Laurie is looking to lure the hornets - The Biz - basketball - Brief Article

Basketball Digest, Jan, 2002 by David Stone

WHILE IT HAD PREVIOUSLY appeared as though the Hornets would stay in Charlotte, the team looks to be headed out of town for good. The team is talking to public and private leaders in Louisville, the Hampton Roads, Va. area, and St. Louis after Hornets owner Ray Wooldridge said that the team had little chance of staying in Charlotte.

Louisville, which lost out to Memphis in its bid to attract the Grizzlies, appears to be the front-runner. The Hornets gave the city a January 1 deadline to submit a final proposal for an arena plan. While public opinion in Louisville appears to be mixed regarding a Hornets move, new University of Louisville coach Rick Pitino, concerned about losing fan and sponsorship support to an NBA team, has called for a public vote. With Pitino's hiring and renewed interest in the U of L basketball program, the school is resurrecting talks of building a new arena of its own.

Hampton Roads, which, like Louisville, is often mentioned as a potential site for a relocated or expansion NBA franchise, does not appear to be as strong a candidate as Louisville. In St. Louis, NHL Blues owner Bill Laurie, whose ill-fated attempt to buy the Grizzlies and move them out of Vancouver was met with outrage in Canada not a year before the team was sold to Michael Heisley and relocated, wants to bring the Hornets to the Blues' Savvis Center. While the 19,000-seat Savvis Center, with its 91 luxury suites, is the best existing option for the Hornets, St. Louis is the least likely new home for the Hornets. Laurie, who also had previously failed to purchase the Denver Nuggets, wants to buy the Hornets should they move to St. Louis, but current owners Wooldridge and George Shinn are not interested in selling.

In Houston, the Harris County-Houston Sports Authority had planned on selling $182 million in bonds in October in order to raise money for construction of a new Rockets arena. However, September's terrorist attacks threw the long-term bond market into confusion, and the Authority had to delay the sale because of market uncertainty. Generally, potential investors suddenly became more conservative, and the source of revenue that would repay the Authority's bonds--tourist taxes-became less certain as nationwide travel slowed.

In order to keep the project on schedule, and to allow work that has already started to continue, the Authority established a $25 million line of credit to bridge the gap until the bond sale takes place. The $25 million, from a number of lending institutions, is expected to cover construction and other costs through mid-2002, and the credit limit could be increased to $50 million if the bond market doesn't improve by then. The 18,500-seat arena is still on track to open in 2003.

Even before September, the Magic had backed off their request for the city of Orlando to build a largely publicly-funded arena to replace the TD Waterhouse Centre. After Orange County released a study that projected that the county would not have the hotel tax revenues it needed to pay for its share of the arena, the team settled for a short-term fix of renovating the facility--with a warning that it would be back asking for a new arena within the next 10 years.

The renovation plans include adding luxury suites closer to the floor and other amenities that will increase the team's revenues. The project could cost as much as $200 million nearly as much as the $250 million planned for a new arena--but county officials said that $75 to $100 million is a more likely figure. The Magic had previously offered to sign a 25-year lease in return for a new arena, but now will sign year-by-year leases at the TD Waterhouse Centre after the current lease expires in 2004.

The current single-entity ownership structure of the WNBA is similar to that of Major League Soccer, in that individual team "owners" operate their local franchises and invest in the league as a whole. Under the centralized ownership structure, revenues and expenses are shared among all teams. The NBA recently began to explore changing the WNBA's structure in order to give owners a direct equity investment in their teams, which would create an incentive to make each team more profitable. Those changes could take effect before the upcoming WNBA season, its sixth.