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SBD/Issue 64/FranchisesPrint All
NBA Expected To Close This Week
On Deal To Buy Hornets From Shinn
Outgoing Hornets Owner George Shinn is "lending the NBA" about $70M as part of the league's purchase of the team, a deal that is "expected to close this week," according to sources cited by Kaplan & Lombardo of SPORTSBUSINESS JOURNAL. Shinn will "forgo the money as part of the NBA's acquisition, with the league paying it to him in two years at an interest rate" of roughly 3%. The sources indicated that Shinn this week will receive about $90M "in cash from the league." The remainder of the purchase price, which the NBA said was in excess of $300M, is "debt the league is assuming" (SPORTSBUSINESS JOURNAL, 12/13 issue). Outgoing Hornets Minority Owner Gary Chouest said that if it "was up to him, he would still own" 35% of the team, adding that he "wouldn't close the door on a possible purchase of the team given a different future economic model in the NBA." Chouest, speaking on the record for the first time in three years, said on Friday, "My reasons for investing from day one haven't changed, and I still have the same interests I had from day one. They still exist today." He would not elaborate on why his "expected purchase from Shinn fell through, nor would he give details of his financial end of the league's purchase," referring those questions to NBA Commissioner David Stern. Chouest: "I guess Stern would probably be the best one to answer any questions you might have. I really don't have any comment about the details" (New Orleans TIMES-PICAYUNE, 12/11).
TRYING TO SAVE THE HORNETS: Louisiana Commissioner of Administration Paul Rainwater has "quietly formed an interagency task force aimed at coming up with ways to keep" the Hornets "in Louisiana for the long term." With the state facing an "expected $1.6 billion budget shortfall, it's unlikely the state will have any general fund tax dollars available for an incentive package," but Rainwater said that there "are other ways to structure a deal." Rainwater: "We've discussed some creative ideas to keep them here in Louisiana. We're not going to do anything that jeopardizes funding for higher education and health care" (NOLA.com, 12/12). Friday's Thunder-Hornets game drew an announced crowd of 14,428 at New Orleans Arena. Under their lease agreement with the state, the Hornets "can opt out if their average attendance is not 14,735 by Jan. 31, 2011." Not including Friday's game, the Hornets needed to "average 15,579 for their next 13 games" at home to reach that benchmark (New Orleans TIMES-PICAYUNE, 12/11).
TIME TO PACK? In Boston, Gary Washburn wrote the NBA's purchase of the Hornets "offers hope to those markets that have been seeking a club but had no shot at one because expansion was not in the league’s plans." Stern wants to "give New Orleans every chance to retain the team and is hoping to find local owners willing to withstand short-term losses and secure a new lease in Louisiana." But he "would not deny the possibility of relocation, especially since the Hornets are struggling to draw in New Orleans." K.C.'s Sprint Center is an "NBA-ready arena," though the league "may be wary of bringing a club back to a city where the NBA has been dormant for 25 years." San Jose and Anaheim, two other rumored destinations for the Hornets, "already have NBA teams in their markets, so they may have a difficult time landing another one." That "leaves Seattle, still a sore spot in the NBA offices" (BOSTON GLOBE, 12/12). YAHOO SPORTS' Les Carpenter wrote "without a buyer in Kansas City or a new arena in Seattle, the Hornets aren’t going anywhere." And while "many business analysts looking at bloated leagues such as the NBA cry for contraction, destroying franchises is not an option" (SPORTS.YAHOO.com, 12/10). In Tacoma, John McGrath noted while the Hornets "aren’t essential to New Orleans’ revival, they’re a symbol of it." Seattle should "go for" another NBA team, but "just leave the Hornets alone" (Tacoma NEWS TRIBUNE, 12/12).
KING BEE: In New Orleans, Jimmy Smith profiled Jac Sperling, the NBA-appointed Chair of the Hornets who also serves as Vice Chair of the NHL's Wild. Recently, Sperling has "represented several clients -- whom he would not reveal -- who'd been interested in obtaining NBA franchises," and those relationships "acquainted him" with Stern. Stern said, "I have met with him, as he has over the years represented potential owners of NBA franchises. I was very impressed with his work, in particular on behalf of the Minnesota Wild and the success of that franchise and its launch, but also for his knowledge generally about sports franchises and sports management and sports financing." Smith noted Sperling during his years with the Wild has been described as a person with "zero ego," as "friendly, energetic, dynamic," someone who "gets the job done but doesn't humiliate the other side," and the "ultimate team player who is smart enough to know how to put a team together" (New Orleans TIMES-PICAYUNE, 12/12).
