Play Fantasy The Most Award Winning Fantasy game with real time scoring, top expert analysis, custom settings, and more. Play Now
 
Tag:business
Posted on: January 11, 2011 4:20 pm
Edited on: January 11, 2011 4:22 pm
 

Kings arena to be Power Balance Pavilion?

Posted by Royce Young

One of the best corporate sponsored arenas out there has always been ARCO Arena. Most people don't know what "ARCO" is (it's a gas company) so it kind of sounded like it was just a regular arena name without any sponsorship attached to it.

In 2011, naming rights for the arena will expire and after 25 years of being under the ARCO name, the Sacramento Kings' house will have its naming rights up for grabs.

And according to Sactown Royalty, the new arena will have an interesting new sponsor. The Kings have agreed in principle to a five-year deal with Power Balance LLC to rename the arena "Power Balance Pavilion." Seriously.

Owner Joe Maloof told the Sacramento Bee that people would be surprised. And I'm pretty sure they wlll be.

Power Balance is an Orange County based company founded in 2007 that pitches wristbands and bracelets that are said to improve your balance and athletic performance. Power Balance claims to "use holographic technology" to "work with your body’s natural energy field."  After claiming that the bands really totally worked, Power Balance recently put out a statement saying otherwise.

The release said: "In our advertising we stated that Power Balance wristbands improved your strength, balance and flexibility. We admit that there is no credible scientific evidence that supports our claims and therefore we engaged in misleading conduct in breach of s52 of the Trade Practices Act 1974. If you feel you have been misled by our promotions, we wish to unreservedly apologise and offer a full refund."

So Power Balance bracelets may not actually be what they say they are. But if you've got money, you can have a building names after you.

Recently, Maloof hinted that the franchise might be open to relocation primarily because of issues with finances. But hey, with a new sponsor over the arena and a five-year deal to boot, that's a little change in the pocket.
Category: NBA
Posted on: January 6, 2011 11:10 am
Edited on: January 6, 2011 2:18 pm
 

Larry Ellison tried to buy the Hornets

Posted by Royce Young

You know how the NBA bought the New Orleans Hornets? Well I just assumed that was because there wasn't another buyer out there after Gary Chouest backed off. But really, it was because there wasn't the right buyer.

Larry Eillison told the San Jose Mercury that he put in a $350 million bid to buy the Hornets, but was rebuffed and outbid by the league. David Stern said the league paid "a little over $300 million" for the Hornets.

Eillison, who is a billionaire by way of his company Oracle, also tried to purchase the Golden State Warriors over the summer but didn't win that bid either. Ellison is the world's sixth richest person.

Probably one reason the league "outbid" or just said no to Elllison is that he was in no way committed to keeping the team in New Orleans. He was definitely buying with the intention to move, something the league is not looking at doing at the current moment. So the fact that there was a buyer available but the league pushed him away bodes well for the future of professional basketball in New Orleans.

At least for now. When the NBA starts dropping major money on the franchise and things get too tough to operate, I'm sure they'll be fine selling the team to whoever as long as the buyer's got a big checkbook.

Eillison told the Mercury News in regards to him buying the Hornets, ""I was trying to buy the team first, and then figure out what I was going to do with it." He didn't necessarily have plans to move the team to San Jose, where he currently resides.

Forbes blogger Mike Ozanian said a source suggested Ellison is interested in buying the Hornets for about $300 million and then pay the Warriors an additional $150 million for the legal right to operate a second NBA franchise in the Bay Area. Ellison said those reports were not true.

It's interesting nonetheless that a buyer was at least there. All indications made were that the NBA really didn't have an option outside of Chouest when George Shinn committed to selling. But evidently there was. It's just the prospective owner didn't have the plan in mind the NBA wants. Kind of a conflict of interest, wouldn't you say?
Posted on: December 16, 2010 10:56 am
 

Pistons sale is hitting the skids

Posted by Royce Young

It was mentioned in today's Shootaround, but the Pistons could be having issues with their sale to Mike Ilitch. Issues may not be the right word. "Big stinking problems" probably is a little more accurate.

