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The question is not "Why was Sam Mitchell fired?" Anyone asking that question hasn't been paying attention or has been letting their biases cloud their judgment. The question is "Why now?"
I've always believed that Bryan Colangelo has never been fully convinced that Sam Mitchell is the coach to lead the Raptors to great heights. When Mitchell won the NBA Coach of the Year award after the 2006-07 season, Colangelo had to give him the benefit of the doubt (his doubt, I have no doubt) that he deserved the opportunity to coach this team for at least one more season. At the time and many times afterward, I pointed out that the main reason the Raptors had a 20-win improvement from '05-06 to '06-07 was that they had nine new players on their roster and two-thirds of the minutes on the '06-07 team came from those new players. Colangelo deserved his Executive of the Year award. Mitchell was just along for the ride.
When the Raptors regressed from 47-35 in '06-07 to 41-41 in '07-08, Colangelo's resolve to bring in his own coach surely strengthened. Then, after the significant changes he made to the roster in the 2008 off-season, he said something that I recognized at the time as an ultimatum for Sam Mitchell. He said that he believed this was the Raptors' strongest team on paper.
The message to Sam was clear: If this team doesn't win games, it's your fault. Now I'm not claiming that this ultimatum is entirely fair. As I pointed out in my post-game blog after last night's Denver debacle, Colangelo deserves his share of blame for the way he's decimated the bench on this team. But fair ain't got nuthin' to do with nuthin' in the business world. Colangelo has a reputation to protect and you know he's not going to blame himself for the Raptors' disappointing start and embarrassing recent play.
Sam has nothing to be ashamed of and much to be proud of in terms of what he accomplished as coach of the Raptors. He was an NBA journeyman whose main claim to fame as a player was scoring the first point in Minnesota Timberwolves history, but his most significant accomplishment was probably mentoring Kevin Garnett. He worked hard and learned enough about the game to earn an assistant coaching job with the Bucks before the Raptors hired him as head coach in 2004. He is the winningest and longest-serving coach in franchise history and I'll be shocked if you'll find a single Raptors player who will have a bad word to speak about Sam.
Regardless, there was a sense that Mitchell was starting to lose the players and Tuesday's Nuggets nightmare made that sense difficult to ignore. NBA coaches tend to have a four- or five-year lifespan before players start to tune them out, and Mitchell was in his fifth season as Raptors coach. If you're not Phil Jackson or Gregg Popovich or Jerry Sloan (Lawrence Frank might join this group), you're not immune to the fickle opinions of fans and the local media — not to mention the GMs that need to deflect blame to protect their own reputations.
No matter what you think of Sam Mitchell, it was time for him to go. My biggest regret about how this was handled is that I would have preferred Colangelo to fire him before the season so the Raptors could have been players in the Mike D'Antoni sweepstakes. I wish Jay Triano well as the interim coach, but I don't think anyone considers him the long-term solution (although my patriotic side would love for him to launch his head coaching career with a Lawrence-Frank-type start).
Now, Colangelo gets to hire his own coach, and if the team continues to play poorly it will become increasingly difficult for him to deflect blame away from himself. This team needs more than a new coach to make it a contender, and most fans will now be watching very closely to see how he addresses the weaknesses on the wing and on the bench.
I've been a Bryan Colangelo cheerleader since he was hired, but now that he finally gets to choose his own coach, I won't be making excuses for him anymore. If this is such a great team on paper, I expect him to show us he can hire the right man to translate that talent onto the court. Another pathetic first-round playoff loss isn't going to cut it this season. 
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