Whither the Hornets?
On my birthday I woke up to news that the NBA and players had reached a tentative agreement to play the 2011-12 season. 20% of the regular season will be lost as teams will be forced to play a truncated, 66-game, 120 day season ending in late April. I thought this was a good opportunity to radically change the NBA schedule, which runs from Halloween to Easter with playoffs through the first week of June, to a pushed back schedule of Christmas to Memorial Day and playoffs until late July or even early August, commonly known as the dog days of summer. Oh well, they didn’t make such a change so we’re “blessed” with a rapid fire schedule with numerous back-to-back-to-back game sets. It will surely be brutal to the finish.
It’s also brutal seeing what’s happening to the New Orleans Hornets. GM Dell Demps had a deal to send superstar point guard Chris Paul to the Lakers, who would send Lamar Odom back to the Hornets and Pau Gasol to the Rockets, who would then send a bevy of players including Luis Scola and Kevin Martin to New Orleans. It seemed a fair trade last week and was assumed to be a done deal until Commissioner David Stern stepped in and killed it, citing the now infamous “basketball reasons”. An attempt to revive the deal with additional parts was also rejected, as were two attempts by the other LA team, the Clippers. The Hornets, which are owned by the league and the other 29 team owners, are completely handcuffed when it comes to making player moves and will surely field an awful team this year, whether they trade Paul by Christmas or not. The reasons for doing this are rather divergent. Cavs owner Dan Gilbert complained about not getting a piece of the Lakers’ luxury tax payment. Mavs owner Mark Cuban thought it was unfair to “take advantage” of a small market team. There were plenty of whispers that Stern wanted to stick it to superagency CAA and make Paul an example that the players can’t just dictate where they wanted to go, though that’s not what Paul was doing in this case. Supposedly Paul is being kept on the roster simply to raise the team’s attractiveness for potential buyers, even though it’s unlikely that Paul will stick around when he becomes a free agent in the summer.
A year has passed since the NBA bought the Hornets from two-time owner failure George Shinn, and there is no sign of a local buyer that could come in to rescue the team, despite the fact that the team reached its season ticket and attendance goals last year. There are a few prominent locals who could be positioned to be minority owners, but that’s not going to be enough. The NBA seems to have raised its bar to prevent undercapitalized groups from buying, such as Atlanta Hawks’ failed buyer Alex Meruelo. For the NBA to sign off on a new owner for the Hornets, the buyer will have to A) be willing to overpay for a franchise in the Big Easy, perhaps as much as $400 million, and B) be willing to absorb losses or deal with razor-thin margins in the market. It’s no wonder, then, that the Hornets are a prime relocation or contraction target.
Continuing to own the Hornets is a terrible conflict of interest for the NBA, which can’t operate the team normally while it tries to maximize value for a sale. On one hand, it wats to retain Paul as a key asset even though it’s clear he’s skipping town. On the other hand, it doesn’t want to saddle the team with a bunch of long-term contracts (read: talent) that would make the team less attractive for buyers. It’s a bad spot to be in, and it makes me scared that the league will simply throw its hands in the air and give up. I hope that’s not what happens, since there are options they can pursue:
- Sell the team to Larry Ellison if he’s still interested. Ellison would obviously move the team to San Jose. I wrote in January that moving a team to San Jose, as much as Warriors owners Joe Lacob and Peter Guber would rail against it, could advance talks in San Francisco for an arena there, since it’s likely that an arena deal in SF couldn’t be completed for either the W’s or relocated Hornets until after the 2016-17 season. Neither San Jose nor Oakland would like it much, but the NBA would at least know there’s some cushion there. Ellison is wrapped up in the America’s Cup project, so it’s unclear if he still has interest in the Hornets. If he paid $450 million, as Lacob-Guber did for the Warriors, the NBA probably wouldn’t blink twice and would back up the moving vans for him. The problem is that last year Ellison offered $350 million for the Hornets, so why would he pay $100 million more a year later for an arguably devalued franchise? If he paid that $350 million for the franchise, and the remaining $100 million went to Lacob/Guber so that they could terminate the lease at Oracle Arena and jumpstart the process in SF, that might just work.
- Find a Seattle-based buyer and move the team to the Emerald City. Stern played hardball with Seattle as the Sonics were on their way out of town, so it isn’t likely that he or the owners would approve such a move until an arena deal were in place. Any publicly financed arena deal up there is every bit as dead a possibility as one in the Bay Area. It’s also unclear who would surface as a potential owner.
- Move the team to a place with a new arena, such as Kansas City or Louisville. Neither market is particularly rich so it’s at best a lateral move. Both markets have new arenas, with Louisville an arguably better hoops market. Like Seattle, it’s unclear who would surface as buyer. The Kansas City option revives the possibility of the shouldn’t-be-revisited Kansas City-Omaha dual-city franchise since Omaha also has a relatively new arena. Forget I mentioned it.
This is not how David Stern wanted to wind down his career. A labor stoppage is forgivable among hardcore basketball fans, of which there are many and I am one. There are enough stars to propel the league forward. The Hornets debacle is a different story. It’s a complete clusterfuck, and it will be expensive for the league to extricate itself from the mess. The only question is who is going to pay. Does the NBA give up on the NOLA market, a terrible PR move, then stick the buyer with the tab? Does it fold the team and give the money back to the other owners? That itself is an even worse admission of failure, given that none of the four leagues have contracted teams in the last three decades. Figuring all of this out is well above my paygrade and is why Stern has been at the helm for three decades. It’s a no-win situation for him, and for that, I don’t envy him one bit.