SBD/April 16, 2012/FranchisesPrint All
NBA Commissioner David Stern on Friday “secured the signature” of Saints Owner Tom Benson on a contract to buy the Hornets from the NBA for $338M, “fulfilling a promise Stern made to New Orleans when the league acquired the team from founding owner George Shinn in December 2010 that the Hornets will remain in the Crescent City,” according to a front-page piece by Jimmy Smith of the New Orleans TIMES-PICAYUNE. It was Stern’s “unwavering dedication” to New Orleans that keeps the NBA in the city. Stern: “I always believed we had that obligation to New Orleans. In fact, I thought that and I felt there were issues or constraints that made it difficult for George to continue as an owner, and he really wanted very much to have the team stay in New Orleans.” SportsCorp President Marc Ganis, who helped facilitate the deal, said that it was the vision of both Benson and Stern “that cemented the Hornets’ future in New Orleans.” Ganis: “(Stern) could have gotten more than half-a-billion dollars for this team, but that wasn’t his interest. That was important. Both principals had the same motivation. And you had one that controlled the asset and could sell it, and one who had the resources and could buy it at the price that was a break-even for the league” (New Orleans TIMES-PICAYUNE, 4/15). In New Orleans, Jeff Duncan noted Benson was seen as a "long shot to gain control of the team.” California-based businessman Raj Bhathal “emerged as the front-runner a few months ago,” and former Hornets investor Gary Chouest was “long considered the leading local investor.” With a “nudge from Gov. Bobby Jindal and NBA Commissioner David Stern, Benson re-entered the race a couple of weeks ago and blew everyone out of the water” with his bid. The sale was “conditional on ownership keeping the team in New Orleans through the life of the new lease agreement, which extends through 2024” (New Orleans TIMES-PICAYUNE, 4/14).
HOW THE DEAL WAS DONE: Benson cited as one of the main reasons he bought the team an “innate fear” that an absentee owner “might try to move the team in desperate times.” The TIMES-PICAYUNE’s Smith noted Benson’s “expedient rise to the top of a trio of potential owners or ownership groups accelerated in recent weeks when he revisited the bidding process after initially walking away because he thought the league’s asking price for the franchise was too steep.” Benson said that one of his first tasks is “a nickname change that would more closely identify his NBA team with the city wherein it resides.” He said that he “would own 100 percent of the club without partners, other than his wife, Gayle.” The NBA BOG “still must formally authorize the sale once Benson is completely vetted by the league.” But Stern said that there “should be no impediments toward ultimate approval.” Benson noted that he “assumes $125 million in debt the team has on its books.” Stern last week said that the league “was aggressively negotiating with three parties for the potential purchase but pointed to Benson’s track record as an owner of a major sports franchise as critical in the league’s desire to add him into its brotherhood.” Benson said that he “plans to run the Saints and Hornets separately” with Saints Exec VP & CFO Dennis Lauscha “overseeing the business aspects of both clubs” and Saints GM Mickey Loomis "in charge of the sports operations" (New Orleans TIMES-PICAYUNE, 4/14). Benson said, “I got involved a month ago, and let me tell you, it has been some frantic ride. I talked to my wife, I talked to the archbishop, I talked to the governor. Everyone was going crazy. When I was on the phone with Governor Jindal, telling him what I was going to do, I thought he was coming through the phone to kiss me" (New Orleans TIMES-PICAYUNE, 4/15).
THE PRICE TAG: In N.Y., Richard Sandomir reported by selling the Hornets to Benson, the league “made back the $318 million it paid ... when it acquired the money-losing franchise from George Shinn, and about $20 million more to cover its losses.” NBA Deputy Commissioner & COO Adam Silver said that the league was “not looking to make a profit on the deal or engage in a bidding war.” Silver: “For one of the smallest markets, it’s a very full price” (N.Y. TIMES, 4/14). In Boston, Gary Washburn noted Benson mentioned “several times” during his press conference that the NBA “did not offer a hometown discount, though Stern is relieved that the league is no longer in the ownership business and has passed the franchise along to capable hands.” Stern: “There were many prospective people who were interested. I think Tom recognized what he could do for the team, what the team could do for the city. And for other, I would say, joint business opportunities for entertainment and further development he was the natural purchaser, and we gave him the opportunity to do that” (BOSTON GLOBE, 4/15).
