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Wednesday, December 8th, 2010 at 9:45 am  |  26 responses

Inside the New Orleans Hornets’ Financial Troubles

by Marcel Mutoni / @marcel_mutoni

The New Orleans Hornets may technically be property of the NBA now, but the League’s ultimate goal is to find a suitable buyer for the franchise, and soon. It will not be an easy task.

Saddled with a struggling local economy, leading to poor attendance, the Hornets are not in a good place financially. In fact, that may be putting it very lightly, according to documents obtained and published by Deadspin.

Below is a quick summary of the grim findings; make sure to read the entire thing for a clearer picture of the team’s cash woes:

Two things jump out, at least to this layman’s eyes: the team’s operating income, which in 2008 was a $6.4 million loss and in 2009 was a $5.9 million gain (slide 10), though that latter figures includes $3.4 million in revenue assistance from the NBA (slide 27); and the team’s net cash in operating activities, which represents the “measurement of money [owner George Shinn] is being asked to take out of his pocket to keep operations going,” according to sports economist Andrew Zimbalist. In 2008, that amount was $7.4 million; in 2009, $1.4 million (slide 12). Zimbalist points out that “things got much more problematic for the franchise” the following year.

Also of note: As of June 30, 2009, the partners’ deficit totaled $83 million (slide 13). The team’s share of national broadcast rights payments was $26 million in 2008 and $28 million in 2009 (slide 27). And in 2008, the Hornets were told they had received revenue-sharing money in error for the 2005-06 season — $2.8 million, by the looks of it (slide 27). The money was paid back in 2009.

The League says there’s no rush to sell the team, but looking at the finances, it’s not exactly an asset that moneyed buyers will be rushing out to bid on.

On the bright side: the New Orleans Hornets are good this year; shockingly good. Assuming they make it into the postseason, that valuable source of income should help the franchise’s bottom line, perhaps making it look good enough for a prospective buyer.

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  • http://www.google.com/news BETCATS

    I hope they dont move again. As mad as i was when they moved the first time the people of New Orleans deserve a team.

  • MikeC.

    If they do end up having to move due to lack of financial stability, can we start the “Seattle Hornets” movement here?

  • burnt_chicken

    I wonder if Jim Balsillie likes basketball…

  • http://phx13@verizon.net rob

    ha, they better make the playoffs. cuz they obviously might not even have the money to pay CP3 and if not, he’s gone and that franchise will crumble.

  • http://slamonline.com/ Ryne Nelson

    Here’s hoping NOLA goes far this year. Still, if/when the NBA finds a buyer, I think they’ll likely take the team to another (more profitable) city.

  • PapaBearATL

    If the people of NOLA ‘deserve’ a team, why aren’t they going to the games? I remember going to Hawks games post Dominique and wondering if the would recover. All the home games were blacked out and the it was still lots of empty seats.

  • AT33

    Move them to San Diego! Call them the Hombres!

  • http://www.slamonline.com BK Chris

    This just solidified the fact that CP3 is going to be a Knick!

  • All Day

    @ MikeC: The city of Seattle kept the Sonics name when OKC moved to Oklahoma, so any team that relocates to Seattle will be named the Seattle Sonics. I think Seattle is the best fit for the Hornets.

  • http://twitter.com/BeezKneezy LA Huey

    Balmer needs to build us a new arena in Seattle.

  • All Day

    The NBA had to step in and rescue the Hornets because D-Stern wasn’t going to allow an NBA owner to float checks on his watch!

  • JD

    Lets not all jump on the Seattle band wagon people, New Orleans deserves a team till at least 2014. And in answer papa bears Q maybe its becuase none have any money

  • http://www.twitter.com/TheDiesel Anton

    Las Vegas Hornets: the stinging feeling is not from the bees.

  • http://j@j.com j

    Couple things, I’m a Louisiana guy and i want the Hornets to stay in NOLA. Also, when you break down many of the financial troubles that the Hornets had, much of it was due to ongoing debt obligations incurred by Shinn, some which occurred before the team even moved. That’s bad financial management, not lack of attendance. The Hornets were profitable in 09 but it was irrelevant because of the debt that year.