Jobing.com Arena Lease Deal Would Provide
Hulsizer $197M Over The Next Five Years
The city of Glendale has struck a deal that would pay Coyotes prospective owner Matthew Hulsizer $197M “over the next five years, more than the city spent to build" Jobing.com Arena for the team seven years ago, according to Rebekah Sanders of the ARIZONA REPUBLIC. Hulsizer would get $100M, which Glendale “will raise from a bond issue, as soon as the deal is signed.” The city “would then pay the Coyotes organization $97 million over five years to operate the arena during concerts and other non-hockey events, a cost that had previously been borne by the team.” The Glendale City Council “will vote Tuesday on whether to approve the deal.” Glendale Council member Phil Lieberman on Friday called the deal "ridiculous" and said that the city “cannot afford the terms of the agreement.” Hulsizer “plans to pay $170 million to buy the team from the NHL” as soon as this week, and he “is expected to use the city's $100 million to offset the cost.” In exchange for the up-front payment, Glendale “will take over rights to 5,500 parking spaces in lots surrounding the arena.” Glendale officials said that the city “will charge parking fees at arena lots to help cover the cost of the $100 million in bonds.” The lease deal “aims to ensure Glendale has an anchor tenant for the taxpayer-funded arena until at least 2033.” The city “has done preliminary work to find investors to purchase $125 million in bonds to cover the up-front payment to Hulsizer.” The deal allows the city after 5 1/2 years to “sell the arena to Hulsizer for no more than $130 million.” Hulsizer at the end of the lease “could purchase the arena, as well as the rights to charge for arena parking, for $40 million.” In return, Hulsizer would agree to “keep the team in Glendale for the next 23 years, the remaining time the city has on its lease with the team.” He would “pay the same amount of arena rent and fees to Glendale as previous owners, as much as $6 million a year.” He also will “work to rename the team the Arizona Coyotes” (ARIZONA REPUBLIC, 12/11).
Nordiques Fans Held Signs, Waved Flags At Isles
Game To Show Support For Team In Quebec
About 1,100 fans "traveled over 550 miles from Quebec City to watch the Islanders fall 5-4 to the Thrashers" at Nassau Coliseum on Saturday, according to Anthony Affrunti of the N.Y. POST. The Quebec "faithful, who lost their beloved Nordiques in 1995, were out in force wearing their old blue sweaters." Some held signs and banners and "chanted in French and English." They were "just a small part of the 70,000-person fans group up north known as Nordiques Nation that has been in existence for almost a year." CHOI-FM sports radio host Vincent Cauchon was the "brains behind" the trip. He "wants to make it known that the Nordiques supporters aren't planning to take the Islanders ... away from Long Island, but that there are other teams better suited to move to stronger hockey markets." Cauchon: "We're not here to pick up a team. We're here to express our love of hockey and the NHL. It's important to me that NHL players play in front of big crowds." Affrunti noted plans are "in the works to build a new arena in Quebec," and "without it chances are slim to none for an NHL franchise to return" to the city (N.Y. POST, 12/12).
SHOWING THEIR SUPPORT: FANHOUSE.com's Kevin Schultz noted the fans from Quebec "were jubilant and cheered for the hometown Islanders, as they had said they would." The group "counted down from ten to zero in French before cheering for at least 30-seconds each time" (FANHOUSE.com, 12/11). In N.Y., Jeff Klein noted the Islanders in the second period "showed a photo of Quebec City as the public address announcer said the team offered a 'welcome Quebec fans.'" With five minutes to play in the game, all the Quebec fans "walked down to the lower bowl behind the Atlanta net and stood and cheered and waved provincial flags through the rest of regulation in an impressive display of passion" (NYTIMES.com, 12/11). NHL Commissioner Gary Bettman in an e-mail said, "No one has ever doubted the passion of hockey fans in Quebec City." ESPN.com's Pierre LeBrun wrote, "Call me a sucker, but this again shows me there should again be NHL hockey in Quebec City" (ESPN.com, 12/11).
TIME TO MOVE ON? On Long Island, Katie Strang noted the demonstration "comes at a time when the Islanders seem to be hitting rock bottom -- ranking 29th in attendance and facing the death of the team owner Charles Wang's massive plan for a new arena, the Lighthouse Project." Islanders GM Garth Snow before Saturday's game said there was "nothing new to report" on the team's pursuit of a new arena. Snow: "We're here through 2015 and we're going to honor the lease" (NEWSDAY, 12/12). Meanwhile, in Boston, Kevin Paul Dupont noted the Thrashers "remain in the hunt for a playoff spot," but by a "look at the anemic gate at Philips Arena, on-ice success might not be enough to win over the long-disappointed locals." Dupont: "Look for rumors to persist that both Quebec City and Winnipeg will try to woo them north" (BOSTON GLOBE, 12/12).
