New Orleans Hornets Sale Process Enters New Phase

By:
Published: January 20, 2012

Broad interest in franchise; Multiple bids with commitment to stay local.

Edit- As we strongly hinted in the article and confirmed in the comments and elsehwhere, the former GM and Coach is Mike Dunleavy sr.

New Orleans Arena sure would look a lot prettier if the Hornets had an owner

The first deadline has come and gone for potential Hornets owners to get involved in the purchasing process.   Interest in the franchise is very strong, which is not surprising given the team’s successful off-season on the business side.  Also, because the Hornets are now owned by the NBA, we can expect a much smoother sale process than the last time around under George Shinn.  Back then, issues around Shinn’s personal debts, cash flow, and estate planning added enormous complications.  In addition, the lack of a Collective Bargaining Agreement at the league level added uncertainty.

This week’s deadline was an early step, whereby bidders were asked to submit their formal indications of interest.  While not yet an end-game negotiation, it is still great news for Hornets fans to know that the process by which the Hornets will choose an owner has officially begun.

Equally encouraging is the breadth of interest.  Bidders from 2010 have re-emerged (most notably, Benson and Chouest) plus there is significant national money that has come forward, committed to keeping the team in New Orleans.  While Jamal Mashburn’s name has been previously mentioned, Hornets247 has also learned of another familiar NBA name that is assembling a group.  A former NBA player, this individual also has a couple decades of coaching and GM experience, providing an interesting twist to his group.

Breaking Down the Potential Categories of Ownership Groups

1.  Gary Chouest and company

Keeping the Momentum:  In terms of turnover and changes to day-to-day operations, there would  be fairly limited disruption within the organization, at least relative to a Benson purchase.  Given all of the recent momentum, this is a good thing.

Known Commodity:  We already saw the benefits of what Chouest brings as a minority owner in terms of his rolodex full of connections in Baton Rouge and in local industry.  Chouest had an enormous impact on sponsorship, luxury suite, and club seating sales throughout his previous tenure with the Hornets.

Local Owner:  Gary Chouest is a Louisiana guy and a basketball nut, which would mean there would be a very low chance the team would be moved at any point under his leadership.

Second Fiddle:  Chouest has made it quite clear that Edison Chouest Offshore is his most pressing priority in the business world.

Tight Purse-strings:  He is also not going to be a guy who is willing to lose lots of money for the chance at a title, which may be important since the new CBA did little to curb spending (and it’s only for six years…)

Requires a Partner:  In the past it has appeared that Chouest is unwilling to be the sole owner, or the public face of the franchise, so buying the Hornets will require coordination with at least one minority owner.  More people = more complications.
No National Connections on the Basketball Side:  Aside from his brief stint as minority owner, he has very little NBA experience or connections.

2. Tom Benson

Access to Financing:  Benson owns the Saints outright with virtually zero debt.  Considering the NFL just inked a new 10 year labor agreement and their television deal is astronomical, he pretty much owns a printing press. If the NBA required him to raise $300 million cash within the week, he would have bankers lining up to loan him the money.  This access to capital means that Benson would not need to take on minority ownership, which tends to complicate matters.

Building an Empire:   Benson is steadily building a real estate and media empire in New Orleans, having purchased fox 8 and being rumored to be interested in WWL radio.

Orderly Succession:  Benson’s succession plan appears to be in place, with a Board of Directors taking the reins of the Saints after he dies.  Owning the Hornets could presumably fit neatly under this structure and ensure continuity for the next few decades.

Customer Service and the Fan Experience:  While it may be tempting, at first blush, to consolidate a lot of the back office sales and support jobs of the Hornets and Saints in order to lower costs, this would be devastating to the Hornets ability to build on the success they’ve had forming relationships with fans and sponsors. The Saints have a 70,000 person waiting list not because they do a great job marketing or in their customer support offices, or because they put on a great game day presentation, it’s because they’re the freaking Saints, this is Louisiana, and everyone in ‘Merica loves football.  One great things the Hornets have going for them is a very dedicated and hardworking business office that understands the specific challenges facing the team and the experience of overcoming them. The Saints on the other hand have a long history of piss-poor customer support and general neglect of corporate sponsors. I’m convinced we will see a less fan-friendly Hornets franchise if Benson were to take over. People like to look past the Saints of the 1990’s- 2005, but they were a poorly run franchise with a depressed fan base.

Second Fiddle:  It’s hard to imagine Benson’s executives ever caring as much about the Hornets as they do the Saints. In my opinion it would in all likelihood permanently reduce them to second class status, since that’s what they would be in the minds of Benson executives.

 

3.  A National Group with Basketball Connections

At least one person in the mix is very familiar among NBA circles, and his name isn’t spelled “Mashburn.”  This person, confirmed to be leading a well capitalized group, has NBA experience and connections like nobody else whose name has even come up as a potential owner.

Edit- His name, as confirmed in the comments and elsewhere, is Mike Dunleavy sr.

NBA Connections:  The main organizer of this group was a player, head coach, GM, and has served in several other NBA roles throughout his 30 plus year basketball career. While not the primary “money man,” he brings a wealth of knowledge to any ownership group that nobody else in the current mix can even touch.