    As for Seattle, I completely understand why that fan base wants to get a team, and with out troubles, I understand why they would target us. Still, the primary reason cited for why the Zombie Sonics left was the lack of a stadium. That issue still hasn’t been resolved, and given the current national financial climate I doubt the city of Seattle or the state of Washington is all that excited to build another stadium while still paying for the Seahawks and Mariners stadiums.

    Also Atlanta fans have absolutely NO BUSINESS talking about attendance issues in New Orleans. With a population that is at least twice the size of NOLA, they only average 50 more fans per game this year. Atlanta fans being second only to L.A. fans in their lack of interest in local sports teams.

    They also have all kinds of issues with their ownership. Still, does anyone ever talk about moving or contracting them? What about Philly, a team that has had attendance numbers even during recent playoff teams. Anyone talk of moving or contraction with them? Nope.

    New Orleans seems to get picked on alot for having the same problems that other cities have. And as for our attendance, it is going to go up as soo nas football season ends, like it always does.

  • http://www.triplejunearthed.com/dacre Dacre

    Why do New Orleans DESERVE a team again?? No one is going to games. If they DESERVE a team, let the city (and directly to that, an independant owner) step up and take ownership of said team.

  • TONEY BLARE

    Amazing how little play this has gotten: the BP Oil Spill fcked this deal, that’s where Chouest’s $ comes from: shipping in the service of the oil industry. Now that shit is thrown for a loop, his future is in limbo, can’t focus/risk on NBA/Hornets.

    Second, isn’t it also a great time for the NBA to be doing a bailout: what better card to play in the upcoming labor beef than this: the way things are structured (player contracts, guarunteed and max), a team like N.O. (with all the associated sympathy) can’t stay out of debt, i.e. the players fault.

    Somebody ought to try and look at big picture moves.

  • ClydeSays

    Teams are dependant on a fanbase to survive. As much as I love NO, if fans aren’t turning up for games, what’s the point? Seattle has a great fanbase, but they’d have to build a new stadium before that NBA would let them have another team…

  • TheTruth

    Yeah move them to seattle so they can have the exact same problem in 2 years.

  • PapaBearATL

    Move the Hornets to Las Vegas, Move the Clippers to Anaheim, it would be very cool to have a team in San Juan, PR. Other large markets, Las Vegas, Louisville, Albuquerque, Kansas City, Birmingham! Those are places that seem to support their teams rather D-League or Trip A sports teams.

  • Scottie Pimpin

    i would make a geat owner of a NBA basketball team. just putting my name out there in case anyone want to lend me a few millions.

  • http://theurbangriot.com The Nupe

    IF the Hornets don’t have the fan support (meaning people going to games) then they don’t ‘deserve’ a team. IF fans don’t support a new stadium AND show up for games in Seattle, then they don’t ‘deserve’ a team either. As much as I like Las Vegas, I’m not sure it’s a great place for a sports team, however I understand the appeal. Kansas City has been mentioned a few times as well, they have a football and baseball team, so rounding them out with basketball could be good too. Pittsburgh is another city I think should be considered. I hope that they find a way to stay in NOLA, even a team that doesn’t sell out every game has a huge financial impact to the local economy and moving the team should be the last resort situation. Maybe even taking a page out of Green Bay and ‘allow’ the city to purchase the team.

  • http://dodgers.com Joey E.

    Kansas City would be good. The Royals suck every year, and they dont get overwhelming attendance, but they do draw crowds. Same with the Chiefs. This season te Chiefs have been better than they have in a while, and they have an awesome crowd. Give them a semi decent NBA team, they’d draw. great sports town

  • rikson
  • mister8

    I have a question…
    If Seattle gets a team again, does that mean the Thunder can’t use their historic stats? I mean, when I watch the Thunder…they do quote Seattle stats, and history.

  • rikson

    If I remember correctly the deal was that both cities could use the sonics-hystorical stats…

  • Pingback: SLAM ONLINE | » Louisiana Government Working to Keep Hornets in Town

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