This is the full article that we talked about a few days ago. Meant to throw it up on the blog section earlier, but it slipped my mind somehow.
The first deadline has come and gone for potential Hornets owners to get involved in the purchasing process. Interest in the franchise is very strong, which is not surprising given the team’s successful off-season on the business side. Also, because the Hornets are now owned by the NBA, we can expect a much smoother sale process than the last time around under George Shinn. Back then, issues around Shinn’s personal debts, cash flow, and estate planning added enormous complications. In addition, the lack of a Collective Bargaining Agreement at the league level added uncertainty.
This week’s deadline was an early step, whereby bidders were asked to submit their formal indications of interest. While not yet an end-game negotiation, it is still great news for Hornets fans to know that the process by which the Hornets will choose an owner has officially begun.
Equally encouraging is the breadth of interest. Bidders from 2010 have re-emerged (most notably, Benson and Chouest) plus there is significant national money that has come forward, committed to keeping the team in New Orleans. While Jamal Mashburn’s name has been previously mentioned, Hornets247 has also learned of another familiar NBA name that is assembling a group. A former NBA player, this individual also has a couple decades of coaching and GM experience, providing an interesting twist to his group.
Breaking Down the Potential Categories of Ownership Groups
1. Gary Chouest and company
Keeping the Momentum: In terms of turnover and changes to day-to-day operations, there would be fairly limited disruption within the organization, at least relative to a Benson purchase. Given all of the recent momentum, this is a good thing.
Known Commodity: We already saw the benefits of what Chouest brings as a minority owner in terms of his rolodex full of connections in Baton Rouge and in local industry. Chouest had an enormous impact on sponsorship, luxury suite, and club seating sales throughout his previous tenure with the Hornets.
Local Owner: Gary Chouest is a Louisiana guy and a basketball nut, which would mean there would be a very low chance the team would be moved at any point under his leadership.
Second Fiddle: Chouest has made it quite clear that Edison Chouest Offshore is his most pressing priority in the business world.
Tight Purse-strings: He is also not going to be a guy who is willing to lose lots of money for the chance at a title, which may be important since the new CBA did little to curb spending (and it’s only for six years…)
Requires a Partner: In the past it has appeared that Chouest is unwilling to be the sole owner, or the public face of the franchise, so buying the Hornets will require coordination with at least one minority owner. More people = more complications.
No National Connections on the Basketball Side: Aside from his brief stint as minority owner, he has very little NBA experience or connections.
2. Tom Benson
Access to Financing: Benson owns the Saints outright with virtually zero debt. Considering the NFL just inked a new 10 year labor agreement and their television deal is astronomical, he pretty much owns a printing press. If the NBA required him to raise $300 million cash within the week, he would have bankers lining up to loan him the money. This access to capital means that Benson would not need to take on minority ownership, which tends to complicate matters.
Building an Empire: Benson is steadily building a real estate and media empire in New Orleans, having purchased fox 8 and being rumored to be interested in WWL radio.
Orderly Succession: Benson’s succession plan appears to be in place, with a Board of Directors taking the reins of the Saints after he dies. Owning the Hornets could presumably fit neatly under this structure and ensure continuity for the next few decades.
Customer Service and the Fan Experience: While it may be tempting, at first blush, to consolidate a lot of the back office sales and support jobs of the Hornets and Saints in order to lower costs, this would be devastating to the Hornets ability to build on the success they’ve had forming relationships with fans and sponsors. The Saints have a 70,000 person waiting list not because they do a great job marketing or in their customer support offices, or because they put on a great game day presentation, it’s because they’re the freaking Saints, this is Louisiana, and everyone in ‘Merica loves football. One great things the Hornets have going for them is a very dedicated and hardworking business office that understands the specific challenges facing the team and the experience of overcoming them. The Saints on the other hand have a long history of ****-poor customer support and general neglect of corporate sponsors. I’m convinced we will see a less fan-friendly Hornets franchise if Benson were to take over. People like to look past the Saints of the 1990’s- 2005, but they were a poorly run franchise with a depressed fan base.
