Blog Entry

Stern says Hornets have potential local buyers

Posted on: August 18, 2011 12:57 pm
 
Posted by Royce Young

David Stern recently said that the league is open to looking at contraction. All at once, everyone pretty much said, "Uh oh, New Orleans."

But he made sure to note that the Hornets are actually doing well. Local sponsorships are looking up, ticket sales are solid and a new arena deal with the state could be in the works.

And even better news: Stern might finally be able to get the team off his hands. Via the Times-Picayune:
“We have four or possibly five buyers that engaged us about the purchase of the franchise to remain in Louisiana,” said Stern, who declined to identify them. “We have said that we’re happy to continue conversations, but we need to complete all of the things we’re working on and have a better idea on where the collective bargaining agreement is going to land.”
What makes that important is that while the Hornets may not actually be a prime candidate for contraction so much, they absolutely are in danger of relocating. Ken Berger of CBSSports.com reported that there is a deal in place for the league to keep the team in New Orleans for three years, but once that time frame is up, transplanting the team wouldn't be too difficult.

At the same time, Stern could be rolling the dice with this lockout. For a lot of reasons, but one specifically with the team he owns. The Hornets are on thin ice and damaging fan support and local interest with an extended lockout would greatly hurt the team's chances of remaining in NOLA.

The league had to assume control of the team to trying and keep the value of it up. After George Shinn wanted out and with no local buyer anywhere to be found, the league purchased the team for something like $300 million. But if "four or five" local buyers are in play, that's nothing but great news for Hornets fans in New Orleans.
Comments

Since: Jul 22, 2007
Posted on: August 23, 2011 3:58 pm
 

Stern says Hornets have potential local buyers

Oh and when the the Seahawks & Mariners got their stadiums the economic climate was very much different in the city and in the country.
The funds were not there for a third stadium/arena and the tax payers here were very weary of having to pay for yet another arena for a billionaire owner, I mean how many times can you go to the well in less than a 20 year span? heck less than a 10-15 year span?
Schultz was also very arrogant thinking that because he was head of Starbucks and Starbucks became what they are today starting in the city of Seattle that he would just have everything handed to him by the city and there would be no backlash or push back from the city, state and the tax payers.
He also got out because his limited partners had cash calls that came due and he didn't have the funds to cover those calls that was due to poor planning on his part and his legal teams part but also because of his assumption that he would have a new arena handed to him on a silver platter.
YOU pay for 2 major stadiums in a short am,ount of time then have a third team in the city come and ask for you to pay for theirs as well and you tell me how you would react.





Since: Jul 22, 2007
Posted on: August 23, 2011 3:58 pm
 

Stern says Hornets have potential local buyers

Oh and when the the Seahawks & Mariners got their stadiums the economic climate was very much different in the city and in the country.
The funds were not there for a third stadium/arena and the tax payers here were very weary of having to pay for yet another arena for a billionaire owner, I mean how many times can you go to the well in less than a 20 year span? heck less than a 10-15 year span?
Schultz was also very arrogant thinking that because he was head of Starbucks and Starbucks became what they are today starting in the city of Seattle that he would just have everything handed to him by the city and there would be no backlash or push back from the city, state and the tax payers.
He also got out because his limited partners had cash calls that came due and he didn't have the funds to cover those calls that was due to poor planning on his part and his legal teams part but also because of his assumption that he would have a new arena handed to him on a silver platter.
YOU pay for 2 major stadiums in a short am,ount of time then have a third team in the city come and ask for you to pay for theirs as well and you tell me how you would react.




