For those who are just commenting on the subject and did not read the article here is the most important part about where and why contraction should start:
Since the CBA debate is first and foremost about the money, the financial reasons for eliminating the worst-performing teams couldn't be more compelling. The leader in the clubhouse is New Orleans, and there simply is no close second. The team was taken over by the other 29 owners last December with $90 million from league reserves, a $70 million loan from outgoing owner George Shinn and undisclosed additional debt, according to the Sports Business Journal. (At 3 percent interest and a two-year repayment schedule, that means the league still owes Shinn about $50 million.)
Even before the league takeover, the Hornets were a bottomless pit of misallocated resources. According to the '09 statements, the Hornets' ownership group was carrying $111 million in long-term debt, including $73.8 million borrowed from the league credit facility. Of the latter amount, $22.7 million is due in June 2013 -- although previous maturity dates were renegotiated and extended because, obviously, Shinn and his partners were tapped out.
As of June 2009, the Hornets still owed $12.6 million of the $30 million relocation fee associated with the move from Charlotte; the initial annual payments were delayed three years. In 2007, the state of Louisiana -- the poorest in the nation, according to Money Magazine -- agreed to pay 20 percent of the remaining balance from the relocation fee. As of June 2009, the state had paid $2.5 million.
An inquiry to New Orleans Mayor Mitch Landrieu's office regarding any debt obligations held by the city associated with New Orleans Arena and the Hornets was referred to Deputy Mayor Andy Kopplin, who did not respond.
In 2009, the Hornets received $3.4 million in revenue assistance from the NBA, had a $3.9 million relocation payment deferred, collected $28.3 million in national broadcast rights fees and $9 million in local broadcast fees -- and had a $5.8 million operating profit nearly wiped out by the crushing debt and interest payments the team had incurred. This is no way to run a business, with no reason to think it would get better if the NBA were somehow able to sell the team for more than it paid Shinn and borrowed from him -- not to mention additional debt taken on by the league to close the sale.
Simply put, the Hornets are a financial mess owing tens of millions for loans taken out against the league credit facility and millions more to the league for re-location fees that were never paid off. The league in turn owes former owner George Shinn millions in order to buy him out of the league. Then the team is still tens of millions in debt to other creditors and has to pay employees and other overhead expenses just to stay afloat at a loss of profit.
This team is a financial disaster. It needs to be contracted.
Who the other team to be contracted should be is beyond me. I think obvious choices are Minnesota, Memphis, Charlotte, or Sacramento.
Minnesota and Sacramento have horrid arena deals and have had terrible management over the last decade. Memphis and Charlotte are located in the heart of NCAA basketball country where basketball allegiance is to Louisville, Kentucky, Memphis, and UNC, NC State, Duke, respectively. The attendance and average ticket pricing as well as general NBA success as franchises reflect this.
My guess is Charlotte is safe due to who owns the team and the respect that man carries within the league(Michael Jordan). The other three teams have shown that when successful they can probably be mildly profitable but horribly unprofitable when not successful.
I would therefore relocate Sacramento to Seattle or Vegas, leave Memphis where it is and see who the future success plays on establishing that team in that city and contract Minnesota since their arena deal is such a horror and that team will NEVER attract quality free agents due to it being SUCH a cold weather environment.