Posted by Royce Young
It's official: The NBA now owns the New Orleans Hornets.
NBA Commissioner David Stern announced Monday that the NBA is proceeding with the purchase of the New Orleans Hornets, following Gary Chouest’s decision not to proceed with the acquisition of the interest of majority owner George Shinn. The transaction is subject to a vote by the NBA’s Board of Governors, which will likely occur next week.
Stern, in a press release said, “George Shinn has been an exceptional owner for New Orleans and Gary Chouest has been extraordinarily supportive as a minority owner. However, in light of the uncertain economic situation in New Orleans and Louisiana, Gary has decided not to move forward with the purchase of George’s majority interest although he was prepared to remain an investor in the team. In the absence of any viable purchaser seeking to own the Hornets in New Orleans, I recommended to the NBA Board of Governors that the best way to assure stability and the adequate funding of the franchise would be for the league to step in, and complete the transaction and assume control."
The franchise was valued at around $300 million and that's the ballpark in which the league paid, according to Stern in a teleconference.
The league has been dedicated to the franchise since Hurricane Katrina. Following a two-year stint in Oklahoma City, many thought it would be best for the franchise to remain there because of the issues in New Orleans. Instead, the NBA and Stern committed themselves to keeping the team in New Orleans, despite there being buyers ready to purchase the team from Shinn (current Thunder owner Clay Bennett being one).
Obviously the league doesn't want to control the Hornets for long, so as soon as a suitable purchaser steps up, the team will likely be sold. Whether that's someone from out of town or someone that wants to try and keep the Hornets in New Orleans is to be seen. But no franchise is more of a prime candidate to be moved than the Hornets right now because of a clause in their lease agreement that lets them out if attendance figures aren't met. And right now, those numbers are way off.
According to Shinn, “When we were unable to complete the transaction with Gary, I suggested to the Commissioner that the league consider the purchase of the Hornets. I wanted to ensure that the team remained in New Orleans, if that was possible, and recognized that the league could provide the necessary funding while a new owner was sought in New Orleans and negotiations with the city and the state could continue.”
Chouest said, “New Orleans owes a debt of gratitude to George for bringing NBA basketball back to the city. I have greatly enjoyed the experience with the Hornets and, of course, will continue to support the team.”
The league has recruited Jac Sperling, a sports executive and New Orleans native, to be the team’s chairman and governor, with Hugh Weber serving as president and alternate governor. Sperling – who founded Grit Rock Ventures, LLC, an investment company focused on sports, media and entertainment business, and is Vice Chairman of Minnesota Sports and Entertainment (MSE), the parent company of the National Hockey League’s Minnesota Wild – will bring his more than 20 years of sports-industry experience to the operation of the Hornets.
Despite the spin from the statements, this is a serious situation for professional basketball in New Orleans. The team may be winning, but the franchise is losing, in a big way.