CNBC’s sports business reporter Daren Rovell has posted laundry list of why it is a bad idea for the NBA to have taken over ownership of the New Orleans Hornets.
David Stern says they plan to make a profit, but Rovell notes that right now the value of franchises is not rising and the lockout would make that worse.
Rovell notes that other leagues that have bought teams have lost money on the transaction. (Except for Major League Baseball, which bought the Montreal Expos with the express intent of auctioning them off to an owner who would move them. However the NBA says the goal is to keep the Hornets in New Orleans.) Right now there are no potential owners from New Orleans, or George Shinn would have sold to them.
If the Hornets have to be sold out of town, Stern has a problem on his hands.
Stern may go with the Seattle playbook here. Push for the state to help with arena and make financial concessions to keep the team and ask for the moon, When that doesn’t come through — it shouldn’t, Louisiana has more important things to spend money on — he can say there was not enough cooperation and there was no choice but to sell out of town.
But Seattle remains a PR disaster for the league, and now pulling out of New Orleans would be worse. So Stern is stuck trying to find someone to buy the team and keep them in one of the smallest and most economically depressed markets in the league. Good luck.