DOWN IN THE BAYOU: In New Orleans, John Reid noted Benson’s purchase of the Hornets “brought stability to the team’s future in New Orleans.” A league source said that Benson “plans to keep Monty Williams as coach and Dell Demps as general manager, both of whom were hired in 2010.” Williams said that the settlement of the ownership issue “brings ease to a franchise that seemed to be teetering.” Williams: “I think it can only be good for me as a coach, our players and especially our city, and that fans can totally commit to our city.’’ Hornets Chair Jac Sperling and President Hugh Weber in a statement said that Benson’s ownership “reinforces the positive momentum they are building.” Benson in a letter to Hornets fans “vowed to continue to do with the NBA franchise what he has done with the Saints, who won Super Bowl XLIV” (New Orleans TIMES-PICAYUNE, 4/14).
NO MORE CONSPIRACY THEORIES, FOR NOW: L. A. Times columnist Bill Plaschke said a “dark day in the NBA has ended” with Saints Owner Tom Benson acquiring the Hornets. Plaschke: “It’s great Benson bought them, keep them in New Orleans. ... But the better thing here is the NBA no longer owns a team. The NBA should never own a team again. ... It's bad business” (“Around The Horn,” ESPN, 4/13). In N.Y., Mitch Lawrence cited an Eastern Conference president as saying, “At least now if the Hornets win the lottery, the league won’t have that problem on its hands. Can you imagine the P.R. nightmare Stern would have had if (the NBA) still owned the team and he got up at the lottery and announced that the Hornets had won it? You’d have people laughing all over the place at us” (N.Y. DAILY NEWS, 4/15).
BUZZ OFF: The TIMES-PICAYUNE’s Duncan writes Benson’s proclamation to change the team name has created “a buzz among the fans, who have universally endorsed the idea.” Under Weber’s “shrewd direction, the organization has done a remarkable job of rebranding itself into a New Orleans business since moving back home in 2007” from Oklahoma City, where the team was temporarily relocated due to Hurricane Katrina. The color schemes and logos “have changed to better reflect local customs, and this strategy inspired” the popular “NOLA” Mardi Gras uniforms. The league “usually requires a two-year window” to complete the task changing the nickname, primarily “because of merchandising and marketing purposes.” Duncan writes the Hornets’ nickname “isn’t particularly bad, but it’s far from appropriate” (New Orleans TIMES-PICAYUNE, 4/16). The Hornets relocated from Charlotte in '02 and the city was awarded the expansion Bobcats in '04. In Charlotte, Tom Sorensen wrote, “If I were the Bobcats, and I wanted to show fans I cared, I'd change my name to Hornets” (CHARLOTTE.com, 4/13).
The record $2.15B sale of the Dodgers to Guggenheim Baseball Management remains on track to close by the end of the month as a Delaware bankruptcy judge Friday night confirmed the deal following a highly contentious day-long hearing in Wilmington. Judge Kevin Gross for the U.S. Bankruptcy Court for the District of Delaware, as expected, gave his formal blessing to the deal that will exit the team from its 10-month stay in bankruptcy. But what preceded Gross' move was anything but anticipated. MLB, wanting an additional opportunity to review the sale, launched a long, vitriolic and ultimately unsuccessful effort to delay the deal confirmation. In particular, the league said the Dodgers were "jamming" documents simply in order to get the sale done by the end of the month. Former Dodgers Owner Frank McCourt has until then to pay ex-wife Jamie $131M as part of a separate divorce settlement. To that end, league outside counsel Thomas Lauria also accused the Dodgers of breaking league rules by announcing the Guggenheim deal last month without league approval, even though McCourt's November settlement with the league gave him rights not normally available to an owner in a team sale. "We were unable to do what the other owners would have expected," Lauria said. Guggenheim's joint venture deal with McCourt over the Dodger Stadium parking lot land also remains a key concern for MLB, as there has not been any specific documentation on how revenue from the lots will be split between the new team owners and McCourt. But Gross ultimately ruled the sale was in accordance with the U.S. bankruptcy code (Eric Fisher, SportsBusiness Journal).
