.

The other thing is this: Flat out, the Saints, today, are a bigger business and demand their fair share of resources, including time. They have stronger overall ties then the Pelicans to the local and national sports landscapes for obvious reasons. The idea that this makes the Pelicans unimportant is fallacious, and it ignores what the sports landscape may be like in 25 years. Ownership should tend to all of its investments in the right measure, and this includes actually giving each the proper attention, hiring people to make up the difference, and making sure stakeholders are confident both of these things are happening.

This organization is unique, and they should be using their uniqueness to their advantage rather than allowing it to be used against them as it is currently, sometimes by the media they work closely with. Commonality at the top, some staff sharing with some staff specialists, bulk marketing efforts, and more all make sense for Bensonia. Use the uniqueness to impose your internal operational wishes, but make all your partners in all your ventures as comfortable as possible in your dealings by giving them, to the extent possible, what they expect at a minimum with no unpleasant surprises. That will minimize anyone using the uniqueness against you, as they have. Set it all up right and the various aspects of the empire will resonate positively in all circles, especially with your fans, who are an army waiting to rally for you.

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