Sorry - I screwed the thread up trying to paste in the transcript that now appears in the next post
Per NBA Press Release
NBA TO PURCHASE NEW ORLEANS HORNETS
NEW YORK, Dec. 6, 2010 -- NBA Commissioner David Stern announced today 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.
“George Shinn has been an exceptional owner for New Orleans and Gary Chouest has been extraordinarily supportive as a minority owner,” said Stern. “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 Hornets have a strong management team in Hugh Weber, Dell Demps, and Monty Williams and we have recruited Jac Sperling, a seasoned sports executive and New Orleans native, to be the team’s chairman and governor, with Hugh serving as president and alternate governor. I have notified Governor Jindal and Mayor Landrieu about this transaction and will continue our dialogue with them about ways to strengthen the franchise for new ownership in New Orleans.”
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.”
“New Orleans owes a debt of gratitude to George for bringing NBA basketball back to the city,” said Chouest. “I have greatly enjoyed the experience with the Hornets and, of course, will continue to support the team.”
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.
“George, Gary and Hugh have done a tremendous job building up and developing a franchise that delivers fun, exciting and memorable experiences for its fans on and off the court,” said Sperling. “The league has assured me that management will have the necessary resources to build on that success and grow the business through increased ticket and sponsorship sales, keep the team competitive and further the team's relationship with the fans of New Orleans.”
“Our purpose and resolve will always be to build the Hornets into a championship contender and continue to use our resources to build a legacy in our great community,” said Weber. “I’m privileged and fortunate to have worked for such supportive and collaborative owners in George and Gary and am delighted that they both will remain available to us to provide their counsel during this period of transition and beyond.”
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Sorry - I screwed the thread up trying to paste in the transcript that now appears in the next post
Audio link for transcript below: http://www.nba.com/hornets/news/audi...html?source=TS
An Interview with: DAVID STERN
DAVID STERN: Thanks everyone for joining us. Today we executed a purchase agreement for the NBA to purchase the New Orleans Hornets. We did this following the decision by Gary Chouest not to proceed with the acquisition from George Shinn. This will require a final vote by the Board of Governors, and we expect that vote to take place within a week.
I just want to add that George has been an exceptional owner for New Orleans, and Gary Chouest, as well, has been a terrific and supportive minority owner, and both of them have agreed to remain involved and to be helpful as we seek to continue the success that the Hornets have had.
I think this is unusual for us as a league. It's the first time it's ever been done. But for us, in light of the strong management team that the Hornets have with Hugh Weber, Dell Demps and Monty Williams and the availability of a sports executive with the credentials of Jack Sperling, who is also a native of New Orleans, it made sense for us to go forward.
I've spoken today with Mayor Landrieu who has pledged his support, and Governor Jindal, who has said that he will be as supportive as he's always been, which is very. And we will continue the dialogue with both gentlemen as we seek to strengthen the franchise for New Orleans.
I guess I would say that everything else is in the press release. I would just like to add that we really are very, very confident in the management team. And this move is designed to give them and assure them the funding that is necessary to make the team competitive and to keep it competitive and to continue to make it successful off the court.
With that, we're happy to answer any questions. Jack and Hugh have been asked to join us. They're on, so we can answer any questions that you have. Thank you.
THE MODERATOR: Questions?
Q. David, can you say what you're spending and what your timetable is for trying to sell the team?
DAVID STERN: I can say that the franchise has been valued in excess of $300 million. And we don't have a time frame. In fact, we're stepping forward so we can do more work, understand the situation on the ground, the dialogue with the state, a better analysis of the business, although we've analyzed it a fair amount, we want to make sure we can comfortably understand everything about it. So we're in no hurry.
Q. Can you say whether your offer is in excess or about the same as Gary
DAVID STERN: It's the same as what Gary and George were talking about.
Q. Can you elaborate maybe on that previous question; is that the reason why the NBA stepped in, because they didn't want the sale to be too low to, I guess, hinder other potential sales in the future or to devalue the league in any way by having a sale for I guess a ridiculously low price?