According to Forbes, after agreeing to buy the team for more than $400 million, Ilitch discovered the team's revenues presented to him in the "prospectus" were inflated. Ilitch got mad, lowered his offer and naturally everything blew up.

Forbes estimated the franchise was worth around $450 million last year.

Karen Davidson is the current owner, took over when he husband Bill passed away last year. He loved the team; she doesn't. So she looked to sell and hired Citi Private Bank Sports Advisory to help sell the team and the arena.

Ilitch, the founder of Little Caesars Pizza, of course also owns the Detroit Red Wings and Detroit Tigers and was looking to buy the Pistons. He's a Detroit man and one of the top owners in all of sports. The fit was natural. So for him to get angry over this revenues issue much mean there's a pretty significant problem.

Add together this issue with Ilitch, plus the still slumming state of Detroit's economy and it's hard to imagine Davdison could get anywhere near the $400 million Ilitch was going to pay. Owners buy teams to make money. It used to be you bought a team, watched it lose a little here and there and banked on it to appreciate so you could sell it in 15 years for big dollars. That doesn't happen as much now. Owners don't want to see their dollars get drained by a sports franchise.

So the Pistons sale could be in jeopardy. This of course after the Hornets sale recently fell through, which forced the NBA to step up and assume ownership. That won't happen with the Pistons though, because there are still other prospective buyers and the current owner isn't pressing to sell now. Besides, after some negotiation, I'm sure Ilitch might be able to get the price to where he's more comfortable.

Other candidates to purchase the team included venture capitalist Tom Gores, a Flint native and Michigan State University graduate; a group headed by George Postolos, a former Houston Rockets executive who also was special assistant to NBA Commissioner David Stern; and a group with ties to Dubai.
Category: NBA
Posted on: December 8, 2010 10:23 pm
Edited on: December 8, 2010 10:46 pm
 

The NBA's NOLA dilemma: PR versus profit

As the NBA zeroes in on its acquisition of the Hornets, a moral versus business conundrum awaits the league and its owners over the future of basketball in New Orleans. 
Posted by Matt Moore



Let's start here: No one wants to move the New Orleans Hornets. You can't have watched footage of people dying in the Superdome and not have a soft spot in your heart for the Crescent City. The issue for the NBA as it takes ownership of the team is not one of what would make them and the rest of the world feel good. They know what that is. Find a local owner, keep the team in New Orleans, and everyone lives happily ever after. 

The question is whether that's a viable option and if they really feel that they're not just throwing money down a hole. The financial documents that came out Tuesday from Deadspin outlining the massive financial woes in New Orleans present a significant dilemma for the NBA and its owners as they try and determine the future of this franchise. There were questions about the viability of New Orleans as a market well before a hurricane overwhelmed the levies, and the questions extend not just to attendance and fan interest, but to market economics, sponsorship revenue, and the complete financial situation in New Orleans. This is all before we start to look at the relationship with the city's mayor and Louisiana's governor, both of whom have been very clear about one thing. They hope the NBA commits to keeping the Hornets in the city, but they will not be providing financial handouts in the form of tax breaks or anything else in order to make that happen. Not in this economy, not during the city's continued recovery, and not for a franchise that is a distant third in sports within the wards. (The other two being football and drinking.)

That's where things get tricky. If the NBA is pursuing its due diligence and trying to find the situation that yields the most promise financially within a decent time frame, it's difficult to see New Orleans as the answer to the riddle. Kansas City offers the building ready for attendance now, but has its own set of market questions. Anaheim offers the market and the building. Seattle offers the market and ownership. If David Stern is correct and this issue won't be resolved until after the CBA is resolved, that gives Seattle time to finance a new building as well as for Las Vegas to get approval for a new arena. Other cities waiting for the right situation might be in a better position by then to create an actual bidding war, which would only make it more difficult for the owners to select a bid from New Orleans. 

