Tag:Gary Chouest
Posted on: December 10, 2010 9:32 pm
Edited on: August 14, 2011 9:28 pm
 

Gary Chouest supports Hornets, what does it mean?

Former New Orleans Hornets minority owner Gary Chouest expresses his support for basketball in New Orleans. Posted by Ben Gollivergary-chouest The Associated Press is reporting that soon-to-be former minority owner of the New Orleans Hornets, Gary Chouest, remains interested in keeping the franchise in New Orleans. The Hornets, it was announced earlier this week, are set for takeover by the NBA after a deal between owner George Shinn and Chouest collapsed after months of negotiations.
Outgoing Hornets minority owner Gary Chouest says he remains as interested in keeping the NBA in New Orleans as he was when he first invested in the club.
Chouest attended Friday night's home game against Oklahoma City and says the reason he bought into in the Hornets "hasn't changed from Day 1." A Louisiana native whose company supplies vessels to the offshore energy industry, Chouest became a part owner when the Hornets returned to New Orleans from Oklahoma City in 2007. Last spring he neared a deal to take full control, but negotiations with majority owner George Shinn stalled, and Chouest won't comment on why.
In the NBA's move to take over the Hornets, Chouest will relinquish his minority ownership share to the league. This makes sense, because there would be all sorts of red tape if the NBA had tried to purchase only Shinn's share. More importantly, Commissioner David Stern and NBA will eventually be charged with selling the team, and they would rather have full control over that process than split control with a minority owner involved. Chouest, therefore, is free to either become part of a local investment group or get his money and financing together and proceed with a full ownership bid as was originally expected. But the NBA is not obligated in any way to commit to Chouest and they will certainly open up the sale process to all interested parties. Friday's news, then, boils down to a vaguely positive end to Chouest's recent silence, and nothing more. Chouest had been ripped in New Orleans media for not commenting about his failed bid to purchase the team, as it left so many unanswered questions, opening up the possibility of relocation. By saying now that he still supports the Hornets, New Orleans now has at least one wealthy investor in the picture. Unfortunately, it's the same investor they've always had, and he apparently doesn't have the financial wherewithal to manage full-time ownership and sustain the organization's heavy financial losses.  Of course, one interested local investor is better than no interested local investors. But there's a huge difference between supporting the Hornets in theory and committing to financially support the Hornets, and this week's news make it clear which side of that divide Chouest currently falls in.
Posted on: December 9, 2010 10:28 pm
 

Report: Yahoo! co-founder doesn't want Hornets

Posted by Royce Young

Pretty much if you're wealthy and from New Orleans (or at least Louisiana), you're going to at least be asked about buying the Hornets. And that was the case with Yahoo! co-founder David Filo who happens to be wealthy and from the area.

But Yahoo! reported today that Filo isn't a candidate to buy the team. The original rumor came from a New Orleans television reporte r and evidently there's nothing to it. But that's according to a statement from a Yahoo! public relations person, so if we've learned anything from the NBA, a denial doesn't necessarily mean it's not true.

At the same time, unless there's a sentimental reason Gilo would want the team, it doesn't appear to be the best investment, at least from what we saw from the financial documents.

So far, that's the only major name that's surfaced from the New Orleans area. Every other candidate is an out of town buyer, something the NBA supposedly doesn't want to look at, because they want to keep the team in New Orleans. But the league also isn't going to eat $300 million, so basically if you want an NBA franchise and you've got around $300 million in your piggybank, you can have them.

Filo could have been looking at the option and backed off for now. Maybe he'll re-evaluate later. But right now, a prospective owner doesn't appear to be showing up any time soon. If that was the case, George Shinn would've held on to the team and sold it to someone else when Chouest stepped down.