DAVID STERN: No. To the contrary, I think it was a fair price that was negotiated. And we wouldn't have purchased the team unless we thought it were a fair price. But in light of the fact that the negotiations have been pending for so long and the expectation in the marketplace that it's going to be sold, we thought it was best to step in.
George actually suggested it to me that we consider the purchase of the Hornets when the transaction couldn't be closed, then he suggested that that was the best way to ensure that the city of New Orleans would get the best shot at maintaining the team. And I recommended it to the board in October. And they authorized me to proceed. Not to make the deal but to proceed.
And here we are. And we're going to go back and get the final authority. But the answer to your question is no.
Q. David, a couple of questions here. Why is it in the league's best interests to buy the team instead of giving George the ability to take more money out of the credit facility? I mean, it seems like the past two deals that have been done with leagues have been the Coyotes where the NHL didn't quite know where they were going with it and Major League Baseball which got a profit of $280 million because they did know where to go. Why is it in the league's best interest to do this? Is it a safe investment for the league with the labor negotiations coming up?
DAVID STERN: We think it's a very good investment for the league. We also think that New Orleans was at the maximum of its credit limit. And that would just have increased the loss for the ownership group. And in order to make things move as smoothly as possible we thought it best if we moved in, and we're confident that whatever we decide to do here it will not be harmful to the overall league or franchise values.
Q. Are you sure that in the end you'll make a profit off it?
DAVID STERN: Yes.
Q. David, do you think that if the league had not stepped in and done this that George would have sold the team to someone who would have moved it out of New Orleans?
DAVID STERN: I think that's possible, if not likely. But that would have been a long, drawn out procedure. And this was the best way to assure the smoothest possible transition with a league ownership that didn't put the ownership position under pressure. And this was the most stabilizing force for the team in New Orleans that we could come up with.
Q. And also, David, how much did you look at? How much have you all looked at how Major League Baseball handled the Nationals when they owned them and ultimately got them sold, and is that going to be your template, both in terms of time and of how the sale procedure was handled?
DAVID STERN: Well, I have people my colleagues are quite familiar in house with both the Montreal Expo situation and the Phoenix Coyote situation. No two situations are exactly alike.
But what we do know is that with the management team in place, the budgets about to be approved and the current performance, that we are in no hurry. And we'll be making decisions as the season winds down.
Q. I'm just wondering, there's no timetable for the sale of the team. Is there a different procedure for prospective owners based on whether or not they would keep the team in New Orleans or, for example, an owner who was in Kansas City or Anaheim or Seattle or some other city, do they face different hurdles than an owner keeping the team in New Orleans?
DAVID STERN: I think in fairness, any purchase outside of New Orleans in the long run would involve the potential of a relocation fee, or at least a valuation of the franchise based upon a relocation fee. But we didn't want to get into that now. And so I think the best thing we can do is do this and let everyone who doesn't know what our e mail address is to know it and then we can receive such expressions of interest over time.
But I think that anything that came in earlier than the early part of next year would be premature.
Q. And also it was reported that Mr. Chouest, part of the reason he backed out of this deal was the uncertainty over the collective bargaining situation. Is it safe to say that if an owner in New Orleans had not been found to this point, that one probably won't be found until that situation is resolved?
DAVID STERN: No, Gary and I had a fair amount of conversation. And he never raised that. So that's media speculation. So it wouldn't be fair to say. That said, I think that we're not in any hurry. And so it may well be that this team does not get transferred before the successful conclusion of collective bargaining.
Q. One last thing if I could. Is there a concern that other owners in this league would be less than enthusiastic about keeping this team for a length of time in a city where it obviously has struggled to be financially viable? I mean, the attendance issues are well documented. The struggles the team has faced are well documented. How long of a patience do you foresee for the other members of ownership to keep operating the team there?
DAVID STERN: Well, we expect the collective bargaining to conclude successfully and improve the financial condition of all of our teams, including New Orleans. We expect revenue sharing to be more robust than it currently is. And so we're not in any particular hurry, and our owners have I think you made the correct or someone along the way made the observation that we'll wait perhaps until collective bargaining gets concluded. We just don't have a timetable now.