PAY TO PARK: In L.A., Bill Shaikin noted the money fans pay to park at Dodger Stadium "will be collected by the new owners, but neither McCourt nor Guggenheim has explained how the parties will divide the revenue the team generates from the parking lots." Although sources said that no development "can take place on the parking lots unless McCourt and Guggenheim agree, neither party has shared a vision for the future of the property." Dodgers attorney Bruce Bennett said that the settlement also "includes confidential provisions about how the league could treat revenue from a Dodgers-owned regional sports network." Bennett "declined to elaborate, but the provisions are believed to limit how much of the Dodgers' television proceeds must be shared with other teams via revenue sharing." As Gross conducted a morning session Friday, attorneys from the parties "met with the court-appointed mediator." Those meetings "continued for eight hours, with Lauria deciding to appeal directly to Gross, who said he did not expect the hearing to take such a hostile turn." Gross said, "I had no idea. I thought this was going to be a celebration-type occasion" (L.A. TIMES, 4/14).
ROBINSONS TO BE INVOLVED: Sharon Robinson, the daughter of the late Baseball HOFer Jackie Robinson, confirmed yesterday that Guggenheim Baseball Management has "invited the Robinson family and its foundation to play a significant role with the team." Robinson said, "We hope that we will be involved. It's a very important franchise. It's a team we still feel very connected to." She added that no formal agreement "has been reached and declined to discuss what role her family might wish to play with the Dodgers." She said that Guggenheim Baseball Management "initiated the discussions" through Jackie Robinson Foundation Chair and former NL President Leonard Coleman (L.A. TIMES, 4/16).
FRONT OFFICE INTRIGUE: ESPN.com's Jayson Stark wrote, "Don't be so quick to assume the new, improved Dodgers of Stan Kasten and Magic Johnson can't wait to start handing out the largest contracts in the history of the solar system." That might be "a dangerous assumption." While serving as president of the Braves ('86-03) and Nationals ('06-10), Kasten's teams "never handed out a contract longer than five years to any free agent from outside their organization." One agent said, "That's not Stan Kasten's M.O. I'm sure they'll be a franchise that makes moves. But I'm also sure that when Stan makes decisions, it won't be like the kind of decisions [Tigers Owner] Mike [Ilitch] makes." Kasten has "told his friends in the business he knows that he and Johnson have to operate the Dodgers as a big-market club." It is "what their public demands," and it is "what the entire sport needs." But Stark asked, "After spending $2 billion dollars for the franchise, how much further in the hole can the new owners go?" An official of one club said, "The problem is, they'll be losing money at this price for a long time. But they also know they've got to get their fans back" (ESPN.com, 4/13). The L.A. TIMES' Shaikin wrote the "creative tension" between Johnson and Kasten "should be fascinating to watch." Johnson said that he "would have courted Albert Pujols if his group could have bought the Dodgers sooner; Kasten is a player development guy who has reminded friends he was no longer president of the Washington Nationals when the team handed $126 million to Jayson Werth" (L.A. TIMES, 4/15).
