Tom Benson saw a great business opportunity waiting to happen when he bought the New Orleans Hornets from the NBA for $340 million in 2012. According to Forbes, the team is now valued at $420 million – that’s $80 million, or 24 percent, more than a year ago, and $195 million, or 86 percent, more than the $225 million the franchise was valued at a decade ago.
With $116 million in revenue and $11.2 million in operating income last year, along with a $50 million arena renovation nearing completion and a veteran team returning, there is hope that the “Nest” will be full of fans, profits will soar and getting to the playoffs will be a slam dunk.
“We’re seeing an increase in the valuation of teams in both football and basketball,” says Dennis Lauscha, president of the New Orleans Saints and New Orleans Pelicans. “Take, for instance, the recent selling prices of the Buffalo Bills ($1.1 billion) and L.A. Clippers ($2 billion). Obviously these are staggering numbers based on a number of factors, including the local market. But at the end of the day, we’re in this for the long run, and the reality is there is no intent to sell. We want to bring a championship to the area more than anything else.”
What’s In a Name?
Shortly after Benson bought the franchise, he announced a plan to change the name to the Pelicans – the mascot of the city’s long dormant minor league baseball team – which was founded in 1887 and played in New Orleans for more than 70 years. With a new name and mascot came a complete overhaul of marketing and merchandising opportunities more fitting of the Crescent City and Gulf South region.
Lowered Prices
During the 2012-13 season, Hornets games had the NBA’s second-worst attendance, with 565,930 fans or just 13,803 per game. Along with the name change, Benson lowered ticket prices, which resulted in a franchise record for season ticket sales – 12,000. Attendance increased to 672,029, a per-game average of 16,390 for the 17,003-seat arena – it’s third-highest since moving to New Orleans in 2002.
Depending on Davis
In Anthony Davis, a 7-footer selected first overall in the 2012 NBA draft, the team has a great player to build around and a great ambassador to the public. Already an NBA All-Star, Davis is the Pels’ franchise player and will be at the center of the team’s game plan and marketing campaigns for years to come.
Championship Hopes
The Saints, valued at $1.1 billion, are one of the NFL’s more profitable teams despite their small market. If the Pelicans’ popularity continues to grow, profits will, too. And if Tom Benson & Co. can match their Super Bowl victory by summiting the NBA with a championship, the Pelicans will be “nothing but net.”
chris price is an award-winning journalist and public relations principal. When he’s not writing, he’s avid about music, the outdoors and Saints, Ole Miss & Chelsea football.
