Blog Entry

Report: The Atlanta Hawks are for sale

Posted on: May 20, 2011 12:29 am
 
The Atlanta Hawks are reportedly the next NBA team up for sale. Posted by Ben Golliver.

hawks-fan

After the NBA's takeover of the New Orleans Hornets, the successful sale of the Detroit Pistons and the near relocation of the Sacramento Kings, another franchise has emerged as potentially being on the selling block.

The Atlanta Journal-Constitution reports that the Atlanta Spirit ownership group are considering selling both the NHL's Atlanta Thrashes and the Atlanta Hawks. 
The Spirit, in the process of negotiating a deal that would send the hockey team to Winnipeg, also is in talks about a possible separate sale of the basketball Hawks, who would remain in Atlanta.

Two people familiar with the situation, both of whom asked not to be identified because of the ongoing talks, told The Atlanta Journal-Constitution that the Spirit and outgoing San Diego Padres owner John Moores are in an exclusive negotiating period regarding the Hawks and the Philips Arena operating rights. Both people said a deal is not close and that it’s far from assured one will get done.

The exclusive negotiating period means the owners agreed not to pursue the sale of the Hawks to any other prospective purchaser for a prescribed period of time. It is not known when Moores’ exclusivity expires.
Forbes.com recently ranked the Hawks as the 23rd most valuable NBA team, valuing the Hawks at $295 million. The valuation noted that a recent refinancing of the Philips Arena stadium debt helped the Spirt group deal with "hefty losses."
The Atlanta Spirit, the partnership that owns the Hawks, NHL's Thrashers and operating rights to Philips Arena, refinanced the $123 million of debt remaining (the original principal was $130 million) on the building prior to the start of the 2010-11 season. The net effect of the new bond sale is that the Hawks franchise is no longer collateral for the Atlanta Spirit's debt obligations on the arena. The means the team is more portable then it was prior to refinancing and its owners can tap into the NBA's credit facility. Prior to the refinancing the Hawks were the only NBA team not eligible for the league's credit facility. This helped the owners, who have been funding their hefty losses with cash infusions, borrow $125 million from the credit facility in December. 
A key issue facing the franchise has been indiferent fan support. Despite playing in a major market and making the playoffs for the last four years, the Hawks have just the 22nd best home attendance in the NBA, averaging less than 16,000 fans per game in a stadium equipped to hold nearly 19,000. 

Also worth noting: CBSSports.com's Eye on Hockey Blog reported Thursday night that a completed Thrashers sale is "at best premature."

Category: NBA
Comments

Since: May 25, 2007
Posted on: May 21, 2011 11:16 am
 

Report: The Atlanta Hawks are for sale

Atlanta has always seemed to be a city that never supported their teams. Even when the Braves were in the playoffs every year, you could walk up gameday and buy one. A friend of mine recently moved to the area and an hour before one of the Hawks - Bulls playoff games walked up and got real good seats. Not saying they are bad fans, but if they cannot fill a stadium up for a playoff game what do they do during the regular season?



Since: May 20, 2011
Posted on: May 20, 2011 10:57 am
 

Report: The Atlanta Hawks are for sale

I agree that Seattle does need a team. But keep in mind that the City of Seattle helped finance a remodeled arena in 1997 and it was approved by the NBA. In fact David Stern visited the new arena and praised the building and the cooperation of the City with the franchise. Ten years later the arena was outdated and Stern was castigating the City for its unwillingness to provide more funds for the new NBA financial model. 

The NBA financial model does not work. Stern has a very narrow view of his obligationsa as the commissioner of a major pro sports league. Welcome Oklahoma City. What's next....Billings Montana or perhaps Ames Iowa.  Stern can possibly help his owner groups maximize their franchise values through a few more franchise moves (and playing one city off against another), but eventually the NBA needs to come up with a financial model that makes sense.

Stern also needs to recognize that some franchises are mismanaged (Seattle under Howard Schultz) and perhaps they do not deserve to earn a profit by selling the franchise to the highest bidder. Perhaps the league actually has an obligation to the taxpayers who pay for the arena in which the team performs.

Stern could take a lesson from MLB and the way it is handling the Dodgers mess.  



Since: Aug 8, 2008
Posted on: May 20, 2011 9:22 am
 

Report: The Atlanta Hawks are for sale

Why in the world would a city pay for a team? I would prefer my tax dollars go towards paying teachers. Good for Seattle turning down the Sonics. Perhaps if sports franchises had more skin in the game, they would not loose a ton of taxpayer's money and jump from city to city. Even though I hate the Patriots (I'm a Rams fan), you have to respect Bob Kraft--a businessman that knows that a major sports franchise is a business. Treat the franchise as a business and make good decisions on personnel, marketing, and operating expenses and you can buy your own stadium, operate it, depreciate it, pay off the debt and make even more money in a decade. For the owners like the Hawks, their business formula isn't working. It's too bad that teams can't just fold when they go bankrupt and there isn't a system like EPL soccer that would move a "minor league" franchise up to take its place quickly.

If so many teams (percentage-wise) are failing, why hasn't anyone said that the entire system is broken?  



Since: Jul 12, 2009
Posted on: May 20, 2011 2:42 am
 

Report: The Atlanta Hawks are for sale

Born and still am a Pistons fan, but Seattle needs a team again.  I hope they can get an owner that wants to win and is willing to build a new stadium to make that happen.  The Supersonics might still be here today if the city of Seattle would have accepted to help pay for part of the stadium in taxes.  This might still need to happen if Seatle is to get another team.  The deserve another NBA team.  They could use a NHL team as well.  They have a few good WHL teams in the area and I think and NHL team would do great in Seattle.



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