There were “no angry signs and no organized show of protest” when the Marlins hosted the Astros Friday night, their first game at Marlins Park since manager Ozzie Guillen’s comments on Fidel Castro led to a five-game suspension, according to Dave George of the PALM BEACH POST. When an image of Guillen was “flashed briefly on the jumbo video screen during a pre-game presentation of Miami's starting lineup, there was no reaction whatsoever from a gathering crowd of 30,169.” Guillen returns from his suspension tomorrow night and “only then will the impact of his apology … be fully measured” (PALM BEACH POST, 4/14). In Miami, Armando Salguero noted the “feared protesters never showed” Friday, but there were “wide swaths of empty seats at Marlins Park.” At least 11 sections in the ballpark "were more than 75 percent unoccupied.” The Marlins “would argue there’s no issue because they announced a paid attendance of 30,169 in the park that holds 36,442 seated customers.” But Salguero wrote the empty seats “raise questions, especially in light of suggestions a protest is still possible Tuesday when Guillen returns from his five-game suspension and other whispers that a boycott is already under way.” Perhaps the crowd was “reined in by the other events in town,” as the NHL Panthers hosted the Devils in a playoff game and the Bobcats-Heat game was on the same night. Salguero: “Nobody knows why the crowd was good by Marlins standards, but nowhere close to Opening Night good” (MIAMI HERALD, 4/14).
MARLINS MAKE NECESSARY MOVE: Boston Globe columnist Bob Ryan said of Guillen's comments, “We’re talking about a speech infraction here that the Constitution supposedly covers, but we do understand why the team had to react.” Ryan noted the Marlins have "never tapped into that fan base in terms of being paying customers." Ryan: "They were hoping by building a new ballpark in Little Havana, bringing in a Latino face such as Ozzie and importing some other players they would succeed. The fact is now finally he’s got their attention, and it’s negative.” ESPN’s Howard Bryant said the “real conversation here is whether or not the Miami Marlins have the stamina to stand by their manager and whether or not they’re going to ride this out along business lines.” Bryant: “What Ozzie Guillen’s got to do is win.” N.Y. Times’ Judy Battista said, “I can’t imagine a worse thing he could have said to that customer base than what he said about Fidel Castro.” If there are "significant protests and people really boycott the stadium, don’t show up, then this continues.” Battista: “In the week since he apologized, things seemed to have calmed down” (“The Sports Reporters,” ESPN, 4/15).
MERCHANDISE MANIA: Marlins Senior VP/Marketing & Event Booking Sean Flynn said that sales of Marlins shirts, jerseys and hats at the first three games in the new ballpark “eclipsed total sales last season.” MLB Senior VP/Licensing Howard Smith said that Sports Authority reported that sales of Marlins gear nationwide has “outsold all other team merchandise this quarter, including that of teams from other sports.” Smith said that Marlins merchandise historically has “fallen into the lower half of sales when ranked against that of other major-league teams.” He added that since December, Marlins merchandise sales “have skyrocketed, and the team is now one of MLB's top sellers.” Smith: "This is one of the hottest re-image projects I've ever worked on" (SUN-SENTINEL.com, 4/14).
The MLB Cardinals presented the '11 World Series Championship rings to players during a ceremony before Saturday's home game against the Cubs. The ring features the Cardinals' bird-on-bat logo made of faceted red rubies and surrounded by a 14 karat white gold frame. The bird is surrounded by 103 round diamonds, and the rest of the ring is made of 14 karat yellow gold. The phrase "WORLD CHAMPIONS" appears around the logo, with diamonds set behind the words. One side of the ring features the player's name, number and a ruby-filled "StL" emblem surrounded by the World Series leaf design that was used in the '11 version of the MLB Fall Classic logo. That side also features the Cardinals' "Rally Squirrel" jumping over home plate. The opposite side of the ring features Busch Stadium's Gate 3 bridge, including the Stan Musial Statue underneath, with a ruby-embellished "11" above the phrase "World Series Titles" (Cardinals). In St. Louis, Derrick Goold noted the Cardinals' ring may be the "first championship ring to feature a squirrel." Any player who "appeared in a single game last year for the team will receive" a ring. The ring's design also features the "results of all three 2011 playoff rounds" engraved on the inside of the ring, including the logos of the opponents. Beneath the results is the phrase "HAPPY FLIGHT." Goold noted the "facet of the ring that could start a trend is the shadowbox-like effect behind 'WORLD CHAMPIONS.'" Team President Bill DeWitt III called this the ring's "bling factor" (ST. LOUIS POST-DISPATCH, 4/15).