For us, the impetus was to act now to keep the team functioning as well as it has been functioning and to seek to maximize revenue during the season that we're in, reduce losses, dialogue with the state and the city and then go from there. We're not out soliciting interest in ownership right now.
Q. Commissioner, in the statement that was issued in advance of the conference, you allude to Gary Chouest's comments about the uncertainty of the economic situation in New Orleans. Do you have any concerns moving forward that given that economic situation it makes keeping a franchise here less viable, or is it an instance where you really have a whole country that is sort of dealing with some uncertain economic situations?
DAVID STERN: I think in particular, New Orleans is dealing with its own situation with respect to everything relating to drilling and the oil extraction industry. So I think every region has its own issues but New Orleans has its particular set of issues.
And as a city, it has certainly borne its share of difficulty which we're all familiar with and we've all worked together to ameliorate. But with that said, I think that prospective purchasers will look at everything including the amount of assistance that sports teams in New Orleans get from the state.
Q. David, what is Gary Chouest's role, if any, now that this transaction has transpired? And also if Gary was going to be pretty much the most eligible person to buy the franchise from George, is it realistic to believe that someone local will be able to be found to keep the franchise and buy the franchise and keep it in New Orleans?
DAVID STERN: I guess I would say, in answer to your first question, Gary is a valued advisor and prominent season ticket holder. And he will continue to assist us with respect to visits with local businesses and generally promoting the importance of the franchise to the city.
To your second, I think that Gary and George, because of their respective positions, have been so sort of continuously involved that this really has not been generally shopped for ownership in New Orleans, except under last minute conditions when this deal did not happen. And so I don't think that I would feel deterred simply because Gary and George didn't conclude their deal. I wouldn't preclude others from stepping forward to own the team in New Orleans. And it's not my purpose to negotiate on this call with the Governor, but it's a subject that requires a dialogue, and we've begun that dialogue. It's been ongoing for over the last year.
Q. Could you ever foresee Gary being lured back to the table? And second, just talk about what kind of partner you would say Louisiana has been in supporting the pro sports infrastructure for the Hornets and what role that plays in wanting to keep the team --
DAVID STERN: I think that nothing precludes Gary from stepping back in. That's a decision for Gary to make. We have had a great relationship with Gary.
And in fact we've had a great relationship with George. And George has been the most supportive owner for his city and state. And I would say that the entire reason that the team was able to move to New Orleans in the first place was the support of the state. So I think that the state has been supportive in its own way for a number of years in a very positive, positive way.
Q. First, as far as looking for investors or owner in New Orleans, what would be most ideal? Would you like to have a group of investors if you could get that, or what would be the situation that would be ideal?
DAVID STERN: I don't want to sound evasive, but I am on this one because I haven't thought about it and we haven't thought about it. We just know that we need to go in and analyze the situation better, have our discussion with the state and the city and then seeing what we learn from that and what advice and direction we get is what the best way to proceed here is.
Q. Will you adhere to the current lease that had those benchmark requirements? I didn't hear your introduction and you might have said that, but I didn't hear that. Does everything stay according to everything
DAVID STERN: We're going to succeed to ownership of the team and whatever the obligations and rights of that ownership we're going to move into those. But we're going to decide how we exercise those after a period of time that requires us to learn as much as we possibly can about the operation of the team and its potential for future success in New Orleans.
Q. Do you foresee, I'm speculating, but do you foresee any problems going into your negotiations for the Collective Bargaining Agreement now that you're one of the owners of a franchise, is that a potential for conflict?
DAVID STERN: That's interesting. I don't see it. I don't see it, because basically we now have 29 owners, and the 29 owners own this team. So I believe that our interests are perfectly aligned.
Q. Does the possibility of the lease opening up and the team essentially being a free agent, does that raise the value of the franchise, do you think, in terms of selling it?
DAVID STERN: Would you ask me that question again? I don't quite understand it.
