Are the Hornets Going to Stay in New Orleans and the Kings in Sacramento?

I know New Orleans is on the clock. I thought a season ticket campaign that was was going well until Chris Paul got traded. But is New Orleans drawing well enough to keep the team?

And what of Sacramento? I know they need a new areana. Can't believe the taxpayers will pop for one given California's budget problems and the Maloof's are broke.

Financially, it makes a lot of sense for the NBA to contract the two teams. I wonder if that is where this is heading.

 

No purportedly "major league" will ever contract franchises.

The second they do, the franchise-appreciation bubble goes pop, and every team in the league loses half its value (or more).

The one overriding assumption any prospective franchise buyer operates upon is that the franchise is going to continue to exist.

 

They'll sell and move the teams, they have plenty of buyers in different markets.

I want to know if the Maloofs themselves are in financial trouble or if it's just a bunch of bad business loans that they can walk away from. If those douches are actually down on their luck enough that they'll have to get real jobs, that would go a long way toward proving the existence of God.

 

Louisville and (if they get the arena situation settled) Seattle.

 

IIRC from the Kings to the OC talk last year, the Maloofs are taking a bath on the Palms and other properties in Vegas. Biggest thing Kings fans in Sacramento have going for them is Kevin Johnson as mayor.

New Orleans? So much of its post-Katrina emotional currency is invested in the Saints, I don't think there's any left for the Hornets.

Is Kansas City on the waiting list too, or are they pining away for the Islanders?

 

The Maloof's only retained a small percentage of the Palms after foreclosure. They owe a bundle on the line of credit that

I don't think a league can confiscate a team. But the league paid 280M for the Hornets and presumably would pay fair market for the Kings.

The leverage the NBA has on the Maloof's is that they owe the league a lot of money on the collective credit line. While the NBA can not prohibit the move to Anaheim they can charge a relocation fee to the Maloof's. It is rumored that the Maloof's owe at least 125M to the league. If the league charged an additional 75M for the move along with the Maloof's needing to pay another 25M or so to get out of their financial commitments to the City of Sacramento it may be in the interest of the Maloof's to take the cash, especially in light of the brothers losing title to their casino.

And I don't remember the elimination of the Cleveland Barons causing the value of NHL franchises to plummet.

 

No, but that was also before the advent of cable, internet, satellite TV, NHLN, luxury boxes and the other perqs... different time, different place, different recession...

 

I still don't get that New Orleans got a second NBA franchise. The Jazz couldn't make a dent, even with Pistol Pete playing for them. I don't see any sport other then football getting traction in Louisiana. Not unless the Saints ever left and the basketball team is there to become a rallying point for the community. Don't see that happening.

 

The league would pay liquidation-level price for a contracting franchise, which would be far far below the price for any operating franchise.

The contraction/merger of the Barons did cause NHL franchise prices to drop. Mike Ilitch, who had been trying to buy the Red Wings for several seasons in the late 70s/early 80s, finally closed the deal in 1982 when prices dipped into his range. Several other franchises sold in the several seasons after the Barons contraction and the collapse/contraction of the WHA within a season went for depressed prices as the overall financial climate for pro hockey did not look real good. I believe the NHL lost its last national TV contract with CBS about 1980 as well.

Although games were picked up on ESPN, at the time ESPN paid chicken feed.

In any case any established league contracting franchises would experience catastrophic results in franchise valuation.

For marginal leagues on the verge of extinction anyway, i.e. the WNBA, they have nothing to lose, so if a franchise is bleeding money, might as well snuff it.

 

If you want to get technical, though, the Cleveland Barons were never really "eliminated."

The merger with Minnesota left the franchise dormant for a number of years, but eventually the merger was undone and the San Jose Sharks are basically a continuation/resumption of the Barons. Coincidentally, they're not far from where the franchise began life in 1961 as the San Francisco Seals of the Western Hockey League.