Elway Likely To Have Broad Personnel
Powers In Broncos' Front Office
ESPN.com's Adam Schefter cited NFL sources as saying that Pro Football HOFer John Elway is "expected to become a lead executive in the Denver Broncos' front office by the end of this season." Elway is "likely to join the front office in a position with broad personnel powers, working closely with COO Joe Ellis as team owner Pat Bowlen's two most trusted men." The Broncos and Elway "now are trying to determine Elway's exact job title, his job responsibilities and a fair salary" (ESPN.com, 12/12).
STILL ON THE BLOCK: Chargers Special Counsel Mark Fabiani Friday said that "efforts by Goldman Sachs to sell" Alex Spanos' 36% stake in the team "won't end with a tax deal in Congress that eases any burden on the wealthy Spanos family." But Fabiani in an e-mail said, "We aren't close to anything with anyone at this point." He also addressed the Chargers' ongoing search for a new stadium and said, "It's pretty clear that we owe the city something (the amount of money that the NFL can loan or otherwise contribute) and the city owes us something (how much if any of the redevelopment dollars downtown are in play here)" (SAN DIEGO UNION-TRIBUNE, 12/11).
REACHING A BREAKING POINT: The Bengals are 2-11 and have lost 10 straight games, and in Cincinnati, Paul Daugherty wrote under the header, "Now Bengals Really Infuriating. Fans' Disappointment Has Turned To Anger." The Bengals "might not sell out again this year," and in their home city have "inspired a loathing that has crested this fall." Daugherty noted "letter after letter to the editor offers the same message: Go away, Bengals. You're not worth our money and, more importantly, our time." Team ownership needs to "stop being tone deaf" and should, "once in a while, show a little gratitude" (CINCINNATI ENQUIRER, 12/12).
EXCEPTION TO THE NORM: In North Carolina, Steve Reed writes the Panthers' "reluctance to spend money this offseason -- and their decision to cut big-salary players -- is" a reflection of the lack of a CBA and team Owner Jerry Richardson's "direct involvement in the negotiating process for a new one." Richardson has "never gone the cheap route before this year," and this season is "more an anomaly than anything else, a reflection of the economic battle between owners and players." Reed: "So, if the Panthers do have the No. 1 pick in the 2011 NFL draft I fully expect Richardson to pony up and pay Stanford quarterback Andrew Luck -- let’s face it, that’s who it will be -- big money" (GASTON GAZETTE, 12/11).
ESPN.com's Pierre LeBrun cited a source as indicating that East Resources President & CEO Terry Pegula "continues to show serious interest in buying" the Sabres. There is "nothing imminent," but the source said that something "could possibly be in place by the end of this season" (ESPN.com, 12/11).
JUST NEED AN OWNER: In Boston, Kevin Paul Dupont cited a source as saying that the sale of the Stars "would have concluded a month ago to Vancouver businessman Tom Gaglardi, but for Commissioner Gary Bettman insisting the selling price ($175 million?) was too low." Gaglardi "subsequently bowed out of the process" (BOSTON GLOBE, 12/12). In Dallas, Mike Heika writes after the Stars' recent road games against the Blue Jackets, Hurricanes, Lightning and Panthers drew 10,932, 15,382, 13,277 and 11,580 fans, respectively, it is "difficult to imagine how this league is making money and will actually try to push the salary cap up next season." The Canadian cities and "ports like Boston, Chicago and Washington are carrying the struggling markets," and what is "positive for the Stars is that Chicago was in this same dilemma five years ago." The Capitals, Kings and Blues "also were struggling to draw crowds and now regularly get sellouts" (DALLAS MORNING NEWS, 12/12).
LINING UP A HEAVY HITTER: In N.Y., Brian Costello noted the contingent the MLB Rangers sent last Thursday to visit free agent P Cliff Lee in Arkansas "included billionaire co-owner Ray Davis," the retired co-CEO of Energy Transfer Partners. Davis was "one of the two big spenders behind the purchase of the Rangers this summer." Rangers Owner Chuck Greenberg: "We thought any room Ray is in is a stronger room" (N.Y. POST, 12/11).
TIME FOR PATIENCE: In N.Y., Mitch Lawrence writes the 6-18 Nets have "actually been worse than the 30-win team we expected." However, NBA officials who know Nets Owner Mikhail Prokhorov "from his old Moscow basketball team, CSKA, say he'll display patience as long as he sees signs of a turnaround." Lawrence wrote "if anything, Prokhorov has misspent his rubles," and the Nets "have been getting next to nothing on their return" from the four free agents they signed this offseason (N.Y. DAILY NEWS, 12/12). Meanwhile, Prokhorov Friday "issued a response" to Mavericks Owner Mark Cuban calling him "a p---y." Prokhorov: "I think Mark has it wrong. I don't like cats" (N.Y. DAILY NEWS, 12/11).