Q. Well, the idea it's been reported that if they don't meet a certain benchmark through mid January in terms of attendance, they can get out of their lease. And I'm wondering the fact that would enable the team to be moved free of the lease, does that raise the value of the franchise now that you're the seller?
DAVID STERN: Well, I think that I guess at a certain level that raises the potential value of the franchise no matter who owns the team. So we're aware of that. But that is just one factor. I think the lease itself without that clause doesn't run beyond 2014, which is going to be here before you know it. So there's a long term negotiation required on the one hand with the state of Louisiana. But the lease does give some flexibility if it's determined that the future is not in Louisiana, but we expect to exhaust what the future would look like in Louisiana. And, frankly, that's one of the reasons why we stepped in and made the purchase.
Q. What about it's been obvious for years that you're interested in international investment. Now that you are involved in selling the team and no one has better international connections, is that something to be aware of going forward, Middle East investment or otherwise?
DAVID STERN: That's one possibility. But, frankly, those international connections have been used for the benefit of all teams. So that is to say that the introduction of Mr. Prokhorov to the Nets, and some other international buyers who are currently considering investments in the NBA.
So that's just an expanded base of potential equity for our league, and that's something we do as a matter of course. Actually, I have a meeting next week with some potential investors, not in New Orleans, but another team, who are not United States investors.
Q. Is this an if then proposition, where first you look for investors in New Orleans and then elsewhere, or is that a luxury you can't afford? Are you basically going to say everybody bring your best offer in and then you'll decide?
DAVID STERN: I guess we haven't even analyzed all the possibilities here, but I think the answer is we'll be making the world aware of our decisions. But we have the luxury of time to make these decisions. And so frankly that was one of the best reasons for us to step forward so that the luxury of time was on our side, that there didn't have to be made a long term decision on a very short framework with certain pressures. And we think we've eliminated the pressure and will be able to look at this in the context of moving, staying, collective bargaining, you name it, we're not going to make a short term quick decision on this. We know that we have a pretty good idea what the budget is.
We know that management has a plan to meet that budget or do better. And we know that they also have a plan with respect to the development of the team on the court that makes the fans of New Orleans and Louisiana proud of that team. So this just made a lot of sense the more we thought about it. And I expect it to be approved next week by an overwhelming majority of the board.
Q. My one question is this: As I've gone out and I've spoken with people today, their first reaction to this news is, oh, that's the handwriting on the wall that the Hornets two years from now won't be here. Why is that not the case? What do you tell those people who believe that?
DAVID STERN: I guess what I would tell them is I don't know that to be the case. And to eliminate the thought that that was almost a certainty, the league stepped up to make this purchase. But we'll have to see what develops.
I think this purchase by us today remains the best, I think, opportunity for the franchise to remain in New Orleans for the long term. So it's exactly the opposite of their reaction.
Q. Just wondering, I know you had mentioned the talks with the state. Does an amended lease that is more team friendly, do you think that's a necessity to getting a deal done here?
DAVID STERN: Whether you call it a lease or some additional arrangements that I think the state is probably familiar with in the context of a sport whose ball is shaped differently than ours, I think that the state will be a party along with the team and possibly the city to a broader deal. But that's one of the issues. And I think it's a fair issue. And the governor knows we're coming.
Q. Just on some clarification real quick. You said Gary Chouest would be a valued advisor. So did the NBA buy the Hornets, the majority shares from George Shinn and Gary Chouest's minority shares, or does he still have a minority stake?
DAVID STERN: Yes. No, no, the NBA bought I'm sorry if there's any confusion about that. The NBA bought 100 percent, George's majority share and Gary's minority share.
Q. And so Gary's interest is down as what you called it a valued advisor, is just
DAVID STERN: A valued advisor, former owner, a potential future owner and a valued season ticket holder. And I might to add, a good friend of mine and the NBAs.
Q. I'm assuming you don't go this is the first time you've done this, so you don't go into these things lightly. But how bad off was Mr. Shinn's finances that you felt the need to step in here versus potentially other clubs? I could see this opening the door to other clubs saying, well, I'm having financial issues, why don't you come help me, too.
