I’m multitasking this evening. On the plasma is basketball, first the Warriors and their furious 4th quarter comeback victory over New Orleans, and then Lakers-Suns. On one LCD monitor I’m watching the Microsoft/Steve Ballmer keynote address at CES. Some graphics are being put together on another screen for this post and a special project I’m working on. I’m watching my Twitter feed regularly, and I’ve got dinner in the oven.
Now, thanks to commenter Vince, I have to follow some new rumor about Larry Ellison’s interest in the NBA-owned Hornets. A blog entry by Forbes sports business guy Mike Ozanian indicates that Ellison could pursue the team with the intent to move it to San Jose. There’s a possible revenge/rivalry angle to the deal, as Ellison failed to buy the Warriors while the Lacob-Guber group put up the winning (and on-time) $450 million bid.
First off, let’s synopsize the Hornets’ situation. The team has struggled to get decent attendance in the post-Katrina era, despite having a decent team, a new arena, and a bona fide superstar in point guard Chris Paul. In three full seasons since returning from Oklahoma City, the team has averaged only 15,402 per game. This season, the Hornets average only 14,086 through 19 home games. Worse, the team has an out clause in its lease at New Orleans Arena in which it can leave the Crescent City if the team averages less than 14,213 during a 13-game stretch from December 1, 2010 through January 17, 2011. So far, the results aren’t inspiring if you want to keep the Hornets in town.

Someone may have to go out of pocket and buy 1,000 seats for each of the next two games to reach the target.
Hornets fans tend to respond to the schedule in a similar way to A’s fans do: show up for “event” games such as the Lakers matchup in the table above. Tonight’s crowd against a mediocre Warriors squad was a poor 13,532. Fans will have to average 15,428 over the next two games to reach the minimum 14,213 over the 13 games. Orlando should bring in a good crowd, Toronto most certainly won’t. Fans have gone as far as putting together 2-for-1 ticket deals to help get the count over the hump.
Last month I described the NBA’s purchase of the team from George Shinn an Expos-style deal. With the team bought for $310 million, the league and the other 29 owners stand to make a serious profit if the team does sell for $400 million or more. The league’s intent is to keep the team in the Crescent City, or at least that’s how it appears. Previous minority owner Gary Chouest was supposed to put together a group to buy the team, but his livelihood may have taken a hit after the BP Deepwater Horizon disaster. If a local buyer can’t be found – a process that probably won’t last more than a year – the Hornets will be up for grabs.
Ozanian’s piece puts the figure to move the Hornets to San Jose at $450 million, though that includes an unspecified amount of compensation to the Warriors for invading their 75-mile radius. The last NBA team to encroach upon another’s territory was the Clippers in 1984, who moved from San Diego after six ho-hum seasons at the Sports Arena. While the Lakers were not adversely affected by the constant cellar dwelling Clippers, there’s no guarantee that the Warriors won’t be affected by a second NBA team in the Bay Area. It would be a shock if Lacob-Guber didn’t level a sizable lawsuit at the league, trying to protect their near half-billion dollar investment. The NBA may have the most hard-nosed commissioner in pro sports in the form of David Stern, but he doesn’t have an leaguewide antitrust protection in his back pocket as Bud Selig does.
And Ellison won’t be the only interested party. The aforementioned Ballmer (whose keynote at CES was not exactly riveting) is Seattle’s Ellison, a man expected to bring the Sonics back to life. Unfortunately for Seattle, the lack of what Stern considers an NBA-quality arena in place is a considerable hurdle for the Emerald City. At this point, Seattle is just as hostile to new public sports venue financing as California is. Kansas City remains a town with an arena but without a white knight to bring a team in.
The upcoming labor situation in the NBA could be a determining factor in terms of when and to whom the team gets sold. Both sides are gearing up for a lockout, and if it proceeds like the one that shortened the 1999 season to 50 games, the timeline could be stretched out a few more months. The league could wait until a new CBA is ratified, as the Hornets could be more valuable with greater cost certainty ingrained in the new agreement. Then again, they could try to sell the team as quickly as possible, though this isn’t a league that is hurting for cash.
All of this leaves San Jose is a strange situation. With the specter of another redevelopment fund raid looming, San Jose has to pick and choose where it spends. The quest for baseball has spanned over five years in this attempt alone and there is still no light at the end of the tunnel. While the land investment for a ballpark would have greater potential (2+ million visitors per year vs. 750k for hoops), an investment in the arena and land for a Hornets practice facility may be a more prudent way to spend RDA funds. Even in better fiscal times, I can’t see San Jose having the resources available to attract both the Hornets and A’s simultaneously unless Ellison or SVSE footed the bill for all necessary HP Pavilion renovations and the practice facility (around 3 acres) as well.

The corners are vacant due to an older, less flexible seating configuration
As for the state of HP Pavilion, I’ve said before that it’s a good arena, but as it stands currently it wouldn’t be in the upper half of venues in the league. The seating bowl ends would need dual-rise seating tiers to maximize capacity and sightlines for basketball. The technology would also help change from hockey/arena football configuration to basketball more quickly. Yes, I said arena football, as the Sabercats are due to return to the AFL this March.
The biggest change may be in the area most fans don’t get to see. NBA standards don’t just include seats and suites, they include locker rooms and related amenities. The arena’s facilities are good, but they’ll have to be expanded just to accommodate an NBA team properly. While the Hornets won’t need everything listed in the plan below due to a degree of overlap, you get an idea how much space is required to house a team.

Note the size difference between the home and visitor locker rooms
It’s hard to say where and how an arena expansion could occur. It’s been 15 years since I was last in the bowels, covering the Warriors as a stringer while the team played its lone season at then San Jose Arena. I fondly remember one preseason game in which press row was placed in the hockey benches for some reason. Anyway, while there is some flex space at event level, it’s unclear whether that would be enough to make all of the necessary renovations.
In the long run, the biggest winner could be San Francisco and the Giants. If the Giants are intent upon building a new arena in SF, they’d be able to play Lacob-Guber and Ellison & Co. against each other in order to get a good deal for themselves, whatever that may be. Of course, by the time they’d get to make the deal they probably won’t have RDA to help with cheap or free land. You can’t win ’em all, I guess.
P.S. I would be remiss if I didn’t note how ironically bizarre it would be for the Ellison to send the Hornets to Oakland to play twice a season at the arena named after his company, while playing home games at the arena named after the company he just blew up publicly.
Also, Ellison has clarified (via the Merc’s Brandon Bailey) what his intent was with the Hornets:
“I did offer $350 million” for the New Orleans Hornets, Ellison told reporters, adding that he was “slightly outbid” by the National Basketball Association when the league bought the bankrupt team last month from owners George Shinn and Gary Chouest.
Ellison’s comments put a damper on the hope floated in a Forbes blog post that he planned to buy the team and move it to San Jose.
The prospect was warmly greeted by San Jose officials, intrigued with the notion of another pro franchise moving to the city, but Ellison flatly said the report was “not true.”
More grist for the mill.
P.P.S. An expansive article by the Merc’s John Woolfork about San Jose’s RDA just became available. The agency, which is the second largest in the state, pulls in $185 million in property tax receipts yearly.