Tag: George Shinn

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David Stern’s New Orleans public relations problem

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CNBC’s sports business reporter Daren Rovell has posted laundry list of why it is a bad idea for the NBA to have taken over ownership of the New Orleans Hornets.

David Stern says they plan to make a profit, but Rovell notes that right now the value of franchises is not rising and the lockout would make that worse.

Rovell notes that other leagues that have bought teams have lost money on the transaction. (Except for Major League Baseball, which bought the Montreal Expos with the express intent of auctioning them off to an owner who would move them. However the NBA says the goal is to keep the Hornets in New Orleans.) Right now there are no potential owners from New Orleans, or George Shinn would have sold to them.

If the Hornets have to be sold out of town, Stern has a problem on his hands.

The last point is the public relations disaster that this could create. If George Shinn and Gary Chouest couldn’t make it in New Orleans, fine. They’d say that and leave. Now it’s the NBA’s business to put this team in the best position it can and if they leave New Orleans it will be the league’s fault, not Shinn or Chouest’s fault, that they left.

Stern may go with the Seattle playbook here. Push for the state to help with arena and make financial concessions to keep the team and ask for the moon, When that doesn’t come through — it shouldn’t, Louisiana has more important things to spend money on — he can say there was not enough cooperation and there was no choice but to sell out of town.

But Seattle remains a PR disaster for the league, and now pulling out of New Orleans would be worse. So Stern is stuck trying to find someone to buy the team and keep them in one of the smallest and most economically depressed markets in the league. Good luck.

NBA confirms it is buying Hornets; players shrug.

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The NBA finally officially confirmed Monday what had been reported for days — the league is going to take over operations of the New Orleans Hornets in the coming days.

George Shinn will sell the team to the NBA — meaning the other owners will put up the money to buy him out — then the league will find a buyer for the franchise.

“George Shinn has been an exceptional owner for New Orleans and Gary Chouest has been extraordinarily supportive as a minority owner,” said NBA Commissioner David Stern in a statement.  “However, in light of the uncertain economic situation in New Orleans and Louisiana, Gary has decided not to move forward with the purchase of George’s majority interest although he was prepared to remain an investor in the team.  In the absence of any viable purchaser seeking to own the Hornets in New Orleans, I recommended to the NBA Board of Governors that the best way to assure stability and the adequate funding of the franchise would be for the league to step in, and complete the transaction and assume control.  The Hornets have a strong management team in Hugh Weber, Dell Demps, and Monty Williams and we have recruited Jac Sperling, a seasoned sports executive and New Orleans native, to be the team’s chairman and governor, with Hugh serving as president and alternate governor.  I have notified Governor Jindal and Mayor Landrieu about this transaction and will continue our dialogue with them about ways to strengthen the franchise for new ownership in New Orleans.”

Shinn is rumored to have wanted to sell the team before Jan. 1 to avoid an estate tax issue.

He came to the NBA to buy the team because the offers he was seeing were from people wanting to move the team out of New Orleans.

“When we were unable to complete the transaction with Gary, I suggested to the Commissioner that the league consider the purchase of the Hornets,” Shinn said in a statement. ” I wanted to ensure that the team remained in New Orleans, if that was possible, and recognized that the league could provide the necessary funding while a new owner was sought in New Orleans and negotiations with the city and the state could continue.”

The league will try to find a buyer in New Orleans. But the other owners also want to get paid back, and if eventually the best offer comes from outside the area, then the Hornets will be on the move. It’s a complex issue.

But that’s down the line, what is happening on the ground. How are the players dealing with it? They told the Times-Picayune that they can’t dwell on something they have no control over.

“I really don’t know what it means,” veteran guard Willie Green said. “I know it’s definitely something that’s going on with the ownership and the league, but as a player I guess I really don’t understand or know what that means right now.

“Obviously, we’ll find out more information as time progresses, but my thinking right now is I’m just trying to make sure I focus in on the things I can control. And obviously that’s not one of them. But I’m sure we’ll find out how it impacts us as an organization and team later.”

Chris Paul said it best.

“I’m trying to figure out how we got beat so bad by the Spurs,” Paul said after a 109-84 loss. “I control what I can control. And that’s how our team plays. I’m just trying to figure out how we can win another game.”

League takeover of Hornets to come by Wednesday

Milwaukee Bucks v New Orleans Hornets

It comes down to this: owner George Shinn is out of money he will spend to run the New Orleans Hornets and he can’t find a buyer.

The league is going to step in and step in soon — both ESPN and Sports Illustrated are reporting the league could take over operations of the team in the next 48 hours. ESPN’s Marc Stein added it will be by Wednesday at the latest. We told you earlier today the league has found its man to run the team, so everything seems to be in place.

The move by the league was necessitated by the collapse of talks between Shinn and minority owner Gary Chouest to buy the team. Back in October at a Board of Governor’s meeting the idea of the league taking over the franchise was first discussed with the other owners.

This move by the league raises as many questions as it answers.

Certainly the league will try to find owners to keep the team in New Orleans, that will get a lot of lip service from David Stern and everyone involved. But what if the highest bidder comes in and wants to move the team? Attendance is reaching a point where the Hornets could break their lease with the state-run New Orleans Arena. And New Orleans is one of the smallest of the current NBA markets.

Could this be a Seattle situation all over again, where an owner gives lip service to keeping a team in town then moves it out as fast as possible?