Second Fiddle: It’s hard to imagine Benson’s executives ever caring as much about the Hornets as they do the Saints. In my opinion it would in all likelihood permanently reduce them to second class status, since that’s what they would be in the minds of Benson executives.
3. A National Group with Basketball Connections
At least one person in the mix is very familiar among NBA circles, and his name isn’t spelled “Mashburn.” This person, confirmed to be leading a well capitalized group, has NBA experience and connections like nobody else whose name has even come up as a potential owner.
NBA Connections: The main organizer of this group was a player, head coach, GM, and has served in several other NBA roles throughout his 30 plus year basketball career. While not the primary “money man,” he brings a wealth of knowledge to any ownership group that nobody else in the current mix can even touch.
Commitment to New Orleans: Encouragingly, this group, like all of the others, will keep the team in New Orleans. The main investor has previous family ties to the region and intends to move here permanently. He is also open to adding local investors to his group to round out the picture.
Continuity on the Basketball Side: Despite his track-record as an executive, this potential part-owner would not plan to occupy either the role of coach or GM, leaving the power duo of Monty Williams and Dell Demps in place for the foreseeable future.
Not Local, At Least Yet. There’s nobody in this group who is currently living here, at least so far.
4. All of the Other Groups that We Don’t Know About
The NBA runs a good process and has cast a broad net. At this point, we’ll take anybody, just to get this whole thing over with. That said, I believe there are four groups who fall into this category currently. Figure them out and you win a prize! One could be Mashburn, but I really can’t say either way. Jamal, if you’re out there, let me know.
No matter who is ultimately chosen as the new owner, today is a great day for New Orleanians. We can now say with certainty that we are officially on the path to having a new owner, to signing a new lease, and to ensuring the sustainability of professional basketball in New Orleans for years to come.
The group that is chosen to buy the team in the end will be leaps and bounds ahead of the former owner, George Shinn, and will enable the Hornets to take the next step forward in their quest for the elusive Larry O’Brien Trophy.
This is the full article that we talked about a few days ago. Meant to throw it up on the blog section earlier, but it slipped my mind somehow.
"Aime la vérité, mais pardonne à l'erreur." - François-Marie Arouet (Voltaire)
Not that I know first hand but I doubt the veracity of the characterizations of the Hornets and Saints corporate offices. I've actually heard as much negative feedback regarding the Hornets' customer relations as positive -- arguably more negative. Their marketing to the region leaves a lot to be desired. Not saying the Saints are anything amazing. The product sells itself. But I haven't heard a lot of people having negative dealings with them.
Regardless of who buys the team they'll forever play 2nd fiddle to the Saints.
** Referring to the comment in the OP about Benson buying the team.
Yeah, even with an NBA title and years, they are going to play second fiddle. But it sure would be nice to have.
Here's a thing to ponder.say it's not Chouest, or benson. Say it is dell, or Dunleavy, or both. Dell's local connection is a brother that went to Tulane and Dunleavy has a wife that's a local - but both are 'based' elsewhere. Would them owning the team, and having a lease, worry you? Or would a slight local connection plus a lease erase any fears about a conspiracy to move the team? I'd be fine with it, a lease is a lease, and I've never seen a place to go to without a building in Seattle. But I know some people are going to worry regardless
One thing that never sat right with me on the lease was the ability to cancel the lease if attendance benchmarks weren't reached. That I understand, what bothers me is that the benchmarks have to be reached right after football season and not at the end of the complete season. It seems that attendance for the entire season should be a benchmark for fan support. I wonder if new Orleans is the only city that has to deal with this or is it throughout the league.
It seems unfair to me.
Dell will outsource the team to India.
Also, the period of calculation involves 2 years going back from 1/31 to 2/1, so you get 2 halves of the season during football and 2 halves not during football.
Also, I have yet to see an analysis that says football matters to the attendance in any in-season way, though I've done one based on one season (so weak) and was told of another I trust that says the effect is small to non existant.
