SBJ/Jan. 31-Feb. 6, 2011/Franchises

Hornets reach attendance benchmark, press sponsors to increase spending

After meeting a key attendance benchmark that keeps the New Orleans Hornets’ arena lease intact, the team is now leveraging its sponsors for increased investment to help shore up the franchise.

On Jan. 18, Hornets President Hugh Weber and other front office executives held a state-of-the-franchise meeting for the team’s top 40 sponsors and pressed for multiyear extensions on current deals along with increased spending. The effort is part of the latest phase to improve the team’s financial stability after the NBA in December bought the Hornets from owner George Shinn for more than $300 million after he failed to find a buyer for the money-losing franchise.

The Hornets have more than 100 sponsors but the majority are small, annual deals, though team officials would not disclose specific sponsorship revenue.

press conference
Louisiana Gov. Bobby Jindal (center) addresses the media about the Hornets meeting their attendance goals.
“We asked them to extend their agreements, we asked them to buy more tickets and suites and we asked them to buy more inventory,” said Tom Ward, senior vice president of corporate partnerships for the Hornets. “We have seen our sponsorship revenue increase but it was at a low level. We are in the NBA’s smallest market so we need to take a more-is-more approach.”

“The Hornets are asking us to step up a little further than what they are getting,” said Ewell Smith, executive director of the Louisiana Seafood Marketing and Promotion Board, which is in the first year of a three-year sponsorship deal with the team. “It’s smart on their part. We have learned that they are a business driver for the community.”

But Smith has not decided whether to increase spending with the team. “Right now we are seeing how it will go and we will consider it for next year,” he said. “We want to keep them here.”

The team announced on Jan. 24 that it had met an average attendance benchmark of 14,735 fans per game, which prevents the team from opting out of its lease at the New Orleans Arena for another year. But the Hornets face the same attendance benchmark next Jan. 31, a clause that raises questions about the team’s long-term future in New Orleans.

The Hornets have a season-ticket base of about 6,300. Along with the push for more corporate investment, the franchise is unveiling a season-ticket renewal campaign to build its season-ticket base to at least 10,000 as a hedge against next year’s attendance requirement.

The team also wants to change its lease with the state that allows for the opt-out clause should the franchise fail to meet its annual average attendance benchmark.

“We needed to get past the attendance threshold and part of phase two will be discussions to change the [lease] terms,” Weber said. “The annual deal isn’t good for anybody. Our feeling is to make [the attendance benchmark] more part of our business practice and not part of the lease.”

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