Why the Hornets won't be the new Expos
by Brian Ball on Dec 7, 2010 8:00 AM CST
in Analysis
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PrintThe Expos are the only previous case of a major American sports league purchasing one of its teams*, so naturally many NBA analysts are comparing the NBA's purchase of the Hornets to the MLB's purchase of the Expos. And although there are some similarities between the Hornets' situation and the plight of the Expos circa 2000, the Hornets' period of NBA ownership will likely not become the abject disaster that the Expos' period of MLB ownership was. At worst, it will become a different kind of abject disaster.
For as Tolstoy might have said, each successful franchise is alike, but each failure is wretched in its own special way.
1) The Hornets will not be an orphaned, afterthought franchise.
The Expos were actually supposed to be contracted. After months of speculation, Major League Baseball owners met in Chicago on November 6, 2001, in which they voted 28-2 to contract the Expos and the Minnesota Twins. As this happened, John Henry's group, which previously owned the Marlins, bought the Boston Red Sox. To make the deal possible, John Henry sold the Marlins to Jeffrey Loria, the owner of the Expos, who in turn sold the Expos to Major League Baseball, in anticipation of contraction. However, the owners of the Metrodome in Minnesota won an injunction against Major League Baseball, requiring the Twins to play in the Metrodome in 2002. Baseball couldn't contract only one team, since that would have created an odd number of MLB teams and leave one idle on every day, making a 162-game schedule impossible in a 6-month time window. As a result, the MLB was stuck with the Expos and had to try to find a way to get a buyer.
The Hornets, however, are a viable, competitive, and valuable franchise. Their only problem is that George Shinn wanted out of the organization quickly, and that wasn't able to be done quickly enough for his desire and still keep the franchise in New Orleans. It's not a team, like the Expos, that were deemed to be of negative value to the league.
2) The Hornets organization will ensure that the team remans competitive
When Jeffrey Loria bought the Florida Marlins, he took more than his talents to South Beach – he took the Expos' front office, on-field staff, and even the manager. When the Expos tried to rebuild, they had no personnel, no scouting reports, and no office equipment. Loria even took all of the team's computers to Miami. Major League Baseball then installed an entirely new front office, one that was largely incompetent. The man running the show was Omar Minaya, soon to become yet another failed Mets GM. Minaya was just as incompetent in Montreal as he was later in New York, but nobody noticed because he was tanking the Expos, who nobody cared about. He made one of the most hilariously lopsided trades in recent MLB history, trading future all-stars Grady Sizemore, Brandon Phillips, and Cliff Lee for the fat and incompetent Bartolo Colón.
In 2003, the Montreal Expos were in the middle of a wild-card race when September 1 rolled around, usually the date that teams bring up 10 extra reserves to swell rosters to 35 players and give some much-needed rest to the core roster players after a grueling 5-month season. Though doing so would only cost the MLB $50,000, the League decreed that the Expos couldn't spend the money to bring the players up, effectively crushing the wild-card hopes of the Expos.
The Hornets have, at long last, a solid front office. GM Dell Demps has made solid transactions so far, Monty Williams has proved to be a promising young head coach, and President Hugh Weber somehow convinced both of these guys to come to a team without an owner, so he's clearly a great salesman. Their personnel, scouting reports, and computers are all secure in New Orleans.
In addition, there's no NBA analogue to the refusal of the MLB to bring up the reserves. Though the Hornets will likely head into free agency without an increase in their budget, we weren't anticipating that the Hornets would pay the luxury tax any time soon. As a result, it's likely that the Hornets, due to their strong organization and their already low payroll, will continue to remain a competitive NBA team while the Expos were relegated to punchlines.
3) Basketball is viable in New Orleans.
The Expos had nobody showing up to their games. They ranked dead last in attendance for four years before the purchase, and they were dead last in the three years after the purchase in which the Expos stayed in Montreal. Many years, they had half the attendance of the team with the second-lowest attendance. Baseball was not viable in Montreal.
In contrast, the Hornets are in the lower tier of NBA attendance, but are nowhere near the Expos' level of futility. For the last three years, the Kings, Nets, and 76ers all had lower attendance every single year, and nobody says that basketball isn't viable in Sacramento, New Jersey, or Philadelphia. The Hornets haven't finished in the bottom three in attendance over the past four years. While the Hornets aren't going to be a major-market team in New Orleans, they have the fan base to make them successful over the long haul.
In addition, the NBA supports basketball in New Orleans, and has shown a lot of confidence in the city. David Stern says that the League is stepping in to keep basketball in New Orleans as part of the League's commitment to the city post-Katrina. The MLB clearly wanted baseball out of Montreal, and Bud Selig always said that he wanted the Expos to be relocated (and even made the Expos play half of their home games in Puerto Rico in 2003).