And yet, at the end of it, there are many positive signs towards New Orleans. Several owners are starting to make noise about being interested in offers. The goodwill of keeping the Hornets in New Orleans is something the league could use after ripping the Sonics away from Seattle under similar (though less emotional circumstances). Keeping the team local is the easy solution. But it also may be viewed as the impossible dream by owners. When the vote to move Seattle to OKC was made, only two owners voted against the measure, Paul Allen in the same area, and Mark Cuban, who questioned moving a big market team to a small market. Similar thoughts could be in play as the owners who voted for the most financially viable option follow suit and owners who question failing markets like New Orleans may not be moved enough to keep the team there. 

At the end of the day, the NBA seems very much in place to make a real "good faith" effort to keep the team in New Orleans. But the realities of the situation may force their hand in a direction no one wants to see. 
In unrelated news, the Hornets drew just a little over 10,000 for their game against the Pistons Wednesday night. 
Posted on: December 6, 2010 1:21 pm
Edited on: December 7, 2010 1:50 pm
 

The Hornets' potential relocation future examined

Should the Hornets not remain in New Orleans, where might they end up? We look at the options.  Posted by Matt Moore


With the NBA expected to take hold of the New Orleans Hornets without a locked on buyer in place, the next question will come immediately. What if a non-NOLA buyer comes through with the best offer? It's the money of the league and the owners that's being invested in removing George Shinn once and for all from the ranks of NBA ownership (see ya, George, don't let the luxury tax hit you on the way out), and the league will have a responsibility to both pursue and accept the best offer available. Should that offer come from someone outside the greater New Orleans area, it's entirely possible that the Hornets could be playing somewhere else in the near future. 

We've been down this road before. And while New Orleans lacks the great and storied history of the Sonics franchise, no one wants to see a city that fought back from the greatest natural disaster to hit a major metropolitan area in United States history lose its team. But this isn't about PR or kids with jerseys or history or anything else. It's about money. And other cities not only have incentive to bring in the team, but the most important assets to convince the NBA to abandon New Orleans: the buildings. 

New Orleans arena was built in 1999 for $114 million. It has a capacity of 18,000, 44 luxury suites, and has been described as "bland." It does not receive rave reviews from sponsors, guests, or media. The other cities in play have both newer arenas, as well as arenas fit more ably for modern NBA economics (luxury suites), etc. Others who do not have such arenas have the awesome draw of the almighty large market. 

So who are the prospective scavengers who might be circling while the Hornets continue to fill ... well, kind of fill New Orleans Arena? Here are the names being floated. (All arena information courtesy of Ballparks.com )

Kansas City: Kansas City once had an NBA team, the Kansas City Kings, now the Sacramento Kings, formerly the Cincinnati Kings, formerly the Rochester Royals, and briefly the Kansas City-Omaha Kings. But the team was terrible, management was terrible, and soon the team was off to Sacramento and the welcome bosom of cowbells. Kansas City is most often criticized as being a "college town," "a baseball town," "a football town" (what isn't?) and unable to support three major pro teams. The last of these criticisms ring most true as both the Royals and Chiefs struggle to fill their stadiums to reasonable capacities during down years (or as we Kansas Citizens like to call them, "the last ten years."

The "college town" aspect is a double-edged sword. While it's true that nearby KU and two-hour-neighbor MU hold the town's attention during basketball season, many of their players wind up in the pros. And at its heart, it's easy to argue that KC is a basketball town. It held the Big 12 tournament for years and the Big 8 before that. (And by "before that" I mean "before Texas used its influence to rob any other school in the Big 12 of any influence"). When the Heat and Thunder played a preseason game this fall, a packed house was in place. Then again, that's the Heat. Some towns simply aren't built for the pro game, and that's the argument of some in regards to KC. 

That said, the jewel in their crown is pretty simple. It's the building. Sprint Center, built in 2005 and opened in 2007, has a capacity of 18,555 with a considerably higher number of available luxury suites and club seating due to how the building was constructed. Specifically, the arena was built to capitalize on how current arena economics work. Tickets are valuable, to be sure, but the money is made with sponsorships, and luxury seating. 

