With league as new owners, Hornets could likely find new home
David Stern announced the NBA would take over ownership of the Hornets
If they relocate, top cities include Chicago, Anaheim, San Jose, Kansas City
The commissioner is meeting with potential international investors next week
Now that commissioner David Stern essentially owns the Hornets after the NBA purchased the team Monday from majority stakeholder George Shinn, what is the likelihood the team will remain in New Orleans? Small odds they stay put, I say.
Four big questions surround the NBA's purchase and resale of the Hornets. (This is apart from questions about their roster: How interesting was it to hear Marc Spears of Yahoo! ask Stern how he'll approach the impending free agency of All-Star forward David West, even as Stern is in negotiations with West's union over a new collective bargaining agreement? "That's a bridge that we're not planning to cross today," replied Stern with a detachment unusual among team executives.) Here are the assessments -- in most cases there can be no firm answers -- of those questions as they stand today:
Will they stay or will they go? The Hornets are essentially a free-agent franchise: They can opt out of their lease should they average fewer than 14,213 fans over a span of 13 home games from Dec. 1 to Jan. 17. Through the first two games of this window they were averaging a scant 12,443.
The 13-7 Hornets currently rank No. 27 in NBA attendance at 13,860 per game.
I asked Stern if the value of the franchise could rise based on the team's ability to move? "I guess that raises the value of the franchise no matter who owns the team," said Stern. "That's just one factor. I think the lease itself, without that clause, doesn't run beyond 2014, which is going to be here before you know it."
Stern said the league will seek from Gov. Bobby Jindal a more accommodating lease, similar to the lucrative deal Louisiana has provided the NFL's Saints. The commissioner made it clear that his first choice is to keep the team in New Orleans, and that he'll use the remainder of the season to investigate the financing and management of the team to discover whether there is a future in remaining in one of the league's smallest markets.
The hiring of New Orleans native Jac Sperling to serve as caretaker of the team is another sign that the league will be focusing on the local market. But the market itself will take care of this. Unless a prospective owner steps forward with the goal of keeping the team in Louisiana, the NBA can't afford to cut short its options. Its ability to move to a larger market is one of the most attractive qualities of this franchise, and the NBA isn't going to reduce the value of a franchise -- which would hurt the value of the league is a whole -- in order to keep the Hornets in a city it has called home for only seven years (including this season). Based on the league's brief affiliation with New Orleans, the argument can be made that no franchise would have an easier time saying goodbye and moving elsewhere than the Hornets.
Stern added that a sale may not be completed until after a new collective bargaining agreement has been reached with the players. This would make sense as franchise values are expected to climb under the next deal.
Where could they land? Look at it this way: If a new owner is willing to spend more than $300 million -- the value assigned Monday by Stern -- on an NBA franchise with the understanding he can place the team wherever he pleases, then New Orleans becomes one of several options. The new owner will relate his options to those of LeBron James last summer: James was tied in every way to the Cleveland area, but after his Cavaliers contract expired he came to view his hometown less sentimentally and more clinically, resulting in his business decision to take his talents elsewhere.
Unless fans swarm to the New Orleans Arena in order to keep their franchise at home for the shortterm, the new owner of the Hornets will place New Orleans in a pool among larger available markets, including Chicago, Anaheim, San Jose and Kansas City. There hasn't been a lot of talk elsewhere about Chicago, but it is the third biggest market in North America and it has only one NBA team. New York will have two franchises when the Nets move to Brooklyn in two years, and Los Angeles has two. In suburban Chicago near O'Hare Airport, the Allstate Arena could serve as a temporary NBA home until a new arena could be built, depending on the resources of the new owner.
If the Hornets are able to escape their lease, then New Orleans will have to compete with other cities to serve as home to an NBA team.
Who will buy them? The NBA will look for local ownership, but George Shinn wasn't able to find a candidate beyond minority owner Gary Chouest, who after a long courtship withdrew from negotiations to take over the team.
Two big-picture goals for Stern are to (1) raise the values of his franchises and (2) do so by encouraging foreign investment. Will both of these ambitions be married by the sale of the Hornets?
An oil-rich buyer from the Middle East could purchase the Hornets from Stern himself, then move them to a more prosperous market. I don't mean to keep harping on the potential of Chicago, but it has to be the most alluring location on the crowded North American map; if a Saudi billionaire were to move the team to Chicago then he could eventually build himself a new arena, much as Russian owner Mikhail Prokhorov is doing for the Nets in Brooklyn.
Stern said he just so happens to have a meeting scheduled next week with potential international investors.
What does this mean for Chris Paul? He won't be traded while the league is in possession of the franchise. Thereafter his future will depend on the identity of the next owner and the site of the Hornets' home. A rich owner in an attractive market could entice Paul to remain a Hornet (or whatever the franchise happens to be called) for the remainder of his career. In that sense, this chain reaction of events heightens the possibility -- one of many possibilities, for sure -- that Paul will remain with the franchise for the longterm. The real question, of course, is whether he and the team remain in New Orleans.