Who will end up keeping the Hornets?

[Patrick]

nm

[sweetdaisy]

What does "nm" mean?

[Patrick]

No message.....just the poll!

[sweetdaisy]

Gotcha. Thank you.

[BricktownGuy]

99.9% OKC. Not being one sided, just seems to make the most business sense. In the end, its all about happiness and revenues, yep.. happiness and $$$$$.

[Patrick]

I'm doing my part.....I've scraped up every ticket I can get a hold of for the rest of the season. There wasn't much to choose from. That's good news for OKC.

I definitely plan on being more proactive next season about getting tickets earlier.

[Doug Loudenback]

Though it didn't please me to do so, I had to give NOLA the nod. But, who can say? Maybe I'll be pleasantly surprised ... of course, I'm not talking about next year - most everyone is expecting the Hornets here for that - I'm talking 2007-2008.

[Jack]

I think a lot of it depends on if NOLA is able to regain its population. The way things look right now, there are many people that will never be returning to New Orleans. The longer it takes to rebuild, the more people that will be starting new lives elsewhere.

Note it could take years for the Corps to build the appropriate levies NOLA needs to prevent a similar situation from occurring in the future.

Even though David Stern keeps saying he'd like to see the Hornets return, I don't think they'll be able to return.

I think they were smart in playing next season in Oklahoma City. They can watch the NO Saints and let them take the risk. If NOLA can't support the Saints, then that will give Shinn and Stern reason to keep the Hornets in OKC. If NOLA supports the Saints, then there might be just reason to return the Hornets to New Orleans.

Keep your eye on the Saints.

[Doug Loudenback]

Here's what is running in The Sporting News today: http://www.sportingnews.com/yourturn...ic.php?t=58082

No way Hornets return to New Orleans

January 31, 2006

Hornets owner George Shinn sounded on Monday like a man who has spent a lot of time poring over contracts and talking to lawyers. He told reporters: "They were asking for an unconditional guarantee. I can't forecast any acts of God or any other thing, so how can I guarantee something that I can't? I'm not God, I can't do that." "They" was the state of Louisiana, which was pressing Shinn for a guarantee that he would return the Hornets to the city of New Orleans in 2007-08, two seasons after their hurricane-induced departure. Fact is, in my opinion, there's virtually no chance of the Hornets returning to the Crescent City; Shinn has stumbled onto a basketball goldmine better known as Oklahoma City.

Thanks to the basketball-crazy fans in Oklahoma, the 22-22 Hornets are 11th in the NBA in attendance this season despite having the league's second-lowest payroll (only the Bobcats spend less). Chris Paul and Co. are drawing 17,667 fans per night (including a game in Baton Rouge where they failed to clear the 8,000 mark), which is more than 3,000 more fans -- per night -- than the Hornets drew last season in pre-Katrina New Orleans. Considering that the average cost of an NBA ticket is around $50, that's an additional nightly revenue of around $150,000 -- or additional seasonal revenue of over $6 million -- before even one of those fans buys a hot dog or a jersey.

George Shinn isn't a god, and he doesn't aspire to be. George Shinn is a businessman, plain and simple. In Oklahoma City, the Hornets promise to be a profit-creating machine. In New Orleans, even before Katrina, they were guaranteed to generate a loss. Shinn has more than enough money to pay a team of talented lawyers very well. Something tells me they'll be able to find a loophole that will allow the team to bail on its New Orleans stadium lease before its contractual escape clause in 2012. And something tells me this loophole will involve typical contractual language making exceptions for "acts of God."

The Hornets return to New Orleans? I'll believe it when I see it.

[Midtowner]

This topic is actually pretty interesting to me right now. We're covering remedies (what the non-breaching party gets in the event of a breach as is being discussed right now).

Just yesterday, some of my classmates and I were discussing the ten-million dollars. If I were representing Shinn, I think I could make a pretty good argument that the money was punitive and therefore, not enforceable. Parties to contracts are not allowed to contract for punitive 'damages' in the event of a breach.

On the other hand, NO would be able to make the argument that the ten-million dollars is "unliquidated damages" (which it's probably referred to that way in the contract itself). I can tell you that NO would probably be able to make a decent argument on all of the recognized elements of unliquidated damages, but as to how convincing that would be to a judge -- no comment.

Also, NO offered a lot of amenities to the Hornets -- they were given 2000 square feet at the Superdome at the charge of $1000/year, there were certain guarantees that the city would pay no less than $250,000 for NO's attendance, etc. In the event of a breach, all of those types of things (the fair market value of the office space) would be charged against the unliquidated damages IF the unliquidated damages clause held up in court which is questionable.