Secondly, what about Chris Paul? This summer he pushed the Hornets to either get better or trade him. They have gotten a little better just due to health and some inexpensive but smart moves. But will they be able to bring in the big moves that will keep Paul, who can be a free agent in 2012? Will the league — meaning the other owners — approve big moves like trading Peja Stojakovic and taking on more salary there to improve the team?

The only thing we know for sure is the league is stepping in and stepping in fast.

The NBA may buy the Hornets. Yes, the situation is that bad.

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Okay, so a lot’s happened in the last 24 hours (most of which actually happened last week, but we’ll get to that) with the ownership situation in New Orleans. The world is much different than it was two days ago. In short, the NBA is closing in on the purchase of the New Orleans Hornets by the league itself.

Apparently, in a Sports Illustrated story by Ian Thomsen last week, a reference was made to league considering purchasing the Hornets in an effort to stabilize the ownership situation with George Shinn wanting out-out-out and negotiations with Gary Chouest stalling. This slipped by most of us because, really, who reads things you have to hold anymore, besides your grandmother? (All kidding aside, the fact that this slipped by is pretty staggering).

Marc Stein of ESPN followed up last night and reported that the league is indeed in consideration of acquiring the Hornets in a situation similar to that of what MLB did with the Expos. Immediately following that, the Times Picayune reported that Gary Chouest was dropping out of negotiations for majority ownership. This morning, John Reid at that established publication reports that Chouest was concerned about the impending work stoppage as well as his ability to devote the necessary time to the franchise.

(Pant, pant. Okay, here we go again.)

This morning, NBA FanHouse’s Sam Amick reports that not only is the league considering it, they are well on their way towards moving to acquire the team, and have even selected personnel to run the team in the interim while it works to find stable ownership. The league obviously is not looking to hold the team long-term, but is looking to find ownership which will keep the team in New Orleans and avoid a very dicey PR situation with the second team moving in three years and less than a half decade after Katrina and all its horror.

And all of this is after it was revealed that the team would have an opt-out from its lease if attendance measures didn’t dramatically recover which would drop the Hornets penalties for bolting New Orleans to a mere $10 million.

The league exploring this drastic of a solution leads to the question of whether they’re concerned that current majority owner George Shinn, desperate to dump his ownership, might sell the team to someone who may not be committed to keeping the team in the Crescent City. Alternatively, it may simply be a sign of the times that there’s not another viable option the league is willing to wait on. This will be the fourth team in the past year to change ownership, which is, you know, kind of a lot.

The league also will want to resolve the situation quickly, since having control of the ownership is A. a drain on resources and B. is likely to have complications with the CBA negotiations coming this summer, particularly with the Hornets being a small-market team which is a major issue in negotiations. It’s also a very controlling move by the league, which has not been hands-on with ownership situations (as opposed to players issues which they have been very hands-on with). The league did not intercede with the Dolan-Thomas disaster in New York, nor with the Cohan issues in Golden State. We’re looking at a situation without precedent in basketball, and one which could have far-reaching implications for how how the league handles such matters in the future, the CBA negotiations, and most importantly, the future of professional basketball in New Orleans.

Commissioner David Stern already came under enough fire for his involvement with the Clay-Bennett-backed move of the Sonics to OKC where he was seen as more of a willing accomplice than an outright actor. But if the league is unable to find a local ownership group to satisfy the league’s requirements and a stronger offer is brought from a group in a prospective NBA city (like Kansas City, Anaheim, Las Vegas, or Seattle), it could be seen as a deliberate effort by the league to get out of what some consider to be an impossible market in New Orleans, despite what Hornets president Hugh Weber says is a situation that can work. Take a second and realize that should the NBA relocate the Hornets to Seattle it would be viewed as a good thing by many of the big-market-leaning press and a rectification of past sins by the league in moving the Sonics to begin with. And it would likely mean the outright dissolution of the Hornets franchise itself (as a reversion back to the Sonics would be nearly a lock).

This is all very unlikely, as the league’s first and foremost effort will be to find local ownership committed to New Orleans. But with an arena many consider to be far below NBA standards, in a market far below what most consider NBA standards, and with a fanbase showing a lack of support far below NBA standards, this could drag on, locking the NBA in a quagmire of their own.

This is a whole new ballgame.

Hornets attendance slump could let them break lease, move

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Wins or not, Chris Paul or not, getting people to come to New Orleans Hornets games has not been easy. Frankly, it wasn’t easy when the team was the Jazz and Pistol Pete putting on the show. Today little has changed.

The current downward slump in attendance will trigger a clause in the Hornets current lease agreement with the state that could allow them to move, according to the Times Picayune.

If the Hornets do not average crowds of at least 14,213 for the next 13 games at the New Orleans Arena, the franchise can opt out of its current lease agreement with the state, according to Doug Thornton, vice president of SMG, the company that manages the Arena and the Superdome.

Despite a franchise-record start, the Hornets have experienced a decline in attendance. This season, attendance has dipped to an average of 14,214 over the first eight games, which ranks 25th in the 30-team league. Last season, the Hornets averaged 15,072 for 42 home dates. The New Orleans Arena seats 17,188 for NBA games.

Of course, the potential sale of the team plays into this. Current but outgoing owner George Shinn seems the type that would seriously consider other offers. Incoming owner Gary Chouest is a gulf energy guy and a New Orleans guy who seems unlikely to move the team. But the sale has yet to go through.

The Hornets are not imminently on the move. But this is a situation worth watching.