What's missing? A buyer. AEG who owns the Sprint Center, made noise early on about pursuing either a hockey or basketball team to fill the arena. But with the Pittsburgh Penguins using them as a straw man to get a new arena in Pittsburgh, there has been no team to arrive. Furthermore, it turns out the arena is making more money as a concert venue than it may with a regular tenant. With the recession having hit Kansas City well before the rest of the country and a lack of progressive technology firms in the area, finding a prospective owner outside of AEG is going to be a hard sell. Kansas City remains a viable candidate but it remains to be seen if either AEG or the city will commit to making a serious inquiry toward the Hornets. 

St. Louis: Two Show-Me cities with an interest in basketball. Many of the same concerns with Kansas City pop up with St. Louis, only their baseball team pretty much guarantees a significant dropoff of attendance right when the playoffs would start. St. Louis has the population, and has the building (the Scottrade Center where the Blues play). 

The talks of St. Louis have never been as discussed as some of the other cities on this list, but with the Hornets being in such a unique position, it's possible a group could develop to push for a new team under the arch. 

Anaheim: Ah, California. Fun, sun, beaches, and lots and lots of sports teams. With the Los Angeles Lakers and Los Angeles Clippers turning such a huge profit (despite the Clippers being, well, the Clippers) it's no wonder the NBA would be interested in another California team. Anaheim's done well with the Angels and Ducks, and though the market would no doubt be over-saturated should the Hornets relocate to the nearby neighbor of the City of Angels, the high cost of living would bring ticket prices to a point where profit is a near-given. 

As for the arena? They've already got one in place. The Honda Center, home of the Anaheim Ducks, has a capacity of 17,174, with 84 luxury seats and 1,716 club seats. That's a lot of dough in a place ripe with firms looking to purchase such tickets for clients and as perks. It would make the fifth California team along with the Kings (should the Kings stick around in Sacramento) and Warriors, and the area has been invested in looking for a team for a few years. 

In truth, Anaheim is a low-risk move, but could also backfire if the city simply can't sustain three franchises, regardless of its proximity to LA. Additionally, it's unknown if Jerry Buss, who runs the league about as much as anyone who isn't David Stern, would be amiable to another competitor near his market. He brought in Donald Sterling to own and move the San Diego Clippers, but an outsider honing in on his territory may not go over well, despite the massive, all-encompassing popularity and profitability of the Lakers. 

Las Vegas : Long story short, there's no arena, but they're willing to build one if a team is relocated. It's a PR disaster for the league, but a financial windfall for the owners. While the fanbase is sure to be fickle, every high priced mogul and entertainer would have seats, and good ones, for a high price. Sponsorships would be easier to sell than lemonade in hell, and attracting free agents would be a snap. Nice weather, fun city, profitability, and the draw of having the city all to itself in professional sports? What's stopping them?

They still don't have the building. 

There's a group in place pushing for it who even said they had a team lined up . And petitions are being gathered in order to get a vote before the state legislature, but no word has come if they have received enough. The situation remains in flux. 

Seattle: As tempted as I am to scream "Back of the line!" considering Seattle voters had multiple chances to pressure their representatives to save the Sonics and chose to make their stand against corporate greed in the form of publicly funded arenas for privately held teams, it's hard to argue with the fact that Seattle got outright screwed in the Clay Bennett relocation of the Sonics to Oklahoma City as the Thunder. The fanbase is passionate, it's a large market, renewing basketball there would be seen as a good PR move that could dampen the outrage of taking a team away from the city that survived Katrina, and all that merchandise has already been manufactured with the Sonics logo.

The problem?

You guessed it. They still  don't have the building. Key Arena simply isn't up to snuff, built in 1962. But with a capacity of 17,072, it does hold 58 suites and 1,702 club seats. It can make money, but not nearly in the way some of the other newer arenas can, and renovation costs would be high (hence Bennett's ability to squeeze out). Seattle fans have been clamoring for public officials to finance a new stadium, knowing the presence of an open building would bring a team back like moths to a flame. No dice, so far. 

The biggest thing Seattle has going for it? Rich people. With Microsoft CEO Steve Ballmer vocal about the possibility of reacquiring a team, and with enough tech money in the area to finance a new arena in part, Seattle simply has the dough. While Seattle gets off more than it should for its complicity in the relocation of the Sonics, the fans were screwed, and this would go a long way with repairing national damage to the NBA's image in that event. Because moving New Orleans is fine, but Seattle really needs a team, apparently. 