Glad to get some information on the ownership possibilities. We definitely need to get that underway quickly and hopefully this will infuse new life into the season.
I meant to post this yesterday, but an attorney friend of mine that works with a lawfirm close to one of the parties involved said to look for something to be annoumced shortly - as in the next few days or week. Now before you bash me, I did not say this was fact or going to happen. I am just relaying what someone closer to the situation told me. Maybe Joe or 42 could reach out to their sources to see if there is any more movement???
He also speculated the league might want to make a bigger splash announcing right at or during the All-Star Break. His source within the discussions says that Stern wants to shove a new owner and long-term lease announcement down the throat of every media a** out there that has asked him "when is New Orleans moving or folding"?.
Again, this guy isn't directly involved, but his rumor mill is a lot closer to the action than mine, so I'll post it. He is a huge fan though so I don;t think he would spread anything not actually happening.
He said that all parties understand the urgency to finalize everything - especially since the team is in a full nose-dive. He also said the State will probably announce a new lease at the same time. He said there MIGHT some hesitency for the State to announce anything without knowing who they will be dealing with as owner (chicken or egg dilema - his words).
Again, I am not saying anything we don't already know. It just gets my juices flowing knowing this MIGHT be over soon.
There certainly seems to be a lot more "chatter" out there lately, but nothng solid, and nobody seems to "know" who it will be. The same names keep popping up, and people seem equally confident of it being Chouest or Benson. Just a guess, but I think people close to both of them are saying "it's us" without knowing what the big guy(s) are actually doing. Haven't heard anybody talk about a 3rd party like Dunleavy's group since he was in town, which seems like years ago...
Hornets247 tweeted out on Feb 4 that we'd have a new owner by trade deadline. I have learned through this whole process that getting your hopes up is foolish, but where there's smoke.....
One thing to keep in mind with Kaman situation: Hornets WILL have an owner before trade deadline and that can give Demps more freedom
A cryin' shame. The best things are all happening in March, but I'll be all over the east coast for much of March.
Mass Effect 3, MLB 12, deadline dealings, All-Star weekend, potential owner?
Just hoe I don't miss all of it.
Here's what I think is relevant:
1) All the candidates for majority owners have begun the wrangling
2) My knowledge about how the minority owners are set up is less specific, but I would guess the `factions' are set, and have heard things that seem to confirm this
3) Stern said:
"No, the timeline is really set by discussions that we're having with the state and the exposition authority that runs the building because we need a lease extension and we need the certain approvals that cannot be given or made until probably March or April."
The legislative session starts 3/12.
The picture that I see being painted is there will be an informal selection of the ownership group in February, then lease will be signed, the the formal transfer will happen. Announcements and leaks will happen whenever.
This sequence of events and coarse timeline is reasonable, is consistent with less detailed information that has been out there for a while from well-respected sources (older statement, so less precise . . . not picking), and does allow the prospective owner to weigh in on some decisions before the trade deadline.
It would not surprise me if the owner was selected already, if it were to happen today, or any time during February. I've not heard anything that I can confirm to my satisfaction, but others have said that the ownership discussions are beyond the point of just shopping around the best offer to see who'll call or raise.
Things change. Everything could fall apart, could get interesting, could get held up in politics, whatever. We know that, but this is what I know as of, say, earlier this week.
What are the odds a lease gets signed by the state or is good enough for the NBA? The northern districts used to balk all the time at giving the Saints a dime and some of those leases were difficult to get through.
Last edited by all2neat; 02-10-2012 at 11:50 AM.
I think this will get passed. I'm guessing there will be increased payments and some Arena rennivation. There is always gum-flapping, but in the end, the Arena is a money-maker with the Hornets there relative to the alternative.
Am I the only one who just wants this junk to be over with?
If nothing happens once legislative session starts then we should be worried.its amazing how little reporting the times picayune has done on this subject. If it weren't for this website the ownership and lease issue would receive no attention when in actuality it is the only thing that matters I n regard to this team. The games are meaningless this yr
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