Since: Jul 22, 2007
Posted on: August 23, 2011 3:53 pm
 

Stern says Hornets have potential local buyers

Key Arena isn't that old, as a matter of fact the morning radio show I used to be a part of featured audio of the host Mitch Levy who at the time of Key Arena opening was on the Sonics broadcasting team talking to David Stern about the arena on opening night after the renovation and all Stern could do was sing the praises of what a state of the art arena it was beautiful.
Just so you know Key Arena DOES have luxury boxes, I know from both seeing them from courtside seats as well as sitting in them for Supes games as well, there may not be as many as other arenas have but they fill the entire midbowl of the arena all the way around.
Key Arena could definitely use some more resturants, bars etc. I've come up with some ideas but those do cost money the city does NOT have right now and if anything there would need to be a private partnership to raise the funds to do so.
That could be done by creating a stadium corporation where you sell shares much like municipal bonds with tiered payback dates so you're not having to pay them back all at once and putting a cash crunch on anyone.
David Stern is completely shortsighted if he lets "principle" get in the way of a team being put in a profitable city, true Key Arena may not be the cash cow some other arenas are but at least the team wouldn't be hemorraging money like they've done in New Orleans with extremely low attendance and fan apathy, at some point you have to do what's best for the league and what's best for the league is going to a known commodity and do so with a strong ownership group that also has deep ties to the business community to make it a win win situation all around.
Key Arena isn't perfect but nor is it a decrepit building, not in the least, it has it's design flaws, was designed to be an intimate arena by the owner prior to Howard Schultz - Barry Ackerly, who wanted the Supes to be the only game in town at the Key, the sity was shortsighted in allowing him to have final say on the design but by no means does it make it obsolete.
Clay Bennett KNEW the demands he was making on the city weren't going to be met, he had ZERO clout with the city, even as owner of the Sonics, he had ZERO history, ZERO credibility and he came in making HUGE demands.
He made NO effort to be creative in renovating Key Arena, he had no interest in renovating Key Arena, he came in and said "I want a brand new arena and I want to pay NOTHING for it" which was absolute lunacy!
He could have gotten creative with the city, brought in partners only in the Arena, still staying majority owner, not bringing in limited partners in the group but rather merely bringing in people to invest in the building.
Let's also look at TV market size, you've got the # 14 TV market in Seattle versus the # 31 tv market in Kansas City, tell me that having the NBA is smaller markets helps with their TV deal and I'll tell you how crazy you are.
If Stern wants to cut off his nose to spite his face and bully cities to give him what he wants then fine, have at it but I'll say this, he's doing the NBA a great disservice just to "prove a point".
If he wants he can have NBA teams in REAL cities like Boston, NY, Philly, LA, Chicago etc and then a second tier which are basically CBA cities where it may be the only game in town but at the end of the day do those cities excite national advertisers? do those cities strenghten the leagues bargaining power when it comes to a TV deal? The answer is no, and yeah it's nice to have the NBA in a few smaller metropolitan areas but if you keep on the path you're on you're going to have too many in those small cities and the league WILL end up losing in the end.
I also don't agree that NBA owners should be given arenas for free, it should be a partnership with the city, i don't care to hear how much they say they bring in to the city you don't get a house handed to you for free in a city because they think you may attract lots of well heeled citizens to move in and patronize the local businesses so why should an NBA arena be any different?
Look at what Robert Kraft did in my hometown with Gillette Stadium, true he built it on his own and the state only pitched in for the roads around the stadium but that's one example right there. My vision is more like a 50-50 partnership or a 60-40 with the city pitching in just a bit more as a good faith gesture but at least the owner has some sort of stake in the arena and care about cost overruns and other issues.
Like I said it can be done but to ask a city, ANY city to shoulder the burden of building an arena YOU will receive most if not ALL the ticket revenue and concession revenue and in some cases parking revenue from it's just craziness especially given the current economic climate.
The NBA is going to have to change it's business model, this strike right now will make that a reality in part also because the NBA doesn't have anyone like Robert Kraft, Jerry Jones, Art Rooney or the Mara family negotiating on it's behalf, the league is going to lose and it WILL affect teams bottom lines which then will affect where basketball is played THEN we'll see where teams move to, do I go to a small market where I may or may not get to be big and what happens if I have some losing seasons? do the fans still show? or do I go to a known quantity and find creative ways to improve the building where the team plays to maximize revenue?
One last thing, John Henry's group bought the Red Sox and yes  they got a beloved ballpark but they also got one that was built in 1912, what have they done since buying the team? they've improved and expanded the ball park, added the "Game On!" restaurant/sports bar, added seating in new areas, improved the concourses, retook some space that was unused for YEARS to make an outdoor picnic area inside the ballpark.
Point is they took what they had and made it better, did one project at a time at the end of every season, they literally had the construction crews standing by and at the ready the moment the season was over, they then started working literally the day/night of the last game of the season was played.
There's so much land around Key Arena, the East end of the stadium could have a sports bar added to it that you could sell naming rights to : "The Boeing Hangar at key Arena"The pre and post game shows would be broadcast from there and the bar would be open not just on game days but every day to maximize revenue, youi could build a deck that extends out over the west end of the stadium and have it up high enough so that it takes advantage of the spectacular view of Puget Sound and put a high end restaurant there perhaps in partnership with Chef Tom Douglas who has a few restaurants here in Seattle is famous the world over, I would also expand the west end of the stadium, take out the stairs outside that don't really serve any purpiose but a pass through from one side of Seattle Center to the other so you can make the ice surface in the arena NHL sized and try to have the Canucks to play some preseason or maybe even 2-3 "home" games at the Key, I would spruce up the suites a bit, not sure if you could add more but it could be explored where you took some upper bowl seating out and built suites that would have access to the restaurant on the deck before the game for cocktails & dinner and after the game for cocktails and for those who wish to let most of the trafffic get moving before they leave.
All of this could have been done if Bennett had partnered with the right people, was creative about how it got paid for and he wouldn't have taken on the cost or a very minimal cost but the truth is he never wanted to and he knew the demands he was going to make wouldn't be met so it was a bit of a "fait accompli" where he had decided LONG before he took over the team what he was going to do.



