Hornets' revenue settlement offer goes before Oklahoma City city council
Friday, September 29th 2006, 10:29 pm
By: News On 6
OKLAHOMA CITY (AP) _ The Oklahoma City Council will consider next week whether to accept a $3.8 million settlement offer from the New Orleans Hornets as its share of the team's excess revenues from last season.
The total would cover $2.6 million in reimburseable expenses from the team's relocation from New Orleans and leave an additional $1.2 million in profit for the city and its investment partners, Hornets spokesman Michael Thompson said Friday.
The city and the Hornets had been in disagreement over the team's total revenue because the two used a different number of games in their calculations. The city excluded a Jan. 18 game against Memphis that was moved from Baton Rouge, La., to Oklahoma City less than two weeks in advance as well as two preseason games. The Hornets had included those three games.
The settlement offer is contained in an amendment to the team's temporary relocation agreement and will be voted on at the city council's Tuesday meeting. In an agenda item posted Friday, City Manager Jim Couch recommended approval by the council.
The Hornets have already signed off on the arrangement, provided the council does not make any further amendments.
``It's a win-win agreement for us the city, the state and the investor group that helped bring us here,'' Thompson said.
The amended agreement calls for any home playoff games from this season to be played in Oklahoma City as long as the Ford Center is available and for the city to make improvements to areas of the arena, including video boards and the home and visitor locker rooms.
``It's a lot of things that will make our players more comfortable in the locker room, things that will help them perform at a higher level and things that the Ford Center needs to do to maintain its pace with other arenas around the country,'' Thompson said.
It also sets a $40 million benchmark for next season to be based solely on the team's 35 Oklahoma City games. Any revenues above that level would be split with the city.
Already, the Hornets have sold more than 12,000 season tickets in Oklahoma City, exceeding last year's total. Single-game tickets go on sale to the general public on Saturday in both New Orleans and Oklahoma City.
The amended agreement also removes a requirement that the city pay for office space, employee housing and other relocation-related expenses for the Hornets and also eliminates a revenue guarantee split by the city, state and a group of investors.
The three groups had agreed to pay the Hornets up to $10 million if the team's revenue did not reach 105 percent of its 2004-05 total _ or approximately $40 million.
An option for a third year in Oklahoma City is included, noting that ``the Hornets currently intend to return to New Orleans following the completion of the 2006-07 season.''
``It's not something we think we'll have to execute. It's merely a contingency. Our goal is to return to New Orleans for 2007-08,'' Thompson said.
The agreement states that the Hornets could not relocate to another city other than New Orleans for 2007-08 ``unless otherwise directed by the NBA.''