My views are pure speculation of course, but needless to say, the entire situation is interesting to me. There is a concept in contract law called an "efficient breach" stating that it's good public policy not to punish breaches when the breach is made in the favor of better profits just so long as the party who was breached against is put into a similar position as they would have been had the breach not occured.

I don't think that NO could pursue things like lost profits, lost revenue, etc. as all of that would be completely and purely speculative (and the law would place the burden on them to prove what was owed).

It'll be an interesting situation at any rate. I'm tuned in

[metro]

I think if anyone knew the true answer to this question, they'd be a millionaire, oh wait, the ones who will decide already are!

[SoonerBent]

Almost all games sold out in OKC. 7000 avgerage attendence in pre-Katrina NO. Where would your team be? I think the whole "We will return to NO" hype is just to not look like they're kicking NO when they're down.

SB

[Jack]

Actually to be fair, the inflated attendance numbers showed 14,000. Real attendance was around 9,000. Whomever they hired to keep track of attendance couldn't count. Graduate of LSU I suppose.

[upisgr8]

I have now completely reversed my thoughts and am now 99% sure that the Hornets will return to New Orleans after next year. This reversal of thoughts come after watching Stern on the NBA channel in his "State of the NBA address". Several questions including 1 from Berry Tramel and don't think there is any doub't short of another natural disaster that they will return to NOLA

[Doug Loudenback]

I have now completely reversed my thoughts and am now 99% sure that the Hornets will return to New Orleans after next year. This reversal of thoughts come after watching Stern on the NBA channel in his "State of the NBA address". Several questions including 1 from Berry Tramel and don't think there is any doub't short of another natural disaster that they will return to NOLA

I've already said that I think the Hornets will return to NOLA after next year.

My primary reasons for so concluding are (1) the contract that apparently holds them there (and I'm not wanting to get into a bunch of legalese discussion ... I've not studied it from that perspective and really doubt that such things would determine the practical outcome); (2) the negative impact on Stern & NBA if they didn't give NOLA a "chance" to make it right, to make up for where they did it "wrong" in the Hornets 3 years there, given the emotional arguments assoicated with "don't kick a guy when he's down and out" kind of thing.

That said, even if I've guessed correctly, that doesn't mean that the Hornets would be in NOLA for very long. The existing contract apparently obligates the Hornets to be in NOLA until 2012 (aside from legal issues, which I discount as being outcome determinatie). How long is that from now? 6 years, technically, but 5 years practically (since the Hornets will be in OKC next year for 1 of the 6).

The primary arguments that the NOLA faithful put forward are almost always (I use "almost" since I may have missed something in my ongoing reveiw) based on the contract and are NEVER based on the practical economic issues, or the sympathetic relationship between the Hornets and their Home City, which have been articulated as to why the Hornets would do well to stay put in OKC.

I've yet to see a NOLA argument (as to why the Hornets should return to NOLA) being based on ANYTHING other that legal entitlement, per the terms of the contract. By analogy, it's kind of like what some conservative Christians would like "marriage" to be like ... a "Covenant Marriage", really really hard to escape from.

In that perspective, that makes irrelevant (1) How well the Hornets have done or may yet do in Okc, and (2) How much better they off they would be if they stayed put here.

NOWHERE (and I look around quite a lot) have I EVER seen a NOLA faithful argument being posed in the context of, "We'll treat you right, just like or better than OKC has done." Such posts/arguments do not exist from the NOLA advocates.

So, while I think that the Horents will return to NOLA after next season, that doesn't mean that they will stay there at the time their legal obligations conclude there. Whether the Hornets (i.e., Shinn, Stern) will WANT the Hornets to remain in NOLA upon the expiration of the contract is a totally different question.

Probably, the answer to that question is in the hands of NOLA fans after next year ... who will have to do a hell of a lot more than they have done in the past ... any of the Hornets 3 years there ... unless NOLA does a remarkable turnaround about how they support the Hornets, the remaining few years in NOLA will be as unremarkable or as pathetic as they were in the 1st 3 years there.

And, at that time, unless OKC has either persuaded another NBA team to relocate here, or hasn't done anything so damn dumb as to insert an NHL team here, or ala Fallin's stupid stuff, a MLB team here ... and I'd rather wait for an NBA team, personally ... we'll probably get our NBA team at that time.

