Part of the deal the Hornets have with the state of Louisiana (which owns their arena) is that if the Hornets do not meet certain revenue benchmarks, the state has to make them up.
Gov. Bobby Jindal said Monday the state will have to pay the team about $7 million this season, the Times-Picayune reports.
In January, the Hornets surpassed the attendance benchmark average of 14,735, a requirement in their lease agreement with the state. But there also is a revenue benchmark included in the team’s amended lease agreement that stipulates the state will have to pay the Hornets’ inducements not exceeding $7.5 million at the end of this season if the team doesn’t gross at least $43.6 million, which is 80 percent of their gross revenue for all potential ticket sales.
You can imagine how well that is going to go over in this economy, with the state tightening its budget everywhere — education programs for at-risk youth, park and museum hours, social services and more are proposed to be cut in the next Louisiana budget. The money for the Hornets was included in last year’s budget.
Jindal made the announcement at an event trying to promote season tickets for the Hornets, the next step in a public/private effort to make it more viable for the Hornets to stay in New Orleans. Getting the finances of the team in order is the first step in finding a new owner that would keep the team in New Orleans. Which is an uphill task but the NBA is at least going through the motions on it.