Wednesday, November 01, 2006

The future of the New Orleans Hornets – may indeed be in Oklahoma City

The 2006-07 National Basketball Association tipped off last night with a doubleheader in Miami and Los Angeles. Tonight is an even bigger night, with 13 games on tap, highlighted by an ESPN doubleheader. The New Orleans/Oklahoma City Hornets will be in Boston tonight for what will be emotional opening night following the death of Red Auerbach. The game in Boston is the Celtics home opener, Sunday night the Hornets play their first home opener, the first of six games they’ll play at the New Orleans Arena. Tuesday evening the game was far from being sold out. Tuesday night the Hornets played their second home opener, their first of 36 home games at Oklahoma City’s Ford Center. There are plenty of tickets available for that game as well. A year from now, if the plan goes according to forum, the Hornets will move back to New Orleans full time.

Again offering what is politically correct, NBA Commissioner David Stern offered a somewhat muted response when he was ask he considered it important New Orleans sells out their six home games.

“No. I’ve been on the job for too long and have been to too many non-sellouts; it’s not the indication of how well a team is doing. I’d be disappointed if they weren’t well-attended, but I think you can have well-attended games without selling the last seat in the house” commented Stern.

Hornets’ owner George Shinn may feel differently. Shinn is a man who has a reputation for moving an NBA franchise he owns.

The NBA awarded an expansion franchise to George Shinn in 1987. Tobacco Road, home to four of the greatest college basketball programs (North Carleton, Duke, NC State and Wake Forest are located within easy driving distance of Charlotte. The Hornets moved into a 24,000 seat arena, the largest in the NBA. The franchise imploded in the late 1990’s when Shinn was accused of rape.

As big as the Charlotte Coliseum was it lacked the amenities (luxury suites and club seating) arenas featured that where built early in the 1990’s featured. Shinn failed to rally public support to generate taxpayer dollars to build a new arena in Charlotte. Shinn moved the Hornets to New Orleans in May of 2002.

The Hornets managed to sell out most of their first season at the New Orleans Arena, averaging 15,650 or just over 91 percent capacity. In the Hornets second year in New Orleans attendance fell to 14,332 or 83.3 percent capacity. The Hornets average in year two was the second lowest average in the NBA during the 2003-04 season. A year later, 2004-05 the lowest average in the NBA 14,221. Bad enough the New Orleans Arena has one of the smallest seating capacities in the NBA, worst that the Hornets during the first three years of playing in the New Orleans Arena had the lowest attendance total in the NBA.

NBA Commissioner David Stern may be able to dismiss the obvious – selling out the six games the team is playing in New Orleans isn’t a big deal, but Shinn has to be concerned about the long-term viability of a sports franchise based in New Orleans still dealing with the terrible aftermath of the damage left by Hurricane Katrina

“It’s a job of some magnitude, but we’re still quite in the midst of it. I didn’t know that was true with respect to the Saints. With respect to us, we’ve gotten good initial receptions. We haven’t closed on anything significant, yet. But, we’re out there working and we’re optimistic that we will. I was impressed from a distance with the support that the fans were giving the Saints with respect to ticket sales, and I do know that it’s a little different for us because of when the Saints play their games, and the small number that they get to draw from a wide array of states that we don’t get to draw from with basketball for our 41 dates. But, we haven’t closed anything. But we’re optimistic.” Stern offered on the daunting challenge of selling corporate sponsorships in New Orleans.

At the start of the Hornets training camp (held in New Orleans) Shinn made a not so subtle suggestion to the New Orleans Times Picayune Big Easy Hornets fans would be well advised to support the team. Shinn said more than 13,000 tickets have been sold for the Nov. 5 opener against the Houston Rockets. So far, sales for the remaining five games, which includes the Los Angeles Lakers on March 23, are between 9,000 to 11,000.

"About three weeks ago, we had 7,000 tickets sold for the opener, and I was worried," Shinn said. "But I feel a little better now. With 5,000 tickets short of a sellout, that's a positive sign."

Hugh Weber, the Hornets' chief operations officer, said the team's goal remains to have all six games sold out in advance.

"A sellout two hours before tip-off has a different meaning than if it happens next week, so we're trying to get it done as early as possible," Weber said.

Top marketing executives from the NBA were in New Orleans again this week for meetings with local businesses to secure sponsorships for the 2007-08 season.

