Hornets Are Not The Only Candidates For NBA Contraction!

http://www.cbssports.com/nba/story/15322847/given-honest-criteria-other-teams-could-join-hornets-in-contraction


In addition to the New Orleans Hornets' obvious candidacy for contraction, what other NBA teams should be on the chopping block as the league seeks relief from hundreds of millions in annual losses?

The NBA uses a formula developed by consulting group McKinsey & Co. that handicaps how teams are performing on and off the court given the size of their markets and available resources. This would be the place to start, though the NBA does not divulge the results of the annual study -- which it uses to dole out a portion of luxury tax and revenue-sharing funds.

The criteria, therefore, must be fairly straightforward, though the order of importance might vary depending on the team:

1) Total local revenues: If a team cannot avoid deep losses, even with substantial revenue assistance from healthier teams, it should be considered for contraction.

2) Annual losses: The teams that are losing the most money undoubtedly are being squeezed by a combination of inadequate local revenues and mismanagement. Both should count.

3) Market size, as defined by number of TV households, since that measurement has a direct correlation to the local broadcast revenues a team can earn.

4) Arena lease terms: As deserving as a team may be for contraction, if the penalty for breaking the lease with its arena is cost-prohibitive, it has to be scratched off the list.

The Hornets, now owned by the NBA, pass the test with flying colors -- with the lone possible exception of ticket revenues, an area in which the team has done better in recent years. According to league gate receipts data from the 2008-09 season obtained by CBSSports.com, the Hornets were 20th in the league, with $28.3 million in net gate receipts.

 Not bad for the smallest TV market in the NBA, No. 52 in the nation, according to Nielsen. For reference, the next biggest market in terms of TV households, Memphis, netted a league-low $12.9 million in gate receipts during the '08-09 season, the most recent season for which figures have been obtained.

 The Hornets reported $45 million in net ticket revenue for the fiscal year 2009.