Commitment to New Orleans:  Encouragingly, this group, like all of the others, will keep the team in New Orleans.  The main investor has previous family ties to the region and intends to move here permanently.  He is also open to adding local investors to his group to round out the picture.

Continuity on the Basketball Side:  Despite his track-record as an executive, this potential part-owner would not plan to occupy either the role of coach or GM, leaving the power duo of Monty Williams and Dell Demps in place for the foreseeable future.
Not Local, At Least Yet.  There’s nobody in this group who is currently living here, at least so far.

4.  All of the Other Groups that We Don’t Know About

The NBA runs a good process and has cast a broad net.  At this point, we’ll take anybody, just to get this whole thing over with. That said, I believe there are four groups who fall into this category currently. Figure them out and you win a prize! One could be Mashburn, but I really can’t say either way. Jamal, if you’re out there, let me know.

No matter who is ultimately chosen as the new owner, today is a great day for New Orleanians. We can now say with certainty that we are officially on the path to having a new owner, to signing a new lease, and to ensuring the sustainability of professional basketball in New Orleans for years to come.

The group that is chosen to buy the team in the end will be leaps and bounds ahead of the former owner, George Shinn, and will enable the Hornets to take the next step forward in their quest for the elusive Larry O’Brien Trophy.

48 comments
Holyfield
Holyfield

I guess you idiots missed it when Dunleavy drafted eric gordon, blake griffin, and deandre jordan, came close to signing kobe, turned chris kaveman into an all-star, and came a quarter away from the western conference finals with the stingiest owner in all of sports. Not his fault Elton brand shipped off after an all-pro season and griffin and Shaun livingston started their careers with knee injuries.

ilk
ilk

Oh god, I hope the mystery man isn't Isiah Thomas. That could be disastrous. (Not sure whether President of Basketball Operations counts as "GM"; not sure what his NOLA ties would be).

D. Highmore
D. Highmore

If Mike Dunleavy ever has anything to do with the Hornets organisation, I will light myself on fire. The guy was even worse for the Clips than Elgin was, and that's saying something...

Billy Polcha
Billy Polcha

I am ruling out Elgin Baylor, Elgin is now 77 y/o & he recently sued the Clippers & the NBA

Billy Polcha
Billy Polcha

Joe said that the main investor has ties to Louisiana. Joe did not say that this ex-player, coach & GM had ties to Louisiana. This ex-player coach & GM is not the main investor. My guess is that it is either: Jerry West, Mike Dunleavy or Elgin Baylor.

QueenBee
QueenBee

You said this guy had 'previous' family ties to the area? Bill Russell? He's a native Louisianian. I doubt it's him though. Haha! Nahh. He was a player and a coach but I don't think he was ever a GM. Oh well. We'll find out soon enough I guess.

QueenBee
QueenBee

Oh I didn't see Jared from Subway had already said Bill Russell. My bad.

sweetpea
sweetpea

OK I"m at work and don't have time right now, but someone check to see if Jerry West has any kind of connection to NOLA or LA. Maybe family members have settled here?? Thanks for the info guys, this is a hell of a great way to start the week-end. Having the Hornets here for decades is the best sports news I've heard since the Saints SB win.

Paul
Paul

Anything but Tom Benson. Saints are already viewed as #1 in your region and him buying the Hornets would just worsen the gap between the two franchises.

J
J

Joe Dumars just kidding

bee dat
bee dat

jerry west? he have a connection to la?

J
J

Baylor was a great player but a vomitrous GM

J
J

Whoever is going to buy this teamis going to have to deal with the naming rights of the arena i like The Volvo Arena if they can get them for the naming rights.I want a compromise on this Keep the name but change the colors so we wont have any cry babies trippin about rebranding and a new Cable deal with Fox Sports SW.Dump Monty Williams and hire an offensive mind coach and keep Demps.I wonder how much it would cost to hire Phil Jackson? bazinga!!!

nikkoewan
nikkoewan

i'm sorry. Dump Monty Williams? Really? Why? Because our record is bad? Hmmm, i wonder why... Oh yeah, our roster sucks. That's just a fact of life. Plus we dealt with a lot of injuries to our most important players. It's not like we're deep like the Spurs or the Hawks. We're the freaking CP3-less Hornets.. Facts: Even as crappy as our roster and without our best player, our efficiency differential and point differential indicate us to be the 23rd best team in the league. Without Gordon, our team is a bottom dweller. Let's way on judging Monty until next season, when he's had a fully training camp in place, and a healthy roster.

Jason Calmes
Jason Calmes

J . . . Alot of what you said here is fanciful and optimistic if out of left field, but Phil Jackson hates this place and will never come. He's got more than enough money to worry about working for a bunch of people he hates (us) and enough ring to have nothing left to prove and no reason to tarnish them. He won his last game here. I think that's punishment enough for him.

J
J

I was joking about Phil being here

Jason Calmes
Jason Calmes

Oh, tank da lawd! Was going to send you to funny farm...

bee dat
bee dat

please please, not elgin baylor, the last thing we want is to become the clips of the south!