Chicago : This one was brought up by Sports Illustrated  this week and it's an interesting question. Could Chicago support a sixth sports team, and a second basketball team? The Bulls undoubtedly would always be the favorite, the Yankees to the other team's Mets, as it were, but the market is indeed large enough to support a second team. Chicago has some of the best sports fans in the country, and attendance is almost always at stable league measures across sports. There are certainly enough investors to drum up an ownership group if someone was interested in a majority share, and sponsorships wouldn't be an issue, either. 

But what about the building? It already exists. 

The Los Angeles Lakers, Los Angeles Clippers, and Los Angeles Kings all occupy the Staples Center. While Staples is newer than Chicago's United Center which currently hosts the Bulls and defending Stanley Cup champion Blackhawks, the United Center is bigger, and you can make the dates work. The question would be if it would make financial sense for the United Center to give up the free nights for eight months of the year (geez the NBA season is long) in exchange for the tenant, and whether logistics costs would skyrocket too much with having to handle the demands of three teams. 

A second Chicago team would satisfy the NBA owners contingent's interest in a stable, big-market location. An at least temporary arena is in place should the team's owners decide they want their own digs in another part of town, and it's hard to see there being no interest in the club given how rabid Chicago sports fans are.  But that's a whole lot of teams in one market, and even New York has not had more than the Knicks in several decades (though they're due for a new neighbor in 2012). It would simultaneously be the easy way out and a bold move for the league to approve and push for a second team in the Windy City. 

New Orleans : If Gary Chouest is out, a new owner in New Orleans is going to have to come out of left field. The fact that the franchise now looks like a garage sale isn't probably going to bring owners out, at least not the ones the NBA would want. But hey, there's a blog of fans looking for investors to make the $17,000 investment so that the city could own the team. Imagine a blog running an NBA team. We're pretty sure that's about three steps from the apocalypse. 

All kidding aside, the NBA is right to pursue local ownership. We saw with Seattle how traumatic losing a team can be. And while Hornets fans certainly don't have the history or passion of those Sonics fans in number, there's no reason they don't have that quality of investment. Kids still love going to Hornets games with their families, and guys still go Hornets games and yell about Emeka Okafor after the game like any city. The right thing to do would be to keep the Hornets in New Orleans. 

The problem is that these days, the right thing to do is almost never the right business decision to make. 

We'll keep you updated as the Hornets' ownership situation develops.
Posted on: December 1, 2010 1:41 am
 

The future of the Hornets in NOLA is murkier

Doubt about the future of New Orleans is beginning to creep in as attendance deadline nears.
Posted by Matt Moore




There's been constant talk regarding the Hornets relocating since their (still) current owner George Shinn already moved the team once from Charlotte and has always hungered for the dollar. But when the Hornets started rocking in 2007-2008, those talks subsided as the city got behind the team.

Now, with the team off to a hot (although starting to cool) start, surely the city has responded and there are no legality concerns surrounding the arena attendance, right? Right?

Oh, heck.

If the Hornets do not average crowds of at least 14,213 for the next 13 games at the New Orleans Arena, the franchise can opt out of its current lease agreement with the state, according to Doug Thornton, vice president of SMG, the company that manages the Arena and the Superdome.

The Hornets and the state amended their lease agreement in 2007 to extend it through 2014, but an attendance benchmark of 14,735 was implemented. The franchise can opt out of the pact if the benchmark is not made over a period of two consecutive years during the agreement.
via Apparently, the attendance benchmark is back on the table for the New Orleans Hornets | NOLA.com .

The real problem here is that there's no real way to figure it out. New Orleans has long been viewed as suspect from a financial standpoint. In major markets, ticket price alone and sheer demand will keep you afloat (see: Clippers, The Los Angeles). But in smaller markets like NOLA, you have to rely on support, especially in the "fat" years when you're winning in order to survive the "lean" years when you're rebuilding.