Since: Sep 8, 2007
Posted on: August 19, 2011 1:09 am
 

Stern says Hornets have potential local buyers

Bison is right about a few things, and wrong/in denial others. I'll explain.

Yes, Clay Bennett had no intention of staying in Seattle, but if he had gotten a new arena there, he would have had to stay. He would have been "trapped" in a win-win situation: A sweet new arena with lots of funding potential, and he could easily sell the team for far more than the $350 million he paid for it to a new PNW-based ownership group such as Steve Ballmer, or, the other win-win was if Seattle didn't build him a new arena, he is free to relocate to OKC. All of this was made possible because former Sonics majority owner and Starbucks CEO Howard Schultz decided to sell the team to Clay Bennett. Howard Schultz made the decision to sell the Sonics to an ownership group from Oklahoma City that was very intent on having a team in OKC after the Hornets had temporarily relocated there due to Katrina. Bison is quick to point out Bennett was a minority owner in the Spurs and fought to try to get the Spurs to move to OKC to no avail, and obviously Bennett tried to buy the Hornets from George Shinn, but Shinn said no, or only 49%, but how could people in Seattle not think Bennett would try to get the team moved knowing Bennett's past? The people of Seattle should have stepped up and put pressure on their civic leaders, and not enough of the people's voices were apparently heard. Point is:  Seattle knew what was coming when Bennett bought the team, and the majority of Seattle laughed it off, thinking no way would the Sonics move after a 40-year history there to some untested "cowtown" like OKC. They were wrong to laugh it off. The Seattle brass felt their arena was just fine, yet it was far substandard than any other arena in the NBA by far.

Once Schultz sold, Bennett knew he was in the exclusive NBA ownership club, and he'd eventually get a team to OKC one way or another, whether it be a Sonics-Hornet-Grizzlies team swap, relocate the Sonics, or some other arrangement. All he needed was to get into the club. Fortunately for Clay Bennett and the people of Oklahoma City, as Bison points out, the mayor at the time of Seattle, Greg Nickels, and the rest of the government brass in the area would not give him a new arena under any circumstances even though the Seahawks and Mariners got shiny-new taxpayer-funded arenas just a few years before. This is exactly why Howard Schultz got out. No one David Stern would have eventually brokered a deal for Bennett to sell the Sonics to a PNW ownership group in exchange for Bennett to buy the next NBA team up for grabs, which would have been the Hornets. 

Bison is 100% correct that the Sonics fans always supported their Sonics. However, he's in denial that any NBA team will move back to Seattle until they get a new arena. KeyArena is not going to work, and Seattle has been told this for about 6-7 years now. If they want a team, they need a new arena. Bennett was in the driver's seat. He did not have to put up a dime (after all, he just paid $350 million for the team) for a new arena. He was going to win either way. Seattle should have done the responsible thing and just paid for a new arena with some revenue streams attached. 

David Stern won't move a team back to Seattle without a new arena in place just out of sheer principle. He's not going to get pushed around by a particular city. If Seattle keeps saying over and over "Key Arena is good enough" they are never going to get a team. This is nothing new, and Seattle needs to realize this at some point. Quit the "sure, it needs some upgrades" stuff and man up and get a new arena so you can have a team!!