4) Basketball is rising, baseball was falling
The Expos were a desperate team in a desperate sport. The juice that the McGwire-Sosa home-run-athon provided MLB had waned by 2001, and league-wide attendance was continuing to fall. Interest in the sport was waning, and baseball was having to confront the reality that it might have expanded too quickly. Many wondered if the talent in the league had been spread too thin.
The NBA is a league still on the rise. Attendance, revenues, and interest are all on the uptick, even in a terrible economy. Fundamentally, the league is sound, and there's more than enough talent to go around. As a result, the Hornets are a much more valuable franchise than the Expos were if only because they compete in a growing and vibrant League.
*The Phoenix Coyotes do not apply because the NHL is clearly not a major American sports league.
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Um
I’m pretty sure the Coyotes count. You should have just said you aren’t interested in hockey and therefore didn’t feel like doing the research.
http://hornetshype.com
Haha, that's true. I was just being flippant.
To be honest, I don’t know a thing about hockey. I really wasn’t aware that the Phoenix Coyotes existed until I heard about them yesterday. So I didn’t feel qualified to discuss the future of that franchise and just made a joke about it instead.
The Glass
Yeah, the Coyotes are really relevant. The NHL is run as if the owners were thugs, even under the guise of non-profit, but the Coyotes situation is very much a hybrid of the Hornets and Sonics situation.
In fact, if you just look now compared to just before the Hornets move from Charlotte, what you have is essentially a new team in New Orleans and OKC and a team missing (and missed) in Seattle. If the Hornets are contracted (unlikely), then essentially New Orleans financed the testing of the OKC market for the move from Seattle.
If they are moved to Seattle, then the scenario is the same, except we financed the testing of the market for an expansion team in OKC.
I’m ignoring the history of the businesses, but the occupancy of the sports market here, and I think that’s ok.
Back to the Coyotes: They left Winnipeg (as the Jets) and have a nice arena but bad ownership, brass. The league has tried for a while to correct the bad business and find local ownership, but the ownerships groups bids never meet the `standard’. Whether Ice Edge, etc. are low balling the NHL or the NHL is just doing that keep away thing that Ace did to Chris Chambers with Gordie’s Yankee’s hat he got from John Cusack, uhhh, Denny (Stand By Me), I don’t know. Remember, Eyeball Chambers, Chris’ brother was standing right there allowing this to happen, maybe even aiding and abetting.
Back to the Coyotes: Owners from all over the country have been salivating over the Coyotes, include Winnipeg. Owners from Toronto and Buffalo want it anywhere but Hamilton (between the two, CFL hall of fame, and where Stewart’s calculus texts come from, just like Cuban opposed the move to OKC.
There are tons of parallel and they have a deadline of New Year’s, basically, before the League opens up the bidding. This could change, as it has time and again. They’ve had their losses guaranteed by the City and everything, but they are looking to move.
I have a fear that no matter the bid we put in, it won’t be high enough. When I was young, I identified with Gordie, as we all were supposed to as viewers. Today I feel like him. Chris may not be our house back, but he’ll lead me to a dead body.
I think I just figured out my next journal . . .
Sorry for the digressions, but I can’t help it.
Otherwise
I like the points. Good article. And good job not buying the shallow research about the attendance and looking more deeply to see that the attendance here is actually fine compared to what the benchmarks really are.
Keeping the lease intact essentially provides a discount to owners who wish to keep the team local since breaking it will cost something, though not the full value as a deal will be cut to avoid the losses guaranteed in a lawsuit.
There are lessons to be learned from the Coyotes, Sonics, and Expos. Other examples may exist . . . oh, yeah, the Jazz. They guy created a team, ran up debt, and moved the team closer to his church.
Good article.
Fully agree. The biggest question, though, will be if any single investor can succeed in buying the team. Allegedly, Chouest already looked for local co-investors to join. Didn’t happen. Entergy, the Shaw Group, and CenturyLink are the only Fortune 500 companies running out of Louisiana. Not a lot of billionaires running around. Clearly, what needs to happen is some kind of ownership joint venture. How or when that might happen, though, is anyone’s guess.
I have several questions (and a few responding thoughts)
1) While this team isn’t negative value to the league, couldn’t it still be deemed substantially less valuable compared to more profitable suitors in other competing cities competing for this franchise?
2) I don’t see how having solid decisional personnel like Demps and the team’s head coach acts as a buffer against moving if/when a substantially more wealth-generating suitor comes along. What stopping role does that really play?
