Below is a news summary by Cory Smith, an Entertainment Management student at Missouri State University.
(from Sports Business Journal, April 23, 2012)The NBA has struck a deal with business man Tom Benson to sell him the New Orleans Hornets. Benson currently owns the New Orleans Saints as well. The deal for the Hornets is for $338 million. The financial structure of Benson’s purchase of the team includes a $25 million down payment, which was wired by Benson to the NBA on April 13. He also is assuming $125 million in debt on the franchise and will pay the remaining $188 million at closing time. The deal is expected to be closed by early June.
The NBA, who broke even by selling the team, purchased the team on December 2010 for $318 million from former owner George Shinn. The Hornets posted an $18 million loss last year. The league was able to stop the bleeding by cutting the pay roll of players and greatly improving season-ticket sales. This improved from 6,000 to more than 10,000. During this season’s shortened schedule, the team is expected to break even.
Tom Benson is looking to make lots of improvements to the New Orleans Hornets starting with the arena. “A bill to provide $42 million for arena upgrades is working its way through Louisiana Legislature and should be approved in June,” said Doug Thornton, Senior Vice President of Stadiums and Arenas for SMG, the facility’s management firm. The state has already approved about eight million dollars to install new video screens and LED ribbon boards on the exterior of the arena. This work should be done by the end of this summer. There are plans to build new bunker suites. Benson also wants to improve the club level entrance to provide a better arrival experience for premium seat holders. A majority of the work is expected to be done after the next two seasons. Benson also has plans to change the team name.