LEAVING A LEGACY: In St. Louis, Joe Strauss wrote if Cardinals Chair Bill DeWitt Jr. "consistently conveys a long-term vision, it is not by accident." DeWitt insists that he and his group's "control of the franchise is open-ended." Rather than "seek to cash out on a franchise that has more than quadrupled in value since it was purchased, DeWitt frames the club as a long-term hold by him, his partners and their families." He said, "Obviously from my family's perspective we've talked about it. From our perspective, the next generation is very interested in continuing on past me. We have no interest in divesting." DeWitt intends for his children, Bill III and Donna DeWitt Lambert, to "remain among the investment group long after his stewardship ends." A number of other investors also "have long-standing ties to the franchise." DeWitt said, "It's not something I think about on a daily bases but you get to a certain age and there is estate planning to do. In our case, it will not involve selling our interest" in the club. He added, "If we were going to sell, we wouldn't have put all that money into a new facility. That was more for the future than for the present. It was a big commitment" (ST. LOUIS POST-DISPATCH, 4/15).
The Glazer family, the owners of EPL club Manchester United, has "revived plans to float the football club in Singapore," according to Ben Marlow of the LONDON TIMES. The plan to take the club "public has been reactivated by improving market conditions." Between 25-30% of the shares "would be listed, valuing the club" at more than $3.17B (all figures U.S.) Up to $949.83M "could be raised if the family decides to go ahead." The club initially planned to go public last June, but by December the idea had been "shelved amid concerns that choppy market conditions caused by the eurozone financial crisis had made big share offerings too risky." The Glazers’ team of investment banking advisers "believes a return of investor confidence has created a window of opportunity to list in Singapore before August." The supporters’ trust has said that it will "back the Glazers’ Singapore plan only if they open up the share offering to fans" (LONDON TIMES, 4/15). In London, James Ducker notes on the face of it, the IPO could "prove a watershed moment in United’s history." Sources have "insisted privately that the family’s motives stem from a strong desire to reduce dramatically United’s gross debt, which stood" at $695.04M for the year ended December 31, 2011. If that "rings true and the proceeds are used to clear most of the debt, drastically cutting their annual interest payments in the process, United, in theory, could be" about $79.16M a year "better off, the equivalent of two world-class signings or a third of the annual wage bill" (LONDON TIMES, 4/16).
Red Sox and EPL club Liverpool Owner John Henry's teams are "united not in towering success but in stunning collapse," according to Jere Longman of the N.Y. TIMES. The Red Sox finished 7-20 last September and "missed the playoffs," while the '12 season has brought a "nervous start" with the team off to a 4-5 record. Meanwhile, Liverpool has won only 3 of its 14 EPL matches in '12. In eighth place in the EPL, Liverpool will "miss out on next season’s European Champions League, considered the world’s best club competition," for the third consecutive season. The absence "could lead to the loss" of $45M or more in revenue and to a "decreased willingness of top players to join the club." The Red Sox and Liverpool have "struggled recently from the extravagant acquisitions of players who have underperformed." Henry "remains a respected owner in both" Boston and Liverpool, but in Boston, there is some "itchy concern in the news media that Henry may be paying too much attention to soccer and not enough to baseball." Boston Globe columnist Dan Shaughnessy said, "He’s had the appearance of being distracted, absent, focused elsewhere." Longman noted the portrayal of Henry in England is as an "attentive, even ruthless, owner who has a clear strategy for success and is impatient with failure." But Henry and Fenway Sports Group Chair Tom Werner "received mixed reviews for Liverpool’s handling of an episode last October," when F Luis Suarez "directed racial taunts at Manchester United’s Patrice Evra." Suarez was suspended for eight games, and in a later game "refused to shake Evra's hand in a pregame ritual." Liverpool manager Kenny Dalglish and some of the club's players "wore T-shirts in support of Suarez, a gesture that drew widespread criticism." Suarez "apologized for the handshake snub in February, an act of contrition that Henry and Werner were credited with orchestrating." Still, they were "criticized for not acting sooner and more forcefully" (N.Y. TIMES, 4/15).
