Louisville, Kansas City among the cities interested in the Hornets.
NBA IN LOUISVILLE?
Councilman Dan Johnson of District 21 in Louisville was upfront in his interest in the city obtaining an NBA team.
“It’s time for Louisville to be a major league city again,” Johnson said in a phone interview. “We supported [the Colonels] better than any NBA team was supported. We’d support another team better than any NBA team is supported.”
In order to assess the viability of Louisville as an NBA market, Councilman Johnson asked J. Bruce Miller, founder of Louisville-based J. Bruce Miller Law Group, to lead a study outlining the potential of the Louisville market. Upon request for more information, the Louisville Metro Council sent SLAMonline Miller’s 10-page report dated Dec. 12.
The report shows that beginning last April, Miller, a self-described long-time friend of NBA Commissioner David Stern, started gathering information which had been compiled in 2008, when the Louisville Metro Council quietly examined whether an NBA team could survive in the market.
By June, Miller determined there was an opportunity, with the University of Louisville basketball team moving into brand-new KFC Yum! Center and vacating Freedom Hall, which had served as the home of Louisville Cardinal basketball since its opening in 1956. A renovated Freedom Hall, with a basketball capacity of 18,865, could become a new home for an NBA franchise.
This information in-hand, Councilman Johnson placed a grant of $60,000 in the Louisville Metro Council’s 2010-11 budget for Miller to research potential investors for an NBA franchise. (Another $29,000 was included to ensure Miller could properly complete his report.)
Miller outlined his three primary goals: 1) to seek an investment group or an individual who had the appropriate amount of liquid wealth — defined as $1 billion or more — to serve as majority owner; 2) to hold private conversations with local and regional individuals to form a list of potential minority investors; 3) to hold private conversations with local and regional businesses who would consider sponsorship and advertising possibilities with a Louisville-based NBA franchise.
Miller also strove to dispute the belief that Louisville didn’t contain a large enough population, and enough monetary wealth within that population, to field an NBA team in a market containing the University of Louisville and University of Kentucky basketball teams.
The report states that Greater Louisville Inc. measured Louisville’s metropolitan area at 1.97 million people. Scarborough Research Institute reported the market has more than 1.2 million television households, which would rank 21st among current NBA cities. (The cities comprising the market include Covington, Lexington, Richmond, Frankfort, Bowling Green, Owensboro and, obviously, Louisville.)
The U.S. Metro Economic Report prepared for the U.S. Council of Mayors by Global Insight measured the Louisville market with an annual gross metropolitan product (total of goods and services provided) of $100.5 billion. The same report determined there were 1,030 companies with gross sales of more than $20 million annually and 50-plus employees. Miller found more potential in addition to those numbers.
He met with over 20 individuals who showed interest in possibly investing $500,000 to $1 million each into a Louisville-based NBA franchise. The report said local businesses claimed they would consider sponsorship and advertising, although no numbers were provided to quantify their interest.
When September rolled around, Miller began weighing the possibility of an NBA lockout starting July 1, 2011, due to the June 30, 2011 expiration of the current CBA between the NBA and the Player’s Association. He requested a discussion with Stern, which Stern obliged on the evening of Oct. 18. Although Miller wrote in the report that he wouldn’t discuss the content of their hour-long phone conversation, he called the talk “cordial, as always, constructive and direct.”
In the nearly two months following the conversation with Stern, Miller acknowledged he has had talks with the legal counsel of an NBA team’s ownership group. While Miller has also had talks with a West Coast-based American who could serve as a majority investor, as well as with a “well-known” international investor who maintains offices in New York City, his focus as of mid-December was on a group of major international investors.
That group indicated they were prepared to potentially sign a Letter of Intent (LOI), with the aim of owning a large majority interest in a NBA franchise in Louisville. The report states the LOI was in the process of being drafted and would be sent to the investment group after completion. Miller notified the Kentucky governor Steve Beshear as well as top-level NBA officials, including Stern, of the group, and reported that all are interested in meeting the investors. An e-mail request to Governor Beshear’s office to speak about its interest in the NBA went unanswered. Upon a SLAMonline request to speak about his interest in steering an NBA franchise to Louisville, Miller wrote in an e-mail message that a LOI has been sent to the international investment group, something Miller has already acknowledged publicly.
“Due to their travel with their various families [the LOI] has not been signed,” Miller wrote of the investment group. “When it is signed there will be no announcement or public discussion about them whatsoever, until after David Stern has the opportunity to meet them. After that, we will be guided by Mr. Stern’s desires concerning publicity.”
When pressed about whether residents in the Louisville area would balk at the NBA’s average non-premium ticket price of $48, Councilman Johnson pointed out that 20,000-plus watch Louisville and Kentucky play on a regular basis. (Yum! Center’s seating capacity is 22,000 while Rupp Arena in Lexington has a capacity of 23,000.) “This is the basketball center of the world, as far as we’re concerned,” Johnson said.
Johnson remained confident that plenty of sponsorships and advertising dollars would be doled out to an NBA franchise, and that the public wouldn’t mind paying for the upgrades necessary to Freedom Hall, if necessitated.
He finished his point by expressing the sort of confidence one would expect from someone trying to put his city back on the NBA map.
“I think Louisville is the number one place for an NBA team to be, and I think we need one,” Johnson emphasized.
KANSAS CITY VIES FOR NBA TEAM
Louisville isn’t the only fish in the NBA sea. Kansas City has been mentioned over and over through the years as a potential NBA destination. You might remember the Sacramento Kings once called K.C. home from 1976-85. Now, Kansas City mayor Mark Funkhouser wants back in the League.
“Of course, we would love to have it,” Funkhouser said of the opportunity to get an NBA team during a phone interview. “We 
have built one of the best arenas in the world — it’s NBA-ready. We would love to have an NBA team.”
The arena he speaks of is Sprint Center, a $276 million facility which opened in October 2007. It has a seating capacity of 19,000, 72 luxury suites and locker room facilities fit for the NBA. And Funkhouser is confident the arena is ready to host an NBA team without additional renovations.
“I think if the NBA came here and evaluated it, they would say it’s good to go, because that’s how we built it,” Funkhouser emphasized. “We built it with a plan to get an NBA team.”
Even though Funkhouser admitted the city hasn’t researched how the Thunder have integrated the team in Oklahoma City, a good comparison for Kansas City in terms of population, area wealth and regional support, he sees K.C. as wealthy enough to form a solid customer base.
He mentioned Leawood, Kans. as a wealthy city near Kansas City. The U.S. Census Bureau lists the median household income for Leawood in 2009 at $127,162, adjusted for inflation. Overland Park, Kans., home to Sprint Nextel Corporation, is another Kansas City suburb. It’s also home to Fortune 500 companies YRC Worldwide and Embarq, and the U.S. Census Bureau lists its 2009 median household income at $71,401. Then there’s Mission Hills, Kans.
Like Leawood and Overland Park, Mission Hills is located in Johnson County, which Funkhouser said was a county wealthy enough to support an NBA franchise. Mission Hills’ median household income in 2009 was $243,553, also courtesy of the U.S. Census Bureau. Johnson County’s population, updated for 2009, is listed at 525,108 by the U.S. Census Bureau. It’s tough to estimate how many of those people would regularly attend an NBA game, but Funkhouser was confident any potential NBA franchise wouldn’t have to worry about Kansas City and its surrounding communities being able to afford tickets. “We’re sitting in a circle of suburban communities where there is a lot of money,” Funkhouser said.
Still, Kansas City hasn’t made a formal pitch to the NBA, which makes Louisville look far more organized in their effort to secure an NBA team.
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