There's a reason nobody wanted to buy. There's a reason the NBA had to step in. With other franchises you see four or five people putting in a bid to try and win over the right to buy the team. But with the Hornets, it's pretty much raise your hand at the auction and you'll hear sold.
Posted on: December 7, 2010 5:25 pm
Edited on: August 14, 2011 9:19 pm
 

New Orleans Hornets were bleeding money

The New Orleans Hornets' audited financial records have leaked online, and they paint a horrific financial picture of the franchise's ownership group. Posted by Ben Golliver Audited financial documents concerning the New Orleans Hornets have been published by Deadspin.com, and the numbers are not pretty. Earlier this week, commissioner David Stern and the NBA stepped in to purchase the Hornets after a long-anticipated sale to Gary Chouest fell through. As Ken Berger of CBSSports.com noted yesterday, the move may wind up being a death blow to basketball in New Orleans, because the Hornets were such a money pit and because deep-pocketed owners would be more likely to find a sustainable business model in a different market, as happened when the Seattle SuperSonics moved to Oklahoma City. The documents published by Deadspin, an audit conducted by KPMG, only reinforce these grim predictions. They show that, despite turning a profit from June 2008 to June 2009, the ownership group led by George Shinn was up to its eyeballs in deficits. This sheet, for example, shows the ownership's total deficit on June 30, 2009, topping out at more than $83 million. Deadspin also notes...
The team's net cash in operating activities, which represents the "measurement of money [owner George Shinn] is being asked to take out of his pocket to keep operations going," according to sports economist Andrew Zimbalist. In 2008, that amount was $7.4 million; in 2009, $1.4 million (slide 12). Zimbalist points out that "things got much more problematic for the franchise" the following year.

The two obvious questions that arise after reading this document are... 

1) Did George Shinn just fleece the NBA by selling this franchise for, reportedly, up to $300 million? 

2) Can any prospective buyers in Louisiana reasonably be expected to do so much better than Shinn that these huge deficits could be avoided?

To the first question, the league has a vested interest in propping up its franchise sale prices, keeping the buy-in price high to ensure maximum milking from the overseas billionaires who represent the league's future owners. The Hornets might not be worth $300 million, especially after reading these documents and after all star point guard Chris Paul inevitably skips down, but the right to own one of only 30 NBA teams surely hovers around that price. Contingent, of course, on being able to relocate.

To the second question, these numbers paint a pretty grim reality, one that was always assumed, and probably known by those who needed to know or who were interested in purchasing the team. For the general public, however, it casts a cold cloud over the city's chances to enjoy NBA basketball indefinitely into the future.

The only hope for basketball in New Orleans now is for an ownership group to arise that is not only happy to keep basketball in New Orleans out of the goodness of its heart, but is willing to do so while sustaining heavy losses while playing in front of hit-or-miss fan support. Good luck with that. 

This team is as good as gone.

Posted on: December 5, 2010 12:47 pm
Edited on: August 14, 2011 9:16 pm
 

NBA takeover could mean Hornets relocate?