In Ft. Lauderdale, Craig Davis noted the NHL Panthers “drew an announced attendance of 19,119” at BankAtlantic Center Friday for Game One of the team's Eastern Conference Quarterfinals series against the Devils. The game was the Panthers' first playoff game in 12 years, but team President & COO Michael Yormark said the attendance number fell short of a sellout by “a couple hundred tickets.” There were “scattered empty seats in all three levels,” as the South Florida sports dollar “was spread thin Friday with the Marlins opening their first homestand at Marlins Park, and the Heat also playing at home” (SUN-SENTINEL.com, 4/13). Last night's Devils-Panthers Game Two drew a crowd of 19,248 (South Florida Sun-SENTINEL, 4/16).
A ROCK AND A HARD PLACE: A Newark STAR-LEDGER editorial stated Newark Mayor Cory Booker’s recent attacks on Devils Chair & Managing Partner Jeff Vanderbeek “have gotten way out of hand.” What seemed at first “like a temper tantrum has morphed into a sustained campaign of demonization,” and the “criticism is not only unjustified, it could discourage others from investing in the city.” The editorial: “What is the endgame? Is Booker playing to the home audience, beating up on a rich out-of-towner to burnish his own street cred? Our hope is that these two can sit down and make a deal” (Newark STAR-LEDGER, 4/15). Vanderbeek said last week that he “regrets coming to Newark, that he should have listened to the cynics who told him to stay away.” In Newark, Steve Politi wrote some of Vanderbeek’s comments are “posturing,” but the city “certainly shouldn’t have the same regrets.” Vanderbeek, in “spearheading the effort to build a world-class arena in downtown, has done more to help the infrastructure and image of Newark than nearly anybody in the past three decades” (Newark STAR-LEDGER, 4/15).
THE PLACE TO BE: In Montreal, Stu Cowan wrote Bridgestone Arena “sure looks like a fun place to be.” A sellout crowd of 17,113 was “in a party mood Wednesday night as the Predators beat the Detroit Red Wings 3-2 in Game 1 of their playoff series, marking the 26th sellout of the season in Nashville.” Nashville Tennessean Predators beat writer Josh Cooper said the team is “pretty big on the whole entertainment aspect of the game.” Cooper: "The atmosphere you get in traditional markets is much more about the actual product on the ice, whereas in a place like Nashville they try to make it a whole family-type experience with cheerleaders and a band and all sorts of other stuff.” The Predators filled 97.5% of their seats this season, and Cooper said that Predators games “have become the place to be seen in Nashville” (Montreal GAZETTE, 4/14).
WILD DOGS: NHL Commissioner Gary Bettman discussed the league's ownership of the Coyotes on NBC Sports Network's "CNBC Sports Biz: Game On," and said the league “really recognized with all the uncertainty that surrounded the franchise it’s been a Hercluean effort in the community and the support by the fans has been great." Bettman: "But we do need to find a new owner. It’s something that we continue to work on and it’s something that we work on very closely with the city of Glendale.” Bettman noted other markets “have enhanced the speculation as to what might happen, because they’d like a franchise and that interest is gratifying." Bettman: "But we do try everything possible to keep a franchise where it’s located" ("CNBC Sports Biz: Game On," NBC Sports Network, 4/13).