Joe Gerrity
Joe Gerrity

Nobody's said the right name yet, FYI. Former player, coach, and GM. Used to serve a role or two for a team we traded with not too long ago.

HornetsFanSince92
HornetsFanSince92

The two names that popped into my head were Magic Johnson and Jerry West. Given magic hasn't been a GM it must be Jerry. I'm not American so may be off the mark but from what I've seen of Jerey West is that he LOVES basketball and knows how to build a winner!

QueenBee
QueenBee

If we had mentioned the right name would you tell us? LOL!

Everett
Everett

Good reporting! Thanks dude.

pschafer
pschafer

Ex-Duke player Brian Davis? He put together a group that tried to buy the Grizzlies a few years back, together with Christian Laettner. This is just a wild guess, probably wrong.

bee dat
bee dat

This post is timely for a concern I've been having recently. As much as I want to believe david stern about all this, ask the people of seattle if he's always trustworthy. I'm wondering about : ** attendance benchmark ** I remember there being one for this season. Have we forgotten about it because of the lockout or because of the big 10000 or am I remembering incorrectly. If it does exist is anyone keeping close count of the numbers, they seem super-low despite the 10000, noone is walking up to see this team. Are we being hoodwinked into believing we'll have local ownership, placated to the point where we're not meeting benchmarks to keep the team here a couple more years. It would be a lot easier for one of these mystery owners to buy the team and move it if we fell asleep on the benchmark and they could break the lease immediately instead of waiting a couple years, some who want franchises may not be that patient. to my point is Larry ellison the mystery buyer? I'm quite sure he let his intentions known that he wants the team (of course he wants them in san jose) and he can and will outbid anyone if he can take them there. Anyone with any info please share. and thanks for the information joe, this is the kind of article I come to this site hoping to read. I am an optimist too and want very much to believe this. (I'm a little concerned I haven't been chouest in his seats this year, he's my primary hope). There is just that cynical side that can't help wondering if we're being buttered up only to be wolfed down.

Jason Calmes
Jason Calmes

We haven't forgotten. It's just not a worry. Here's the data: We are concerned with a 2 year average from the end of January to the end of January. 2011-12: 8 games with 14,209 average 2010-11: 41 games with 14,709 average 2009-2011: 20 games with at least 15,130 The reason I say at least for that season is that all i can quickly see is the season average. I think we can all agree that attendance goes up as the year goes on, so I counted that as a minimum. I could be wrong. Playoffs and preseason don't count. All this boils down to 14,773 average. Plus, I know ESPN's numbers are slightly less than official since the number is sent in around halftime and there are always a straggler or two. Those don't seem to matter, but it bumps the average up about 10, but let's just keep that in our pocket for now. Now, we have 4 home games left: Mavs on a Saturday, San An on a Monday, Orlando on a Friday, and the Hawks on a Sunday. Final piece of data, we need average at least 14,735. So, we need the last 4 games to fail to average 14,040 to allow the clause to be engaged. (I've decided to make this a small post, by the way). This is below the season average so far. So the answer is that you should be worried about the benchmark to the extent that you think the slate of games I just presented to you will average less than the 8 games so far, 4 of which were weekday games against non-classic teams . . . so not Boston. If Orlando draws 16,000, the average for the other 3 is troubling if it drop much below 13,400. At 17,000, discomfort begins at 13,100. So, how do you feel?

bee dat
bee dat

its always comforting to think someone else might be on the case, hope that it's true in this case!

bee dat
bee dat

uncomfortable, not sure why the timespic or anyone else has been throwing this around, I think attendance may hit a dip on account of our record, while the numbers from earlier in the season reflect excitement about what might be, near future numbers are more likely to reflect what the team is, near unwatchable except for hardcore fans and bball junkies. thanks for the numbers, and the vote of confidence. hopefully you're right and superman will fly in to save the day with some big numbers

Jason Calmes
Jason Calmes

I think ALL of the games will exceed that target. If we were done with home games today, we'd be ok. If you see 14k+, just know that no damage is being done, so we're still ok. Also, sponsors are on this. It's more than just goofuses like me and you driving this bus. If it were just us, we'd already be to Wally World, right?

bee dat
bee dat

the picture appears to me like derek harper. of course he fits none of that description. Reed has local ties and a long career but his coaching and gm years could hardly be called successful

r-dub
r-dub

Could #3 be Willis Reed?

Patrick Clay
Patrick Clay

He was on the Hornets' executive staff before...

J
J

Where you getting this info from is this true?

edbballin504
edbballin504

I see a picture of Elden Campbell in the top banner. Could be he the mystery guy from #3??

QueenBee
QueenBee

Willis Reed fits that profile though.

QueenBee
QueenBee

Campbell hasn't been a head coach or GM has he?

edbballin504
edbballin504

You are right and maybe it is Reed...IDK. I wish they'd just tell us.

QueenBee
QueenBee

I don't think he's had a 30 year BBall career either. LOL.

edbballin504
edbballin504

Good info! But can you tell us who you are talking about in #3???

Trackbacks

  1. [...] Mike Dunleavy senior (who I identified as someone who has taken the first concrete step toward potential ownership) was in attendance [...]