DAVID STERN: That's a fair question, and our door is open and our telephone lines are available. We have a team here whose ownership was not in the same position of all of our other owners to fund losses. And we decided that rather than saddle the franchise at this point with more losses, it would be prudent for us to step in.
We are aware of the economic situation of our other teams and our belief is that they are all able to withstand the losses that may be occurring and will occur during this season and beyond.
Q. You have been a proponent of obviously keeping the franchise in New Orleans post Katrina. Obviously pre Katrina, when this franchise transferred to New Orleans from Charlotte, you were one of the main emphasis behind coming to New Orleans. Do you still feel that New Orleans is a viable NBA city? And can the Hornets franchise be viable in New Orleans without some type of assistance or inducements from the state of Louisiana?
DAVID STERN: I guess I supported the move to New Orleans. I supported the return to New Orleans. I championed the first game, major league sports event that was played in New Orleans, post Katrina, and we awarded the All Star game to New Orleans when there was a suggestion that that was a futile act.
So we have shown confidence on every occasion in the city of New Orleans. And as part of the inducement to bring the team, the state did make certain commitments to the team and has lived up to that and the team its obligations.
So if the question is do I think there's a potential for keeping a team there, yes. Of course. Would we have to look at the inducement structure anew, I think so. I'm not positive. We've got to get there and do our analysis because anything we do has to be for the long term.
Q. Can you explain when trades are made, or if a free agent wants to be signed, what is the process that Dell has to go through, do you say yeah, we'll do that trade or we won't do that trade?
DAVID STERN: Actually, the league generally approves all trades, number one. And number two, as far as we're concerned there have been while this process has been going on, there have been two significant transactions. And our response to both of them was you guys are management, you understand your budget and your instructions, just go ahead, because we've got Jack Sperling, Hugh Webber here, and if they recommend it, then we're going to be approving it.
Q. And as far as free agency, how do you do that?
DAVID STERN: What free agents did you have in mind?
Q. David West, say next year, something like that, big contracts.
DAVID STERN: That's a bridge that we're not planning to cross today because right now there are no free agents that I'm aware of and there won't be free agents until July 1 or a new Collective Bargaining Agreement. So we'll deal with the team and all the other issues in that context.
Q. Just wanted to ask, history is probably not going to look too kindly on George Shinn's years and ownership with obviously what happened in Charlotte the way this is ending now. How would you reflect on his time in the league as an owner?
DAVID STERN: I would reflect on the fact that George Shinn put the spotlight of the world on Charlotte. And both owners wanted to know whether it was Charlotte, West Virginia or Charlotte, Virginia or Charlotte, North Carolina. And from George's coming here and talking of Charlotte, last time I looked, I think there might even be a football team there at a time when there were no sports.
So I think George is owed a debt of gratitude by Charlotte with respect to the bringing of basketball to that great city that turned out to be a good NBA city and still is.
I think that New Orleans owes a debt to George for deciding that it was a place that could support NBA basketball and owes an additional debt to go back for his decision to come whatever, after a very successful run in Oklahoma City, to return the team to New Orleans where he wanted to be part of the reconstruction.
And even now, third or fourth, as he came to me and said, you know, it's a little late to start soliciting bids in New Orleans again, so I think it would be wise for the league to buy the team because that's the best shot for New Orleans. So I think that his legacy will be a very good one.
Q. Last, for you, having watched baseball do this with the Expos, hockey with the Coyotes, isn't this a scenario that a league dreads to have to take this step?
DAVID STERN: I don't think we expect it. But I think maybe I was jealous that Bud and Gary were having all the fun.
THE MODERATOR: Thank you.
again, sorry for deleting everyone's comments - I screwed up trying to insert the transcript
Can we ban you for that?Originally Posted by say-what
Listen to the conference. Stern could have thrown cold water on us for a half an hour. Didn't do it. Not once. In all other instances of possible relocation, he has essentially challenged the local market to do X, Y, Z or else. Not here, not today. Ask yourself why? Why does he seem so cool and confident? Stern shows us what he wants us to see, and he wanted us to see that this is New Orleans' team. As long as the power brokers in the city and state don't screw that up, we should be golden!