A takeover by the NBA could signal a relocation is in the New Orleans Hornets' future and raises old questions about Chris Paul's future with thechris-paulteam. Posted by Ben Golliver We've been tracking the news that the NBA may step in to purchase the New Orleans Hornets pretty closely this weekend. First, here's the breaking news. Second, here's the explanation for why expected new owner Gary Chouest got cold feet. The early word was that the NBA would be looking for local investors to keep the franchise in New Orleans, where it's been since moving from Charlotte in 2002. The latest updates to the story, however, paint a bleaker picture for the future of basketball in New Orleans. The Times-Picayune says the NBA takeover "could be the absolute worst thing to happen in terms of the Hornets remaining in New Orleans beyond the next couple of seasons" because a league-run auction of the franchise would be open to bids from around the world.
Yes, sources indicated that the league would try to find a sole buyer or investment group that would keep the Hornets in New Orleans. There’s no reason to doubt the attempt wouldn’t be made.
But if the highest bidder came from, say, Seattle, the NBA’s desire to keep the team in New Orleans probably would take a back seat to that. In money matters, generally what matters most is money. And if deeper pockets from outside Louisiana emerge, and if that means the franchise is more likely to be economically sound because of it, the NBA hardly would be inclined to make a bad business decision.
Sports Illustrated reports Sunday that the NBA's takeover of the Hornets is imminent -- it could happen within the next few days -- and lists Kansas City, Anaheim and Chicago as possible relocation sites. One would assume the current sale process, which has dragged on for nearly a year, would have exhausted any other possible local ownership groups during its early stages. And if the giant "for sale" sign on the Hornets for the last nine months didn't attract a legit local buyer, it's difficult to see how a new "for sale" sign, this time embossed by the NBA's logo, is going to make much of a difference in the gulf. Making the possibility of relocation even more likely is a recent report that the Hornets are not hitting the attendance benchmarks needed to lock itself into its arena lease in New Orleans. In other words, should an outside buyer emerge with an eye towards moving the team to his destination of choice, a la Clay Bennett and the Oklahoma City Thunder, a major, expensive hurdle that usually exists wouldn't be there to slow down the process. It's grim news for the Hornets, their fans and, especially, new coach Monty Williams and new general manager Dell Demps, who have put the team's roster in order quickly upon their arrivals this summer and have created a winning basketball atmosphere in the face of all of this uncertainty and adversity.  In the long run, a new owner not named George Shinn is better for all involved, but the sale of the team will undoubtedly remain a painful process, one that could cost the team its franchise player, Chris Paul. If I'm Paul, intent on winning and competing for an NBA title in the short-term, thanks to questions about my surgically-repaired knee -- I take a step back and realize that franchises with this much front office turmoil simply do not win titles -- nor consistently compete for them -- in the NBA. If this ownership group can't even sell its majority stake properly, and there are no prospective buyers anxious to do a better job, how will this franchise ever build a true contender? The answer? It won't.  Which leaves Paul with two options: settle in for the (potentially years-long) long haul of up-and-down, day-to-day confusion about the franchise's direction, or start seriously exploring greener pastures. While trade requests are always met with a lot of backlash, in this case it's hard to tell who would blame him. It's one thing to carry four teammates on your back, it's another to carry an ownership group. No player can reasonably be expected to shoulder that burden. Update (5:25 pm):
The Times-Picayune reports Sunday afternoon that the NBA is maintaining a public commitment to the city of New Orleans, and has installed a Lousiana native to oversee the ongoing sale negotiations.
Jac Sperling, vice charrman of the NHL's Minnesota Wild is a New Orleans-born attorney who has in the past negotiated the sale of professional sports teams and guided the Wild into one of hockey's most successful franchises, according to a report at SI.com.
A league source said Sunday that NBA Commissioner David Stern would likely be taking these steps because he firmly wants the Hornets to remain in New Orleans. By taking over the team, the source said, Stern would be able to ensure a sale to someone who was also committed to keeping the team in New Orleans. The Hornets said team president Hugh Weber would not comment on the latest developments, but that Weber would still be in control of the day-to-day operations of the team.
Of course the NBA is invested in franchise stability. And it's also invested in keeping Hornets fans interested in their team in the short term. The league has no choice but to take a pro-New Orleans stance publicly. But as Seattle recently taught basketball fans, money speaks far louder than rhetoric. The only hope for basketball in New Orleans is local money that has, to this point, been nonexistent. 
Posted on: December 4, 2010 1:55 pm
Edited on: December 4, 2010 1:56 pm
 

One reason Chouest backed out? Potential lockout

Posted by Royce Young

The Hornets are walking down a weird path right now. The franchise may be released from its lease with New Orleans Arena because of attendence issues. But on top of that, reports are that the NBA is very close to purchasing the team after apparent buyer Gary Chouest backed off from purchasing the franchise from George Shinn.

For months, it was believed Chouest would purchase the team. But he unexpectedly backed off leaving people to wonder why. And according to the Times-Picayune, it has a lot to do with the NBA's uncertain state surrounding a potential lockout.

On top of that, the report says Chouest doesn't feel like he has the time available to run an NBA franchise as the sole owner while still operating a very successful private business. Chouest is a billionaire that made his dollars from a global marine service company called Edison Chouest Offshore, but was hit hard by the moratorium on deepwater drilling in the Gulf of Mexico after the BP oil spill.

Reportedly, Chouest was set to purchase the team from Shinn for around $300 million. Currently, he owns a 35 percent stake in the team. Last April, Shinn, who was diagnosed with cancer about a year ago, reached an agreement in principle to sell his majority share of the team to Chouest. But no official deal ever came out, indicating that there was some kind of hang up.