Patience is good. NHL and/or MLB is bad for Okc, IMO.

And, of course, there's a whole heck of a lot that will most probably occur in these waters between now and then, whenever it is that "then" is. Quite possibly, if not probably, one or more of those yet unforseen/unexpected events will have the capability of immediately changing the landscape.

This topic/subject is not one which will likely lend itself well for those who want quick answers. The "quick" answers dont' keep the Hornets in OKC, but the "long" answers may very well do that.

[upisgr8]

Well said Doug, I agree 100%.

[Jack]

If Shinn sells 100% of the team, are the new owners required to keep the terms of the contract? Afterall, they wouldn't have signed it.

[metro]

Jack would it have to even be 100% or just a majority share, perhaps 51%??

[Patrick]

Talked to most of the folks over at News 9. They told me there's no way in hell the Hornets are going to go back to NOLA, as long as Shinn owns them. He hates New Orleans.

[upisgr8]

Some facts :forwarded

New OrleansPopulation : (2004) 462,269 -4.6% changeLand Area : 180.6 square milesHousehold Income : $27,133 (2000)Average Home Value : $87,300 (2000)Murders (Per 100k) : 56.3 (2003)Rapes (Per 100k) : 43.9 (2003)

http://www.city-data.com/city/New-Or...Louisiana.html

Oklahoma CityPopulation : (2004) 528,024 +4.3% changeLand Area : 607 square miles(3rd largest in US)Household Income : $34,947 (2000)Average Home Value : $80,300 (2000)Murders (Per 100k) : 9.7 (2003)Rapes (Perk 100k) : 72.1 (2003)http://www.city-data.com/city/Oklaho...-Oklahoma.html

Its also cheaper to live in OKC. Which makes the money difference even larger. To live equally in New Orleans you would have to make $37,304 a year compared to $34,947 In OKC.

http://www.homefair.com/homefair/ser...00&ownrent=own.

Oklahoma City overal is a much better place to live. Yeah its got a dull reputation, but thats changing. Its gone though a lot of positive changes in the last 10 years.

[upisgr8]

Fishing is better than the Mardi Gras this year.

[Midtowner]

If Shinn sells 100% of the team, are the new owners required to keep the terms of the contract? Afterall, they wouldn't have signed it.

Of course they are. The contract is not with Shinn, it is with the Hornets organization. It doesn't matter who owns the company, the company is bound by the terms that it has agreed to.

The damages will be monetary if the contract is breached. As to how much? That's an interesting question. I read the contract a bit and it does have some unliquidated damages clauses, but I don't think they apply unless the Hornets get out some 5 years or so from now. If they quit now, calculating damages will be left to expert witnesses, etc. The damages awarded will not be punitive, but merely enough to put New Orleans in as good a position as it would have been had there been no breach.

The interesting thing about that is that the damages might be a lot less than you'd think. Especially if it was the case that keeping the Hornets in N.O. would actually cost the city money. While I'm not an expert on that kind of stuff, I'm sure that there are accountants and lawyers working on figuring out exactly what the cost to breach would be.

I think that determination will be more determinative than anything. This likely won't go to court. If the Hornets stay in OKC, I imagine that they'll end up paying N.O., (or more likely, we the taxpayers will raise bond money to pay N.O.) whatever their reasonable damages would be as determined by experts.

Or the commish could just force or forbid the move, in which case I'm not sure if there could be damages.

I skimmed the thing, but I didn't read it. Like Doug said, the terms of the contract probably won't have much to do with whether they stay in OKC or return to N.O.

[SoonerDave]

I don't think Stern could forbid the move per se, but he could "ensure" the Board of Governors thumbs it down. That's when he'd sell. But even that, I believe, would have to be approved, which I suspect would be more likely.

I believe the NBA in general is not too crazy about Shinn because of his previous move of the Hornets from Charlotte to New Orleans...

I still believe that Shinn wants to stay here, and is trying to posture a scenario in which it appears New Orleans has constructively breached the contract so he and Stern can have plausible deniability about their having been willing to stay in OKC. It then comes down to Stern deciding between public perception and Shinn's desire to make $$, and in that case I think PR will win and he'll force Shinn to go back to NO - at which point he'll sell the team.

-SoonerDave

[Midtowner]

Either that, or Shinn and his lawyers have some vague idea as to what a breach might cost them, and perhaps whatever that amount is would be considered an 'efficient breach' in their eyes.

Time will tell, but guessin' is still fun