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Decision on All-Star 2017 looms over Hornets, Charlotte

North Carolina's HB2 law forces NBA to relocate festivities

POSTED: Jul 25, 2016 11:56 AM ET

By David Aldridge

BY David Aldridge

TNT Analyst

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The NBA and the Hornets were looking forward to hosting All-Star 2017 in Charlotte.

"Mourn, Duncan," Isaac whispered in between the Gershwin chorus. "The fight is over; nobody won."
--Thane Rosenbaum, Second Hand Smoke

The bathrooms of North Carolina remain pristine.

This is not said with snark or spite, but with sadness. In the end, one wonders if all this was worth that.

The fallout from the NBA's decision last Thursday to move the 2017 All-Star Game from Charlotte because of the North Carolina General Assembly's passing of the controversial HB2 bill is still coming down, leaving fans in Charlotte disappointed and angry, vendors with a huge loss in revenue and politicians doing what politicians do -- fulminate at the latest passing cloud.

Passed by the General Assembly last March, HB2, in essence, reversed a Charlotte ordinance that had granted gay, lesbian and transgender people anti-discrimination protection. A part of the original Charlotte bill allowed transgender people to use whichever bathroom they felt most comfortable using; that section has come to dominate discussion on the issue, which is why HB2 is frequently called the "bathroom bill."

The NBA and the Hornets have spent the last four months trying to find a solution that would allow the league to bring its entire base of operations to the state. The team tried to find a solution that would allow it to do business, knowing that many around the country were vehemently opposed to HB2, but many in the state were vehemently supportive of HB2.

"The way we looked at it, I am grateful that Adam was very deliberate and measured in making the final decision, working with us as partners from March 28 until (Friday)," said Fred Whitfield, the Hornets' president and Chief Operating Officer, on Saturday. "I have talked to him or Kathy Behrens (the NBA's President for Social Responsibility and Player Programs) or Rick Buchanan (the league's General Counsel) every day since then. It's a very complex situation, very delicate."

The NBA's decision brought the league's values in direct conflict with a state that has long supported it, and whose team has the league's most famous majority owner in Michael Jordan -- who also happens to be one of just two minority owners in the league, along with Sacramento's Vivek Ranadive, an Indian-American.

The NBA has also run afoul of North Carolina Governor Pat McCrory, a staunch supporter of the measure. And if there's one thing the NBA tries to avoid, it's alienating or offending anyone who could be a potential customer.

... Just from a guy that's grown up in Charlotte and that is basically my hometown, it's disappointing for the city not to be able to celebrate the game of basketball as they had planned.

– Stephen Curry

"Without talking more about the law -- I've kind of spoken about that before -- but just from a guy that's grown up in Charlotte and that is basically my hometown, it's disappointing for the city not to be able to celebrate the game of basketball as they had planned," two-time league MVP and Charlotte native Stephen Curry said Thursday, according to a transcript from the American Century Golf Championship, where he played over the weekend. "I obviously understand Adam Silver's decision. I have to kind of think about it some more. It's really fresh. I was kind of still planning on going to Charlotte."

But Curry and just about everyone else is a tourist in this issue, parachuting into town, then leaving when the weekend is over. The Hornets live and work in Charlotte, and have to make this work with those who supported HB2 going forward.

It put enormous pressure on Jordan, who met with local businesses and with state legislators along with Whitfield to see if there was any chance to reach a compromise. Jordan has been criticized since his days as a player for not speaking out more forcefully on social issues; this was no different.

After the league announced its decision last week, Jordan said in a statement: "We understand the NBA's decision and the challenges around holding the NBA All-Star Game in Charlotte this season. There was an exhaustive effort from all parties to keep the event in Charlotte, and we are disappointed we were unable to do so.

"With that said, we are pleased that the NBA opened the door to Charlotte to host All-Star Weekend again as soon as an opportunity was available in 2019. We want to thank the City of Charlotte and the business community for their backing throughout this entire process, starting with the initial bid. We are confident that they will be just as supportive and enthusiastic for the 2019 NBA All-Star Game."

Different sports and teams have reacted differently since the implementation of HB2.

The State University of New York-Albany cancelled a scheduled November basketball game at Duke, as well as field hockey games at Duke and at North Carolina, citing an executive order by New York Governor Andrew Cuomo issued in March that barred non-essential state employees from traveling to and working in North Carolina.

However, the 2017 PGA Championship, to take place in Charlotte at the Quail Hollow Club, is still on schedule to be played there, as are the first and second rounds of the 2017 NCAA men's basketball tournament in Greensboro.

