The NBA’s days as an owner of the New Orleans Hornets are drawing to a close. The league reached a tentative agreement early Friday morning with New Orleans Saints owner Tom Benson to buy the team for $338 million, according to a source with knowledge of the discussions.
The league chose Benson, who will be purchasing the team by himself, over a group of investors including businessman Raj Bhathal and former NBA head coach and general manager Mike Dunleavy, and former minority owner Gary Chouest, who had tried unsuccessfully to buy the team from majority owner George Shinn three years ago. The Bhathal group also included Larry Benson, Tom Benson’s younger brother.
The New Orleans Times Picayune first reported the sale to Tom Benson on its website this morning.
Benson would be allowed under the NFL’s rules to buy the Hornets. That sport prohibits cross ownership, the rule that prompted the Denver Nuggets’ former primary owner, Stan Kroenke, to transfer ownership of the Nuggets to his son, Josh, when Stan Kroenke obtained a majority ownership stake of the NFL’s St. Louis Rams.
Because the Saints and Hornets both play in New Orleans, the NFL would have no objection to Tom Benson’s purchase of the Hornets.
The Times-Picayunereported Thursday that Bhathal and Chouest met with league officials in New York on Monday. A source indicated that Tom Benson spoke with Stern on Monday, and the deal came together quickly after that discussion. Benson will have to pay approximately 10 percent of the purchase price immediately. The NBA’s Finance Committee is expected to approve the sale Friday morning before the Board of Governors meeting adjourns, with final approval on the sale expected later in the spring.
Various reports had indicated that the Bhathal group was the frontrunner to buy the team, with Dunleavy expected to take a significant role in basketball operations.
The NBA bought the Hornets from Shinn in December of 2010, for a reported was $318 million. NBA commissioner David Stern, according to a source, was determined to sell the team at a profit for owners who had been reluctant to approve the league as the Hornets’ owner. But Stern thought the NBA taking over at the time provided the best chance for the team to remain in New Orleans; Shinn was willing to sell to investors who would have moved the team.
Stern appointed executive Jac Sperling as the team’s chairman to seek out local investors, and work with the city and the state on a new long-term lease. Sperling also spearheaded the team’s drive to sell 10,000 season tickets at New Orleans Arena.
While the groups were being culled, Stern and the NBA received major criticism for their role in scuttling a potential deal of the Hornets’ star player, guard Chris Paul, to the Lakers in a three-team deal last December. At the time Stern said the potential trade, which would have brought several veteran players to New Orleans, wasn’t one that would help the Hornets in the long run.
Instead, the league approved a deal that sent Paul and two second-round picks to the Los Angeles Clippers for guard Eric Gordon, forward Al-Faroqu Aminu, center Chris Kaman and a 2012 first-round pick that originally came from Minnesota. Stern was taken to task by Cavaliers owner Dan Gilbert for not letting the league’s other owners have, in essence, veto power over the proposed Hornets deals.
The Hornets have gone through a brutal season. At 16-42, New Orleans has the worst record in the Western Conference and the third-worst record in the league behind Charlotte and Washington. But with the Timberwolves tailing off in the second half of the season and eliminated from the playoffs, the Hornets will have two lottery picks in June to fast-forward the rebuilding process.
While Tom Benson has not indicated what he will do with the Hornets’ management structure if he buys the team, it’s likely that there will be at least some changes in the organization. The Hornets have been run by team president Hugh Weber and general manager Dell Demps, who have had to get approval from the league on major transactions like the Paul deal.
Last month, the team and the state of Louisiana reached agreement on a long-term lease that will keep the Hornets in the state until at least 2024. Under terms of the agreement, the state has to approve $40 million in improvements to New Orleans Arena and the new owner of the team has to pledge to keep the team in town. The vote on the $40 million is expected to be taken up by the Louisiana legislature in June.
Benson bought the Saints in 1985, and after looking into potential moves of that team to another city, opted to keep the team in New Orleans after Hurricane Katrina in 2005. The Superdome, where the Saints play, was one of the first major buildings in the city to be renovated in the year after the hurricane, and the return of the Saints to town was viewed as a key marker in the city’s rebirth.
Benson has been involved in discussions with the league about buying the team for months, but his pursuit of the Hornets was delayed while he dealt with the fallout of the Saints’ “Bountygate,” the clandestine program run by former defensive coordinator Gregg Williams, who paid defensive players bounties for hits that knocked opposing players out of the game. The NFL spent almost three years investigating the program and finally was able to confirm its existence; last month, the league suspended Williams indefinitely, suspended coach Sean Payton for a year and suspended general manager Mickey Loomis for eight games. Assistant coach Joe Vitt was suspended for six games, and the NFL fined the Saints $500,000 and stripped them of future draft picks.