Bobcats partners may lose millions
With attendance in a slump, the team may lose $35 million over the next two years.
By Rick Bonnell
rbonnell@charlotteobserver.com
Tuesday, Apr. 14, 2009

Bobcats fans take part in a giveaway during a break in a game in Time Warner Cable Arena. The team faces a rough economy and tepid fan interest. According to a home-attendance comparison at ESPN.com, the Bobcats are 26th among 30 NBA teams, averaging 14,526 fans. Only Minnesota, Indiana, Memphis and Sacramento trail the Bobcats in home attendance this season.




Partners in the Charlotte Bobcats have been told to expect roughly $35 million in cash losses over the next two years, people familiar with the situation told the Observer.

Those sources said majority owner Bob Johnson recently requested about $28 million in a cash call from his partners, and was generally turned down by the group.

As the Bobcats conclude their fifth season tonight in Orlando, they finish the season with their best record (currently 35-46), but have yet to reach the playoffs.

Michael Thompson, Bobcats director of corporate communications, said the team doesn't comment publicly “on the specifics of our financial situation.”

Despite the losses, it seems unlikely the Bobcats would consider a move out of Charlotte in the foreseeable future. Team owners would have to pay tens of millions in penalties under terms of the arena lease, and there would be few non-NBA cities in a position to provide the Bobcats with a facility comparable to Time Warner Cable Arena.

The Bobcats face a rough economy and tepid fan interest. According to a home-attendance comparison at ESPN.com, the Bobcats are 26th among 30 NBA teams, averaging 14,526 fans. Only Minnesota, Indiana, Memphis and Sacramento trail the Bobcats this season.

However, the attendance situation improved late in the season with the team in a playoff race. Thompson noted that three of the last four homes games were sellouts, and that the Bobcats added at least 20 corporate partners over the past 12 months.

Johnson originally bought the Bobcats as an expansion team, replacing the Charlotte Hornets. The team began play in 2004, following Johnson's initial investment of about $330 million – a $300 million expansion fee, plus about $30 million in working capital.

The Bobcats would have made a profit their first season, playing in the since-demolished Charlotte Coliseum, had the team not simultaneously launched a regional sports cable network, C-SET. According to a source familiar with the team's finances, a multi-million-dollar profit was more than consumed by a $17million loss on C-SET, which folded.

When the Bobcats moved into a new, publicly funded uptown building, ticket prices rose substantially. The team has spent to improve the product under managing partner Michael Jordan, hiring Hall of Fame coach Larry Brown and making three trades this season to upgrade the roster.

Despite that, the Bobcats are essentially flat in attendance compared to last season and down nearly 2,000 per game from 2005-06, their first season uptown.

The Bobcats spent about $63million in player salaries this season. While that was about $5 million above the NBA's salary cap, it was still the fourth-lowest payroll in the league this season.

Johnson, a Washington businessman who made his fortune as the founder of Black Entertainment Television, has had a rough time in Charlotte as the NBA owner. He has criticized the business community for what he sees as a lack of support of the team.

Johnson owns more than half of the team, though numbers aren't disclosed. This year's media guide lists 19 minority owners including Jordan, Family Dollar CEO Howard Levine and former Bank of America chairman Hugh McColl Jr.

Johnson has asked the partners for more cash in the past. Declining to participate in a cash call would reduce a partner's stake in the team.

Good riddance.

I've been waiting for this shoe to drop. I think you can pretty much look for Walsh to make a move for either Bell, Diaw or both in exchange for an expiring and possibly one of our D-League additions (aka cheap talent) over the summer.

It's likely Hughes will be the expendable (expiring) guy to help LB improve his defense and bring in two MDA favorites. I would also expect that Wallace or Okafor would be included in ant salary dump deal.





[Edited by - Rookie on 04-15-2009 12:00 PM]

how do you put a franchise in a city where the previous team left b/c fans weren't attending games? charlotte getting another franchise was borderline negligent.

Buy their pick :D

Posted by Bippity10:

Can you say Seattle Bobcats?

Not until they get a new arena. And they'd be the new Sonics. Seattle got to keep the name.

Posted by djsunyc:

how do you put a franchise in a city where the previous team left b/c fans weren't attending games? charlotte getting another franchise was borderline negligent.

Heh. Stern allowed the romanticism of the southern b-ball tradition to sucker him into a "fool me twice" situation. Although, at the time, many blamed former Charlotte Hornets owner George Shinn as a reason for the collapse in support. Whatever the case was, they shouldnt have revisited the city --- especially so quickly. We dont need so many damn teams!

I want the Bobcats gone if for no other reason than to rid the world of their God awful jerseys.