3) Sure the Hornets are thankfully structured under the luxury cap and seem more put together than the Montreal Expos, but I don’t see that as a sine qua non of preventing a move. While it could delay or contribute to an ultimate residencing of this franchise in New Orleans, I think that the fact that the franchise is (to the best of our knowledge) financially sound goes more to preventing implosion, rather than preventing a more lucrative third-party city from picking up the team to make the league even more money.
4) I don’t think you can say so confidently that basketball is viable in New Orleans (of course I [too] want it to be). This is where I think comparing the Expos point-by-point in such literal fashion, and concluding that the facts weigh in our side either because of a different situation or better facts, just isn’t accurate. The Nets are moving to Brooklyn so nobody’s worried about them. Philadelphia is the 6th most populous city in the US and nobody will think about moving them. In Sacramento the Maloof family is worth over $1 billion and they want to keep the team in Sacramento & are willing and financially able to ride out any shocks. New Orleans on the other hand, has no owner with the kind of wealth or potential owner with the kind of liquidity of the Maloof Group, and is the 53rd most populous city in the US, with the 2nd smallest NBA market after Memphis. I just think we need to wake up and smell the coffee that we are a small, financially disadvantaged market. This isn’t the end of the story, but I don’t think by comparing ourselves to the Montreal Expos, and lackluster attendance in counter-intuitively much more promising situations in other cities such as NJ/BRK, PHI, & SAC, that we can conclude that we’re doing okay in this category, because I think once you escape those comparisons and look at less context-dependent, more objective facts about the New Orleans population & NBA market, attendance & promise is one of our weakest points.
5) I’d like to hear more on how the NBA as a league is generally on the rise, and whether that translates to whether we too are on the rise. Because the implication I get from most reports is that while most others are doing great, we’re not. The NFL is making $$$ hand over fist, but Jacksonville is on the brink of contraction. What evidence is do we have out there that we’re doing better, because that’s what’ll matter to NBA ownership, not that the league as a whole is doing better & better and can buoy a team that could be generating more wealth for them. Any numbers on us?
by Grand Tanyon Sturtze on Dec 7, 2010 1:51 PM CST reply actions
Fantastic and intriguing points.
1) Absolutely, the New Orleans Hornets would likely be a more valuable franchise in Kansas City, and if Seattle had a suitable arena, they would be much more valuable in Seattle. I’m less certain about St. Louis, Chicago, or Anaheim. Nonetheless, if a prospective owner thought the Hornets would be more valuable in a different city, he just has to believe that the Hornets’ value in a different city exceeds the current price tag for the Hornets plus the relocation costs, and a move makes financial sense.
2) Demps doesn’t provide a buffer against moving – he provides a buffer against the team’s roster getting worse.
3) This point is the same as the second – the post was mainly arguing that the Hornets won’t become less competitive in the short run because of this move, not saying they’ll stay in New Orleans. I’m not sure they’ll stay in New Orleans at all, and their cap situation has no impact on the likelihood of relocation. Sorry, the post was kind of unclear about its purpose.
4) I think you’re making a really good point here. I’ve been reading a lot today about how the Hornets had maxed out all their lines of credit from the NBA and were, for all intents and purposes, broke. In the end, attendance doesn’t really matter, it’s all about revenue. The Hornets have poor attendance, but they have poor attendance mixed with low ticket sales and few sponsorships and limited luxury/suite seating in the New Orleans Arena. Plus, the TV deal with CST is terrible, so the team doesn’t get much revenue from that. I think my analysis was glib and my conclusion (basketball is viable in New Orleans) was presumptive. The more I think about it, the more the Hornets might have serious problems staying in New Orleans, since there are so many revenue constraints in the Crescent City.
5) Just as businesses in growing industries are more valuable than businesses in declining industries, the Hornets are more valuable in the NBA than they would be as a baseball team. Since the NBA is growing in popularity while MLB is declining, all teams are more valuable than they would be were they baseball teams.
Jacksonville is a different proposition altogether. The NFL is booming, Jacksonville is doing poorly. But relocating an NFL franchise is very difficult because stadiums that large are hard to come by. By contrast, many cities have an arena large enough to support an NBA team. That makes the Hornets, once again, more valuable, since they have more possibilities to be bought by potential owners. The availability of arenas, coupled with the growth of the NBA, makes contraction unlikely for the Hornets. However, it makes moving the team more likely.
