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Shinn Lending NBA $70M To Help Facilitate Purchase Of Hornets
Published December 13, 2010
|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).