And what that probably is includes the uncertainty surrounding the team's lease, the potential work stoppage, Chris Paul's potential desire to leave and whether or not the franchise actually can be profitable in New Orleans.

Add all of those things up and it's understandable how someone might balk at buying the team. The future of professional basketball could be in jeopardy right now, and it could be the NBA's own situation that is helping cause it. A lockout will hurt players and owners, but it could devastate a franchise as fragile as the Hornets.
Posted on: December 4, 2010 1:44 am
Edited on: December 4, 2010 1:45 am
 

Report: NBA may acquire control of Hornets

Reports indicate league considering acquiring control of Hornets in effort to stabilize ownership situation as word spreads that new majority owner has cold feet.  Posted by Matt Moore




The sale of the New Orleans Hornets has gone from interesting to strange to bizarre, to downright berserk. 

First, George Shinn had "come to terms" with Gary Chouest to sell the Hornets, ending a reign of anxiety for Hornets fans as the man who ripped the Hornets out of Charlotte (which still has not recovered) would be replaced with a local guy that could bring new life to the franchise. Then the months dragged on. And on. And there were rumblings that the sale was held up with details. Some rumors suggested that the holdups were non-issues. 

Then earlier this week the Times Picayune reported that the city was facing the possibility of the Hornets being able to opt-out of their lease if attendance measures weren't raised. For the Hornets to have looked like they have (up until about six games ago) and still not be pulling is a huge concern. 

That is, it was until bigger concerns hit. 

Reports surfaced Friday night that the NBA is considering purchasing the New Orleans Hornets, in an effort similar to Major League Baseball's acquisition of the Montreal Expos to find them a stable ownership group. It is believed that the league intends to find an ownership group committed to keeping the Hornets in New Orleans, even with the opt-out possibly becoming available soon. Originally it was believed the effort could be considered in an effort to help the sale to Chouest. 

That's not sounding so promising anymore. 

Late Friday the Times-Picayune reported the following:
Sources indicated Friday night that Chouest does not think he can devote the needed time to run an NBA franchise and operate his private business.
via New Orleans Hornets could become first franchise owned by the NBA | NOLA.com.   

The loss of Chouest as the next owner throws much of the situation in doubt. Shinn no longer wants to own the team, there's not a new majority owner in place, the league may have to step in, and oh, yeah, Chris Paul's been involved in questions about his future in New Orleans since July. It's almost funny to think that it may be the team itself that moves, taking Paul with it, if it weren't for the fact that it would be so depressing for a team that's gone through so much. 

Losing the Hornets in New Orleans wouldn't be a crushing blow for the city by any means (as evident by the attendance woes). But the Hornets' fortunes are tied with memories of Hurricane Katrina, of their temporary relocation to Oklahoma City and the rousing welcome they received that led to the Thunder shipping there from Seattle, and of the Hornets' resurgence in 2008, the same year the league held the All-Star game in a still-rebuilding New Orleans. It would look bad for the league, particularly as it shores up strength and public approval for CBA talks this summer which are sure to be tooth-and-nail, to have to acquire a team and not have solid ownership in place in such a publicly sensitive city. 

It's also a very heavy-handed approach for a league and a commissioner who very much does not usually act in such a manner. David Stern is hard-line and involved when it comes to his players and the control of the league, but hands-off with ownership, wanting them to sort things out on their own. That's why he never formally became involved during the Isiah Thomas era in New York, and, despite what many Sonics fans feel, there was no evidence that Stern condoned or supported Clay Bennett's move to Oklahoma City. This approach would mean a significant financial investment from the league, and sets a dangerous precedent, considering how often NBA teams are switching hands these days. With ownership situations in Memphis, Detroit, and potentially Milwaukee, Sacramento, and eventually Charlotte (come on, it's MJ), the league could be putting itself in a dangerous position with other owners wanting a handout-for-a-way-out. 

Meanwhile, the Hornets have now lost 5 of their last 7, Chris Paul looks very much like he's not 100%, and Jarrett Jack is not the savior off the bench. 

What was once a murky situation for the Hornets is quickly becoming a full-blown quagmire for the city, the team, and now the league. 
 
 
 
 
The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com