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NBA: A Season Begins : Price of a Starting NBA Franchise Is Up to $32.5 Million

November 08, 1988|CHRIS BAKER | Times Staff Writer

When the Chicago Bulls entered the National Basketball Assn. in 1966 as the first expansion team of the modern era, the team paid a $1.2-million franchise fee.

Their payroll was $180,000 for 12 players, which is what Michael Jordan probably makes for a 1-minute TV commercial.

The Seattle SuperSonics and San Diego Rockets paid $1.75 million to join the NBA the following year, and it cost the Milwaukee Bucks and Phoenix Suns $2 million to get into the league in 1968.

In the next wave of expansion, the Portland Trailblazers, Cleveland Cavaliers and Buffalo Braves, who eventually became the Clippers, joined the NBA for franchise fees of $3.7 million in 1970. And the New Orleans Jazz, who later moved to Salt Lake City, paid a $6-million franchise fee in 1974.

Times have changed--drastically.

The Charlotte (N.C.) Hornets and Miami Heat, who started their inaugural seasons last weekend, paid $32.5-million franchise fees, up $20.5 million from 1980, when the Dallas Mavericks joined the NBA.

The NBA will add two more teams at that price next year, the Minnesota Timberwolves and the Orlando (Fla.) Magic.

And some NBA executives think the expansionists got a bargain.

"We overpaid at $12 million and they underpaid at $32.5 million," said General Manager Norm Sonju of the Dallas Mavericks, a member of the NBA's expansion committee. "When we came into the league, teams were being sold for under $12 million and today teams are being sold for a lot more than $32.5 million."

The financial projections for the Hornets and Heat are much brighter than their outlooks on the court, where they're expected to lose a lot. San Diego won only 15 of 82 games in its inaugural 1967-68 season and Cleveland duplicated the effort in 1970-71. The Bulls hold the NBA record for most victories by an expansion team, 33 games in 1966-67.

"I predict that the Hornets are going to gross more than the Lakers (who made $13 million last season in leading the NBA)," said owner Jim Fitzgerald of the Golden State Warriors, who has studied the Hornets' income and expenses. "They're going to lead the league (in gross revenue)."

Said NBA Commissioner David Stern of the expansion teams: "They're going to wow our league. They're going to lose a lot of games, but they're going to be an unqualified financial success. We know what their lease obligations are, we know what their ticket sales are and we know what their payroll is."

Both the Hornets and the Heat have strong financial backing. The Hornets are owned by a partnership headed by George Shinn, who made $50-$80 million through a chain of business schools.

Carl Scheer, who spent 10 years as general manager of the Denver Nuggets and also served 2 years as head of the Clippers, was hired to run the front office. He tapped Dick Harter as the team's coach. Harter, a former coach at Oregon and Penn State, served his pro basketball apprenticeship as an assistant at Detroit and Indiana.

"Our goal is to get better every day," Scheer said. "We know that it's going to take time to get it done. We feel good about getting started but the harsh reality is that it's going to be extremely difficult."

The Heat has a 3-man ownership group that includes Billy Cunningham, who starred for the Philadelphia 76ers and coached them to the 1983 NBA championship. Cunningham's financial backers are Ted Arison, a multimillionaire cruise-ship owner, and Zev Bufman, one of America's top theatrical promoters. Singer Julio Iglesias is a limited partner.

The Heat tapped Lewis Schaffel, former general manager of the New Jersey Nets, to run the front office. A former player agent, Schaffel has been involved in the NBA for 10 seasons, working for the New Orleans Jazz and the Atlanta Hawks.

The Heat also has a rookie coach in Ron Rothstein. A former assistant at Atlanta and Detroit, Rothstein was credited with molding the Pistons into one of the NBA's top defensive teams.

"Our goal the first season will be to improve every time we step on the court and to develop young players," Rothstein told the Associated Press. "The most important thing to keep in mind when starting an expansion team is to be patient."

The NBA required expansion applicants to sell more than 10,000 season tickets, and Charlotte and Miami easily surpassed the requirement.

Charlotte has flipped over the Hornets. Team caps have been sold out and the 25 phone lines at the team offices are constantly busy. Even Scheer couldn't get through the switchboard when he was on the road recently.

"It's been a great love affair with the fans," said Scheer.

More than 8,000 fans attended a free team workout at the Coliseum last weekend and the Hornets have sold 15,000 season tickets at the 23,500-seat Charlotte Coliseum, which opened last summer.

They drew 23,388 fans for last Friday night's season opener against the Cleveland Cavaliers, and have sold 12 sky boxes.

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