Sketchy
The whole idea that the team is going to stay in New Orleans looks increasingly less likely to happen and there’s already reports that the league is looking into Kansas City as a new home. In all honesty, it’s a wide open deal. The league has the Hornets as their guinea pigs and are, essentially, able to do whatever they want in terms of whether they should move them, keep them in New Orleans or even use the deadly contraction rumor against the Hornets. Would any of you put it past David Stern to pull the “oh, well, we couldn’t find anybody to keep the team in New Orleans. Bye, Hornets.” I know that I don’t put anything past Stern and the way he does business. I’m sure what we’ll see is exactly what happened in Seattle, when Stern will sit with city council members, ask favors from them that simply aren’t financially realistic and then say he did all he could before shipping the team out.
In all honesty, I’m one of the few on here that has always just been a Hornets fan. I don’t cheer for any particular city because I’ve lived in two different cities my whole life. I was a Hornets fan in Charlotte, I was a Hornets fan in New Orleans, I was a Hornets fan in Oklahoma City, I’ll be a Hornets fan in Chicago, Kansas City or Las Vegas as well. But I don’t want Seattle because I’m not a Supersonics fan and I definitely don’t want contraction (and don’t see it as likely). But we’ll see if anyone in the state, aside from the few fans that the team has, really steps up and is vocal about wanting to keep the team there.
"You play to win the game."
I feel really weird about this
Since I have no connection to New Orleans whatsoever. Don’t get me wrong, I think it’s an awesome city and I would love to see the Hornets stay there. But I’m not from New Orleans, I’ve only visited there once, and it’s not the end of the world if they move for me. So this whole thing is kind of awkward for me.
Biased.
what a biased article. You don’t like hockey? well don’t bash it by calling it “clearly not a major sports league.” Baseball may have its problems but it is not a “desperate” sport. And the “fat and incompetent” Bartolo Colon only went 10-4 in his half-season with the Expos, and 3 years later won 21 games and the AL Cy Young Award. Please Mr Ball, be more objective and don’t let your biases run over an otherwise decent story.
by LeBaby is the King of Nothing on Dec 8, 2010 7:49 AM CST reply actions
Go back to Cleveland.
Also, hockey isn’t a major sports league. The major sports leagues are 1.NFL 2. MLB. 3. NBA in that order. Hockey and soccer are foriegn sports that america hasn’t accepted yet. I hope they do.
"I'm not a businessman, I'm a business, man" ~Jay-Z
"Life is such a roller coaster and then it drops, but what should I scream for this is my theme park" ~ 'Lil' Wayne
by OnPointLikeCP3 on Dec 8, 2010 5:24 PM CST up reply actions
Dude, it was a joke
Don’t worry, hockey is a thing. I just don’t know anything about the Phoenix Coyotes and wanted to be snarky.
Baseball isn’t a desperate sport, per se, but it certainly was in 2001. Contraction sounds desperate to me.
Also: Minaya traded Cliff Lee, Brandon Phillips, and Grady Sizemore, all of whom are All-Stars, one of whom is one of the better pitchers of our generation, for a half-season of Bartolo Colón, who went on to post a 1.32 WHIP and a 129 ERA+. Not bad, but Minaya gave away the farm for a half-season of an okay pitcher.
An exhibit for the CBA negotiations, maybe?
The players always say they want the owners to open their books and show their losing money. Is Stern just planning to use this as an example of how bad things are for the owners? Does he just see the Hornets as Exhibit A, the star witness at the CBA bargaining table?
Well I'm from New Orleans.
And if the League allows a second team to leave this city, I will never forgive the NBA. Ever.
Montreal
why hasn’t anyone here mentioned montreal as a possible relocation…after all we are comparing the hornets to the expos. as a side note the team logo is now a fleur de lis (french sign) to witch is on our provincial flag and seen allover, people in montreal root for the saints and are always seen wearing the hats. when you think about it montreal would be the best city to keep to the new orleans feeling as they are similar and both have french history. this year a preseason game was played in montreal at the bell centre and that game was sold out 23,00 seats and the crowd was into it and having a great time. we have the stadium, the biggest in the nhl and definitely the most intimidating. down the street lies a large piece of land that would have been labbat park the new home of the expos that would have been build in 95 had there been no lockout because THE EXPOS WOULD HAVE WON THE WORLD SERIES IN 94 , witch would have caused the new ball park to be build instead all the talent was sold of (pedro martinez) and so lauria eventually destroyed the expos as he had no interest in montreal or canada and didn’t give a damm. anyways new orleans actually has local businessmen who care they have a chance to keep it alive, unfortunately it docent look likely so instead of going to cities like Seattle and kansas city witch will fail, come to montreal and make it work. the name would have to be changed to something more french say the/les expos! as it would be a shame to waist the logo as it is and will be the best logo ever in the mlb and hands down the best mascot (youpi) witch thankfully was saved by the habs. to all the people in new orleans i know what its like to loose a team but you will eventually get another one. montreal wont ever get another shot.
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