Time for some football!!!
I just listened to the entire 36 minute press conference and I heard not one "WE ARE COMMITTED TO NEW ORLEANS." What I heard was the state needs to step up and give the Hornets a bunch more free stuff like they gave the Saints. Pathetic. We better find a good solid local owner with deep pockets or this team is DONE in New Orleans.
I survived Katrina, but nothing I owned did.
I heard a lot of commitment to NOLA. What I didn't hear was threats to relocate if NOLA didn't step up.
Guess we just heard different bro, I heard nothing even close to committing to this city. I guess I need to go back and listen again.Originally Posted by say-what
Yes, ban hammer is a must, 20 minutes for your time out sir!
Here's the deal.
If you are convinced that they are going to screw us, you will hear negatives.
If you are a blind optimist, you will find the good parts.
I'll be very honest. I logged in to listen to this and then received a very comforting call which pulled me away from Stern's Q and A. Then after that, I had another conversation with someone who knows exactly whats going on here...and I felt even better.
So...when I go back and listen to this...I guess I'll be looking for the good parts. Not because I'm a blind optimist, but because I have every reason to beleive we are going to come out of this in great shape. This franchise will emerge more stable and financially sound than ever...here...in New Orleans!
Thanks Harv...Originally Posted by Harvey
Last time Stern talked that highly of someone it was Clay.
Read the transcript, he talks about Chouest like he did Clay. That tells me a lot, he had no reason to do that. I'm sure we can look at all kinds of comments, but his strongest were about Chouest:
DAVID STERN: A valued advisor, former owner, a potential future owner and a valued season ticket holder. And I might to add, a good friend of mine and the NBAs.
1) Stern is good. Slick good.
2) I did not realize how bad the current losses are. Shinn can't hold on for another year or two, even with the NBA's banking connections and leverage? What kind of major changes can one realistically hope to make in New Orleans that would change this from an ownership can't hold on and suffer more losses situation into a business worth $300million as an ongoing operation situation? A few more sponsors? A few thousand more tickets per game? (See # 4, infra.)
3) Chouest is not out of the picture completely. Stern took every opportunity to keep that door open. No one said anything about him deciding that he did not have the time to run two businesses. I never will buy that because he's a smart man who would have realized that before he agreed to buy months ago. They kept saying that the deal couldn't close. I read that as meaning that Chouest would have gone through with it under the right conditions....
4) Louisiana and New Orleans taxpayers (yeah you, the ones whose higher education and public health funds are getting slashed), the NBA wants more than just your ticket and concession dollars. My favorite line, after referencing the Saints annual public tribute deal, Stern says: "And the governor knows we're coming."
5) NBA has plenty of time to park the team's ownership because its a terrible time for any NBA owner to sell. Great Recession, over-saturation of entertainment market AND the upcoming labor war.
6) Stern said he expected greater revenue sharing along with resolution of labor war. Great thing for New Orleans and a realistic necessity for NBA unless they want to get rid of more than just one or two teams.
Net: I predict we are stuck in this NBA Zombie Franchise Situation until after the upcoming labor war. Then NBA tries to put together local ownership group, perhaps including Chouest. Maybe the new CBA and some revenue sharing improve the situation enough that NBA finds local buyer. If not, they can honestly say they tried and move on. The problem is, Zombie Franchise can easily scare locals into staying home despite good product, the team will suffer and start a snowball of losses and falling attendance, making local ownership scared (too smart?) to step up to the plate and NBA will be less interested in keeping team here.
Last edited by Big Fan; 12-06-2010 at 11:34 PM.
Here is the one thing fans and business can do. Buy tickets...preferrably season tickets. Use those tickets...or make sure someone else does. Thats the single greatest thing we as fans can do to help this franchise right now.
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