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Old 02-19-2012, 07:16 AM   #1 (permalink)
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Default Paul Allen, David Stern and the Seattle Sonics

On Thursday, billionaire Paul Allen, who owns the NBA’s Portland Trail Blazers and the Seattle Seahawks of the NFL, wrote basketball commissioner David Stern a love note when he released a statement essentially saying he would support an NBA team in Seattle provided the economics of a new building for the team made sense.

Stern needs to sell the New Orleans Hornets,who were purchased by the league in December, 2010 for $310 million and have lost $8.6 million (before debt service and depreciation) the past two seasons. The Hornets have suffered for years from a lack of corporate sponsors, a lousy television deal and attendance that is typically in the bottom-third of the league. Their lease at New Orleans Arena expires in 2014.

It was thought that the new collective bargaining agreement, with its lower salary cap, might spur interest in a buyer for the Hornets. It hasn’t. Worse, the Hornets lost their best player, Chris Paul, to the Los Angeles Clippers prior to the start of this season and the team continues to struggle to sell tickets. Meanwhile, the league’s 29 other owners continue to make welfare payments to the Hornets. That’s hard to swallow for teams like the Charlotte Bobcats and Indiana Pacers who are running bigger losses than the Hornets.

Thirteen months ago, shortly after an investment group led by Peter Guber and Joseph Lacob bought the Golden State Warriors for $450 million, I wrote that billionaire Larry Ellison, who tried to buy the Warriors, might buy the Hornets and move them to San Jose. That market belongs to the Warriors, so an owner moving a team there would have to pay between $100 million to $150 million to Golden State’s owners.

Not so with Seattle. The NBA voted in 2008 to allow the city’s previous franchise to move to Oklahoma City because KeyArena did not supply the SuperSonics with enough revenue. But the television market is much more lucrative in Seattle than New Orleans, as evidenced by the rich tv deal the Mariners have. With a new building a team in Seattle would generate more revenue than one in New Orleans could ever dream of.

Stern has said he doesn’t want the Hornets to move. But the Hornets are 7-23 and in last place in the Western Conference Southwest division, and the team ranks 27th out of the league’s 30 teams in attendance. Stern should return Allen’s note with a kiss.
Paul Allen Writes David Stern A Love Note - Forbes

Last edited by shenmui; 02-19-2012 at 08:02 AM.
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