The controversy began last February, when the Charlotte City Council passed its anti-discrimination legislation. The following day, the General Assembly passed HB2, and Governor McCrory signed the ball that evening.

HB2 also prohibits cities in North Carolina from passing any legislation to restore or extend anti-discrimination protection to the LGBT community, though McCrory says private businesses and companies can adopt whatever policies they wish.

The league has had to wrestle with similar issues in the past.

In 1987, then-Commissioner David Stern moved the league's annual meeting, with close to 1,000 people set to attend, from Arizona -- which had not yet recognized the holiday honoring Dr. Martin Luther King, Jr. -- to City of Industry, California. And the current Commissioner, Adam Silver, acted quickly after the disclosure of racially insensitive voice recordings in 2014 involving then-Clippers owner Donald Sterling. Silver banned Sterling from the league for life and fined him $2.5 million.

The NBA is not a utopia when it comes to social and economic issues. Like almost every private business, it has had its ups and downs when it comes to hiring and retaining people of color and women in non-playing positions, both at the team and league levels. But compared to other leagues, who continue to struggle to make significant gains in high-profile areas, the NBA continues to do better.

It is (a) shame that less than one-tenth of our country is forcing the league to have such a knee jerk reaction and to deprive the citizen(s) on our great state of having a great showcase even as the NBA All Star Game.

– Hornets minority investor Felix Sabates

It was news when the NBA fell to a B grade this year in gender hiring, according to the University of Central Florida's Institute For Diversity and Ethics in Sport's Annual Racial and Gender Report Card.

Meanwhile, the hit to the Hornets is substantial.

All-Star Weekend is a $100 million injection into a local economy, according to estimates. And additional revenue losses by artists and performers who refuse to play at Time Warner Cable Arena in protest of HB2 would be devastating. The legendary band U2 has pulled out of two upcoming shows there, joining the popular band Maroon 5, which cancelled a scheduled date in September. TWCA hosts more than 100 non-Hornets events a year, including concerts and family shows. (Bruce Springsteen pulled out of a scheduled show in Greensboro.)

And by 2019, new arenas -- and new potential landing spots for that year's All-Star Weekend -- are scheduled to be up and running in San Francisco, Milwaukee and Sacramento.

"We've still got to play games in Charlotte," Whitfield said. "The other 29 teams have to come in and play in our arena, and we've got to market our brand and continue the momentum we've built over seven years. It's going to be an uphill battle for us."

Local businesses in Charlotte are also feeling the repercussions.

Rhonda Caldwell, owner of The Main Event, Inc., an event-planning company in Charlotte, had already factored revenue from All-Star Weekend into her 2017 budget. She estimates that $100,000, minimum, has just flown out the door, extremely unlikely to recouped.

"For a small business, that's major for us," said Caldwell, who's owned her company for nine years.

It's not just her small business. She works with stage managing companies, lighting companies, prop companies, any number of suppliers who come together for big events like this. Having All-Star weekend in town is akin to something like the Democratic National Convention, which was in Charlotte in 2012. It brought national exposure to her business.

"Generally, for that type of event, for it to be a week-long activation, at least eight to 10 events within a week," she said. "That's working non-stop, because I know that's pretty much the same line we fell into with the DNC. We worked around the clock, actually, to produce events throughout the day as well as the evening. That's a lot. Some people don't get even that in a month. So for us to be able to work and have that number of events in a week, that's significant for us. And we're a small, African-owned business. It impacts my company; it affects my employees and my staff, and everybody's process and planning and expectations."

The NBA's decision was sharply criticized by McCrory, but he wasn't the only one.

Hornets minority investor Felix Sabates, who had been a co-owner of the original Hornets franchise in Charlotte in the late 1980s, strongly disagreed with the league and his own team's public support for the decision, saying in an e-mail obtained by local media in Charlotte that the NBA "overreached" in pulling the game.

Sabates said Silver should have waited until the courts decided whether HB2 was legal, and said Charlotte's mayor, Jennifer Roberts, "opened a can of worms" with the initial decision to allow transgender people to choose what bathroom they wanted to use.

Joe Lacob, Peter Guber, Rick Welts
Warriors CEO Rick Welts (middle) was key helping to sway the NBA on its decision.

"It is (a) shame that less than one-tenth of our country is forcing the league to have such a knee jerk reaction and to deprive the citizen(s) on our great state of having a great showcase even as the NBA All Star Game," Sabates wrote. "Shame on those responsible for such a short sighted decision to take the NBA All Star away from Charlotte I always thought this was (a) country that ALL peoples not just a few can determine our future...