And the Hornets just aren't getting it. Now these numbers are more complicated than just ticket sales, since sponsorships and suites have more to do with the economics of arenas nowadays than actual sales. But those provisions are built in for a reason, to protect the team from a city that just won't support it.

Now, I'm sure Hornets fans feel very strongly about their team and its support, but the numbers unfortunately are pretty damning. And with this kind of economy, it becomes harder for a new owner in Gary Chouest to avoid looking at the options. Chouest however, has given no indications that he'll move the team during his discussions.

Then again, Chouest hasn't been confirmed as owner, yet.

It's a sticky situation for the Hornets, the city, and an arena that insiders say is one of the worst in the league. But they faced a similar situation in 2008, and once the Saints season was done, the city responded. Fans have to trust that will happen again this year, provided Chris Paul keeps the good times rolling.
Posted on: November 12, 2010 3:18 pm
Edited on: November 12, 2010 3:22 pm
 

Warriors sale official; let the new era begin

Posted by Royce Young

It took a little longer than expected, but finally, officially, the Chris Cohan era is over in Golden State. The NBA's owners unanimously approved the sale to Joe Lacob and his group that includes managing partner Peter Guber.

Guber tweeted earlier today that the sale was done.

It's almost like the new era has even begun for the Warriors before the sale was actually finalized too. Golden State loosk re-energized, starting 6-3 on the year, one of the team's best starts in over a decade.

Lacob purchased the team with business partner Peter Guber back in mid-July for a reported $450 million. And since taking over (sort of), Lacob has moved quickly trying to restructure the future of the team. He's done numerous interviews trying to lay out a new vision and his influence is likely what helped push Don Nelson out the door and bring Keith Smart in. Lacob was also consulted on the David Lee move as well as the deal that signed Jeremy Lin .

The new owners aren't entirely new to the team ownership game. Lacob bought a share of the Celtics in 2006 and Guber's Mandalay Entertainment owns and operates multiple minor league baseball teams, including two affiliates of the New York Yankees.

Cohan has owned the team for 16 years and in that time has seen the Warriors appear only once in the postseason (2007). Cohan's purchase price was somewhere in the $120 million range. Under Cohan, the Warriors have yielded the second worst record in that span, second to only the Clippers .

It's a good day for Warrior fans to now move past a former ownership that didn't seem as concerned with winning as the new group does. There's really no reason the Warriors shouldn't be better. And now with Cohan out and new owners in, maybe things will turn around.
They're definitely already off to a pretty good start.
Posted on: October 19, 2010 12:47 pm
Edited on: October 19, 2010 12:50 pm
 

Report: Warriors sale pretty much official

Posted by Royce Young

By the first week of November, Chris Cohan will finally be out in Golden State and a new era with a new owner will begin.

Matt Steinmetz of CSN Bay Area reports that according to multiple sources, new owner Joe Lacob has financing in place and is expected to seize control of the team no later than a few days into November. Lacob was hoping to get the owner approval vote at the Oct. 20-21 Board of Governor's meeting, but that appears unlikely, according to Steinmetz.

Will Lacob have control over the team by the season opener Oct. 27? That will be tight, it appears, though one source told Steinmetz is would be done by the time the Warriors open against the Rockets. While Lacob won't likely get the vote Oct. 20, a vote on the sale can be done by e-mail or teleconference at any time. Three-fourths of the owners have to approve of the sale for it to become final.

Lacob purchased the team with business partner Peter Guber back in mid-July for a reported $450 million. And since taking over (sort of), Lacob has moved quickly trying to restructure the future of the team. He's done numerous interviews trying to lay out a new vision and his influence is likely what helped push Don Nelson out the door and bring Keith Smart in. Lacob was also consulted on the David Lee move as well as the deal that signed Jeremy Lin.

Cohan has owned the team for 16 years and in that time has seen the Warriors appear only once in the postseason (2007). Cohan's purchase price was somewhere in the $120 million range.

The Warriors will have their new era soon. Just another week or two until they can wash their hands of the Chris Cohan era and hopefully move on to something a little brighter.
 
 
 
 
The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com