Hornets Sign Lease With City Of New Orleans; Field Of Buyers Down To Two Groups
All doubt about the long-term future of the Hornets over the next few weeks “will dissipate when a likely ownership consortium agrees to purchase the Hornets from the league for a sum believed to be in the neighborhood of $350 million, and thus assuming the terms of a binding lease that ensures the Hornets" remain in New Orleans at least through '24, according to Jimmy Smith of the New Orleans TIMES-PICAYUNE. Friday's announcement of a lease agreement in principle with the state is the “penultimate step in a grueling process that will end the way” NBA Commissioner David Stern and Hornets Chair Jac Sperling had planned. The NBA BOG has a regularly-scheduled spring meeting on its calendar in mid-April, and that “would be the ideal time for a sale to be approved.” Sources said that the process, “which on the surface has seemed to move along at a plodding pace, could accelerate in the coming days because of that window.” Optimally, Sperling had "hoped to simultaneously announce a new owner and a new lease agreement, but that plan was altered because the appropriation for Arena improvements had to be part of Gov. Bobby Jindal's capital outlay bill, which will be introduced in the legislature this week.” The proposal “had to be included when the bill was filed, not later amended.” Sources said that the NBA has “narrowed its potential ownership choices to two.” One group includes L.A. businessman Raj Bhathal, “partnered with San Antonio car dealer Larry Benson, brother of Saints owner Tom Benson, and former NBA coach and executive Mike Dunleavy.” Former Hornets investor Gary Chouest “is the other party the league is courting.” Sources said that they “would not be surprised if Chouest, in the end, is part of the ownership group in some capacity.” The Bhathal consortium “has courted local investors and Chouest could end up among them” (New Orleans TIMES-PICAYUNE, 3/18).
ALL SIGNS POINT TO YES: The TIMES-PICAYUNE's Smith reported the agreement “relieves the state from providing subsidies to the Hornets that could have reached $7.9 million annually if the team failed to reach certain attendance or financial benchmarks.” The Hornets' new lease is "contingent upon legislative approval of a proposed $50 million bond issue in the capital outlay bill, extension of the team's expiring Quality Jobs Tax Credit initiative and the NBA finding a new owner for the franchise.” It also “eliminates any escape clauses and will create, through capital improvements in the Arena, new avenues by which the Hornets can generate revenue on their own, such as modified or improved seating areas or digital advertising media, without leaning on the state for assistance.” Planned improvements to the Arena “will be phased in over two offseasons to be completed by the start of the 2014 season” (New Orleans TIMES-PICAYUNE, 3/17). A TIMES-PICAYUNE editorial stated the lease should “give fans peace of mind, knowing the Hornets would remain in New Orleans regardless of who purchases the team.” That alone “is a major accomplishment.” Jindal and his negotiating team, including SMG Senior VP/Stadiums & Arenas Doug Thornton and Louisiana Stadium & Exposition District Chair Ron Forman, “deserve credit for their work” as do Stern, Sperling and team President Hugh Weber. Stern had “made it clear that his No. 1 goal with the NBA's ownership of the Hornets was to keep the team here, and this proposed lease would accomplish that." Metro New Orleans residents “should be grateful for the NBA's commitment to our region.” This has “been a season of transition for the Hornets,” but the proposed lease “would go a long way toward assuring long-term stability for the team” (NOLA.com, 3/17).
STERN COMMITTED TO THE BAYOU: In New Orleans, John DeShazier wrote if Stern “didn’t want the team here or didn’t care about it remaining in New Orleans, he had an easy out after Hurricane Katrina, when Oklahoma City eagerly welcomed the relocated Hornets.” He simply could have “allowed the team to remain there … and Stern would’ve been supported by the theory that it simply wasn’t economically feasible for the team to survive in decimated New Orleans.” And few outside of New Orleans “would have vehemently objected.” But DeShazier noted Stern “vowed to do everything possible to keep the Hornets in New Orleans” and he “never did anything to exhibit a change of heart” (New Orleans TIMES-PICAYUNE, 3/17). Also in New Orleans, John Reid wrote with the announcement of an escape-proof lease that binds the team to the city through ‘24, Hornets head coach Monty Williams said that “free agents will now look differently at the franchise.” Williams: “It certainly helps us, and now we don’t have to answer that question anymore if the team is going to be in New Orleans.” He added, “When guys start asking if he can put his kids in school and buy a house, we can tell them they can, because the team is going to be there” (New Orleans TIMES-PICAYUNE, 3/18).