Hornets face long road to profitability
NEW ORLEANS – It's another lost night at the end of the pro sports bread line. The video board in the New Orleans Arena flashes a face. It says the man's name is "Chuck" and "Chuck" appears to be the stadium announcer. "Welcommmmme to da Hive!" he shouts into his microphone.
His words bounce hollow off the arena walls. There are just 36 minutes until the start of a Wednesday-night New Orleans Hornets game, and there might be 300 people in the stands. This is not a good sign, two days after the NBA said it would relieve Hornets owner George Shinn of his massive basketball debt by relieving him of his basketball team. The sale might have avoided bankruptcy, but it can't hide the empty seats.
They won't come tonight in New Orleans even though the Hornets have won two-thirds of their games and the governor has been begging fans to show up if for nothing else than to prove the city is indeed major league. Less than an hour before the game, the arena's concourses are all but empty. No lines form at the Bee Wear souvenir stand or the River Bend Kitchen or Zatarain's Jambalaya Café, where heaping, steaming bowls cost $9 each. It looks like an airport long after the last flight has left.
Without fans, there is no commerce; the registers don't spit receipts with an electronic crackle. Later, a team public-relations executive will walk through the media seating holding a sheet of paper with the attendance "10,283" scrawled in ink, a dismal number in an arena that holds close to 19,000 and, more alarmingly, a sign that things might only be getting worse.
As one professional sports executive said recently: "If it's 11,000 or 12,000, I might believe the number, but when they say 10,000 it means the attendance is probably something smaller. No one wants to be in single digits. You don't want to be 9,999 – 10,001 sounds so much better."
New Orleans is in trouble as a basketball town. A team swimming in more than $100 million in debt often does not last long in its current city. And yet the Hornets are not wallowing alone in their losses.
"I think this is the tip of the iceberg as far as leagues taking over franchises," says Michael Cramer, who once ran the Texas Rangers and Dallas Stars and is now the director of the Texas Program in Sports and Media at the University of Texas.
Cramer, who has advised groups looking to buy sports teams, conservatively figures that two-thirds of NBA and NHL teams are available for purchase. Only there's no one to buy them. Who wants a team carrying tens of millions in debt?
The owners talk a lot about a broken economic model they say is their league. They are counting the days until the current labor deal ends after the 2011 season and then they expect to lock the players out. The phrase most associated with NBA commissioner David Stern's plans for the lockout is "to crush" the players by pushing the stoppage even past the point the players will cave. Eventually, the owners are said to believe, too many missed game checks will bring the players to their knees. And this is where they will be broken even more.
While salaries are high and it makes sense to find a system to bring costs down, the problem is not player costs. It has more to do with a fake economy propped up by an inflated borrowing market in which everybody overpaid for everything – homes, stadiums, sports teams – on the premise that the river of cash would forever flow.
This is how Shinn and the league came to think it was a good idea to come to New Orleans, a city that, even before Katrina, lacked the corporate support necessary to make a three-time-a-week commitment such as basketball work. It is how the NBA came to find itself in such places as Memphis and Oklahoma City, smaller metropolises which drew teams from far bigger places with the promise of the same public handouts everyone was getting all over sports.
As one source familiar with the Hornets situation said: "This was always a town that could support one team – and, this being the South, that is football."
When the economy collapsed, squeezing corporate budgets and ending new talks of public subsidies for sports teams, there was less money left to mine and the smaller markets suffered most.
While many business analysts looking at bloated leagues such as the NBA cry for contraction, destroying franchises is not an option. The league is holding the idea of contraction like an executioner's pistol against the heads of the players, trying to drive them into submission with the threat of removing teams.
But this won't happen. No commissioner – especially not Stern – wants to be known as the man who failed to protect the league so much that he had to blow up several of its franchises.
And without a buyer in Kansas City or a new arena in Seattle, the Hornets aren't going anywhere. They will struggle here, left to wonder how to get new fans and more free public money in a place where it seems neither can be found.
At the end of opulence.