"What is wrong with a person using a bathroom provided for the sex (they) were born with, if you want to change your gender so be it, we are a free county, but don't force 8 years old children to be exposed to having to share bathroom facilities with people that don't share the organs they were Bourne (sic) with, this is plain wrong, this could cause irreparable damages to (children) that don't understand why they have to see what God did not mean for them to witness, we have some very confused business as well as political humans that frankly have made this a political issue rather then (sic) moral issues, SHAME ON THEM."

Whitfield has known Sabates for years, and believes he was simply expressing frustration with the loss of seven year's work the franchise had exerted in trying to get the All-Star Game and turn the team around since Jordan bought a majority interest from former owner Bob Johnson.

There were limits to the actions the league was willing to take. Even though the Hornets play 41 regular season home games in Charlotte, the league never considered moving the team out of the city, either on a temporary or permanent basis. In this, the NBA was similar to the NFL, which decided in 1990 to move Super Bowl XXVII from Arizona, where it was to be played in 1993, to Los Angeles, but never contemplated forcing the Cardinals to play elsewhere.

Because the Hornets are a lessee at Time Warner Cable Arena, they can make the rules in their building. The team's policy for several years has been that anyone can use any bathroom they like in the arena. In addition, there are family bathrooms on every floor of the building.

The team worked with the state legislature to see if a compromise was available. It never asked for a complete repeal of HB2. But it did seek meaningful change. None was forthcoming, perhaps not surprising in the heat of a political year in which McCrory, the former mayor of Charlotte, is in a very tough re-election battle with the state's attorney general. The legislature adjourned in early July.

Once it became clear there would be no compromise from the legislature and governor, the Hornets disengaged with Raleigh.

"In this instance, it was so complex, there really was no right answer," Whitfield said. "Would it be a celebration? Would it be festive? The people who make NBA All-Star Weekend exciting, would they come to Charlotte and make it a great weekend? We just made a decision that it would be extremely hard to galvanize all the key constituencies of the NBA and be in a celebratory mode."

By the time the NBA's Board of Governors met in Las Vegas during the Summer League the second week of July for an update, there were not many options remaining. Several major sponsors -- Pepsi, Nike, Turner Sports (which runs NBA.com) and ESPN, Kaiser Permanente, Anheuser-Busch -- had publicly or privately expressed severe misgivings about doing business in North Carolina.

And the words of Warriors CEO Rick Welts, the highest-ranking openly gay executive in U.S. major team sports, to the BOG were impactful. (As the team's CEO, Welts is always at Board of Governors meetings with co-owners Joe Lacob and Peter Guber.)

Welts had lots of history with All-Star Weekend. He's credited with developing the modern All-Star Weekend program, including the creation of the dunk contest -- which Welts has acknowledged was a lift from the ABA. Welts spoke passionately about what HB2 means to him, and what it means to other people who are out in the NBA community, like former player Jason Collins and referee Bill Kennedy, and those on teams and in the league office who are still in the closet, and talked specifically about the law's impact.

He talked about fans and former players who may want to attend, and what the impact would be if those fans and ex-players couldn't bring gay family members or business partners with them -- or how uncomfortable anybody who simply disagreed with the law might feel coming to Charlotte.

Before Welts spoke, according to a source, about half of the league's owners supported a potential boycott of Charlotte, with the other half sympathetic but unsure if that was the right move. After Welts spoke, several owners who were on the fence about leaving Charlotte got on board.

Reached Saturday, Welts declined to talk further about his words or the impact they had, saying only that he "appreciated" Silver and Whitfield keeping him in the loop as the league and team sought solutions and the controversy grew.

The league's decision was backed by some of Charlotte's biggest corporate entities and financial backers of the Hornets, including Bank of America, Wells Fargo and Duke Energy.

The next step is up to the state's voters. A new governor could certainly change the political calculus with regard to HB2. In addition, five federal lawsuits both supporting and opposing the law have been filed; the matter is sure to spend the next year at least in the courts, beginning in the fall. For now, the league is leaving 2019 open (the 2018 game has already been awarded to Los Angeles).

The Hornets can do nothing but get back in line, and wait.

"The one thing, at the end of the day, that I'm thankful for -- I would have been devastated (otherwise) -- was holding 2019 open," Whitfield said. "We hope and pray that by then our city, state and country will be in a place where nothing can preclude us from hosting in 2019."

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Longtime NBA reporter and columnist David Aldridge is an analyst for TNT. You can e-mail him here and follow him on Twitter.

The views on this page do not necessarily reflect the views of the NBA, its clubs or Turner Broadcasting.