"This whole thing is a building process, and it's got to make sense from a business standpoint, and slowly but surely it's heading in that direction," Shinn said. "But we're not there, yet. So we need everybody to step up and embrace this team."

The Hornets played three home games in New Orleans last year, the first three sports events held in New Orleans after Hurricane Katrina.

"We had some very successful dates for the three games last year, and I think we're going to do the same thing this year," Shinn told The New Orleans Times Picayune. "Every time I hear something positive or good, it registers. Every time I hear something bad or negative, it registers. The result of those feelings, I form hunches and make decisions. My hunch now is that everything is going to work."

While the NBA may want Shinn to move the Hornets back to New Orleans full time next year, its no wonder why the man with the movable NBA franchise wants to keep the team in Oklahoma City. The Hornets had to sell season tickets literally overnight last year. The organization sold 11,500 total season tickets last year and finished the season ranked 11th in the 30-team league in average home attendance. (Remember the Hornets finished dead last the year before playing fulltime in New Orleans).

This year the Hornets are doing even better in terms of ticket sales in Oklahoma City. In early October, a month before the start of the NBA season, the Hornets had surpassed 12,000 season tickets. The Hornets sold out 18 of 36 games at the Ford Center last season and exceeded the capacity of 19,163 nine times, according to the Daily Oklahoman.

"We've been very blessed after going through the storm to have landed here in Oklahoma City," Hornets owner George Shinn told The Oklahoman. "The way we have been embraced and supported has been historic. I don't think anybody in the league would have expected us to do this."

"This year, we've had obviously not only an entire season but an entire off-season," director of corporate communications Michael Thompson told The Oklahoman. "I think people really responded to the quality of the entertainment that you find at a Hornets game. I think they were surprised at how much fun they had at an NBA game and they want more of it."

Thompson made it clear, the NBA has taken notice of the success the Hornets have enjoyed selling tickets in Oklahoma City.

"They're monitoring it very closely," Thompson said of NBA officials. "And they understand and recognize Oklahoma City's value to the NBA and Oklahoma City's value as a major-league sports market."

In early August, Stern made it clear, almost defiantly he fully expects the Hornets to be back in New Orleans full time at the start of the 2007-08 season.

"We ultimately decide where their games will be scheduled," Stern said. "The following years, our plans are for them to play 41 games in New Orleans."

Tough talk for Stern, but at the end of the day nearly empty in their meaning. If the Hornets do not sell out all six games, in Shinn’s mind that may be enough for the Hornets to never return to the Big Easy. If the Hornets aren’t well received by New Orleans corporate community, in Shinn’s mind that may be enough for the Hornets to never return to the Big Easy. Why would George Shinn want to return to a market where his NBA franchise had the lowest attendance average in the NBA? George Shinn is no one’s fool.

Everyone it seems is always trying to offer politically correct opinions when it has anything to do with a business based in New Orleans. If Shinn believes the market is no longer viable as a result of the aftermath of Hurricane Katrina, why should anyone force Shinn to keep his team in New Orleans?

Why and how David Stern believes he has the right to force an NBA team owner to move back to a market is an even bigger issue.

Al Davis successfully brought a suit against the National Football League, winning the right to move the Raiders from Oakland to Los Angeles in 1982. The National Football League lost its legal battle for the right to prevent member teams from moving from city to city on November 6, 1981.

The Supreme Court refused to hear the N.F.L.'s appeal from a lower court's ruling that the league's effort to block the Oakland Raiders from moving to Los Angeles in 1980 violated Federal antitrust law. After the owners of the league's 27 other teams had barred that move, the Raiders brought a successful antitrust suit against the N.F.L. in Federal District Court in Los Angeles. A jury agreed with the Raiders and the Los Angeles Memorial Coliseum, also a plaintiff in the suit, that the ''location agreement'' in the league's bylaws was a conspiracy among economic competitors to restrain trade, in violation of the Sherman Antitrust Act.

During his tenure as NFL commissioner Paul Tagliabue understood there was little if anything he could do if a team wanted to move from one market to another. The legal precedent had been established and there is no reason to expect if George Shinn wanted to keep the Hornets in Oklahoma City he legally couldn’t. David Stern may believe he’s the big bad wolf and the optics may not be right, but if George Shinn wants to keep the Hornets in Oklahoma City, that is where the franchise will be playing during the 2007-08 season.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: The New Orleans Times Picayune and The Daily Oklahoman

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