All that being said, I'm originally from Oklahoma City, and I am thrilled the NBA came to my home town, but I would love to see a new version of the Sonics. I would love to see the Sonics reborn there in Seattle. NBA teams need revenue streams, luxury boxes, restuarants, "state-of-the-art facilities." All the NBA owners will stick together on this because they need the revenue. They need those 18,000+ seats, lots of luxury boxes, etc --- in other words not something like KeyArena.

Also, with a fine facility like the Sprint Center sitting idly in Kansas City, you'd really think Seattle would say 'hmmmm...  maybe our KeyArena doesn't compare too well compared to that thing' and figure it out someday. I hope they do.
 

      
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Since: May 17, 2007
Posted on: August 18, 2011 5:19 pm
 

Stern says Hornets have potential local buyers

Well that's good news for the people of New Orleans.  For the stupid person wanting to buy the team that is another story.  The city was having problems supporting teams before Katrina!  I have been told over and over that the population of the city has never gotten back to the level it was before as many people have stayed in Texas or whatever place they went too after the migration.

I still have to wonder why people keep spending money to keep this city going.  A city whose name I don't have at the moment in Texas was wiped off the map by a huricane much like New Orleans did and they just never rebuilt it.  This is after the fact that levees have been needed since time began to keep water out of the city anyway.  On top of that the Mississipi river wanted to change it's course to the Atchafalaya River like it had in the past but because of the docks in New Orleans the US Army of Engineers kept it flowing towards New Orleans against the wishes of nature.

AT WHAT POINT DO YOU REALIZE THAT THIS TOWN AT THE VERY LEAST SHOULD BE SHRUNK!



Since: Jul 22, 2007
Posted on: August 18, 2011 5:07 pm
 

Stern says Hornets have potential local buyers

No, they love COLLEGE basketball in Kansas, HUGE difference!
Look at the Jags in the NFL, don't do well attendance wise because it's a college market same with Kansas & basketball.
I agree that Katrina did save the Hornets because Stern didn't want to look like the person who abandoned New Orleans, nor did he want the NBA to look that way either.
New Orleans has had 2 NBA teams and neither one have worked out - what you thought the Jazz were a Utah team from the get go? When was the last time you heard people mentioning Jazz - as in the music and Utah in the same breath?
If the commissioner wants to keep the Hornets in New Orleans so bad, so be it BUT what he's going to find is that new ownership is going to encounter the same problems the old ownership did, people aren't going to start showing up and supporting the team just because iof a new owner taking over.
What the commissioner needs to do is find a buyer in the Northwest and let the Hornets relocate to Seattle - true Key Arena needs some upgrades but it's not a terrible facility, truth is Clay Bennett never had any intention of keeping the team in Seattle even if he got the free arena he wanted so badly.
Heck he tried to petition the other partners with the Spurs to move them to OKC when he was a limited partner in San Antonio.
The fact is that Seattle always supported the Sonics, the fans fought to the end to keep the team we just had a mayor at the time and a city council not wanting to do what was necessary to keep the team in Seattle.
I will also say that asking a city to build you a free arena with you shouldering none of the cost is too much to ask, had Bennett offered a plan to share the cost of the arena remodel with the city than it could have happened and you could have done a lot of naming rights to new areas of the arena as well to bring in revenue to offset the cost.
In any event the commissioner was fine with abandoning Seattle aftr 40+ years of support and now he wants to grant a thirds chance to a city that has shown time & again they don't support NBA basketball, it makes NO sense to me!



Since: Feb 24, 2007
Posted on: August 18, 2011 2:38 pm
 

Stern says Hornets have potential local buyers

The facts are Katrina "saved" the Hornets. Stern has had a soft spot for (be it real or for PR purposes) for the Hornets since Katrina ravaged the Crecent City. The relocation to OKC immediately following Katrins was a resounding success but Stern still chose to move the team back south, which was at the time perfectly understandable.

Now OKC enjoys one of the, if not the, youngest and most exciting clubs in the NBA while NOLA is stuck with Chrs "Here to Today, Gone Tomorrow" Paul, Mr. Wild Wild West and a bunch of bit playahs'. Stern needs to move the team. The city is and will always be a FOOTBALL town. The recent successes of the Saints and LSU has fueled an already roaring fire leaving little capitol or emotion left for the barely average Hornets. Every year the Hornets meet their MINIMUM attendance quota by giving away or greatly reducing ticket prices...this is not sustainable.

Solution....move the team to Kansas City, they love B-Ball in Kansas.


The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com