DA's Morning Tip
Future of New Orleans Pelicans stable, even as team mourns owner Tom Benson's death
Franchise, for now, in no real jeopardy of being relocated elsewhere
How does the death of Tom Benson impact the future of the Pelicans in New Orleans?
Benson, the longtime owner of the NFL’s New Orleans Saints, died last week at 90, leaving control of both the Saints and Pelicans, which he bought from the NBA in 2012, to his wife, Gayle. Gayle Benson has already been approved by the NBA as her husband’s successor when it comes to making decisions concerning the franchise.
Tom Benson had long planned to leave the Saints and Pelicans to Gayle Benson, whom he married in 2004. His plan survived a lawsuit filed by a daughter from his first marriage, Renee, and her two children in 2015, claiming Tom Benson did not have the mental capacity to decide to leave his franchises to Gayle Benson, his third wife. He had originally planned to leave the teams to his granddaughter, Rita, but changed his mind and his will. A judge ruled that year in Tom Benson’s favor. A final legal battle within the family to determine the value of the shares of the Saints and Pelicans that Tom Benson wanted to remove from his family’s trusts was settled in 2017.
So Gayle Benson was in place to assume her husband’s role as owner of his sports teams when he died.
“As we mourn the loss of Tom Benson,” NBA spokesman Mike Bass said in a statement Friday, “we know the New Orleans Pelicans are on strong and stable footing as Gayle Benson, currently the team’s Alternate Governor, assumes control of the franchise.”
Gayle Benson addressed the team soon after her husband’s death last week, and “basically said that everything will remain the same,” Pelicans coach Alvin Gentry said Sunday. “Everything is stable and in place.”
This is a crucial season for the Pelicans, with All-Star Anthony Davis trying to carry the team across the finish line and to the playoffs for the first time since 2014. His task was made harder when his fellow All-Star, center DeMarcus Cousins, went down for the season in January after tearing his Achilles’ in a win against the Houston Rockets.
Cousins is an unrestricted free agent after this season and could have — at least before the injury — signed a five-year max deal starting next season for around $175 million. With Davis already on a $145 million max deal and guard Jrue Holiday just starting his $126 million contract this year, the team is essentially hard-capped this season. The Pelicans have gone about as far as they can go in outlay. (Despite that, New Orleans had enough roster flexibility to acquire Nikola Mirotic before the trade deadline.)
All that led to speculation that Gayle Benson may want to sell one or both of the franchises soon. The Pelicans are one of just three teams – the Denver Nuggets and Portland Trail Blazers are the others — with no concrete plans to launch a G League franchise in the near future. GM Dell Demps said in a radio interview earlier this month that the team has put existing discussions for the G League “on pause” after it looked like the Pelicans were working toward a deal with Pensacola, Fla., to house a G League affiliate.
But a source who worked directly with Tom Benson during his purchase of the Pelicans said over the weekend that there was no doubt that Gayle Benson would keep both teams for the foreseeable future. “There may be some changes later, but nothing imminent or early,” the source said.
And any notion of the Pelicans moving any time soon is tempered by the reality that the Pels, thanks to the league’s revenue sharing plan, don’t really have much financial incentive to sell.
New Orleans was one of 14 teams that reportedly lost money in the 2016-17 season, according to a report by ESPN.com last September. But after receiving its cut of revenue-sharing dollars from the league’s higher-revenue franchises, New Orleans was no longer in the red. (The team also got a boost in its local TV ratings last season. According to Forbes, the Pelicans had the fifth-biggest year-over-year increase in local television ratings in the league, 17 percent, drawing an average 1.44 rating on FS New Orleans.)
That is important, for the Pelicans are often among the first teams thought of these days as a potential move target. Seattle is moving quickly toward securing an expansion NHL franchise and working with the newly formed Oak View Group to renovate Key Arena for both NHL and NBA teams. That means the hunt for potential existing franchises to move to the Emerald City could accelerate in intensity in the next few years, especially with NBA expansion unlikely any time soon.
The Pelicans’ lease at Smoothie King Center runs through 2024, though. And if Gayle Benson isn’t looking for a quick flip of the franchise, the likelihood of anything happening, at the very least, before then appears remote. And the NBA has gone to great lengths to ensure the stability and viability of a franchise in New Orleans since the then-Hornets moved there from Charlotte in 2002.
The franchise’s history with the city and state has been one of deal making that has helped the franchise remain economically viable as it fights for audience share locally — the Pelicans are currently 25th in the league in attendance, per ESPN.com, at 16,418 per game. The NFL’s Saints, which Benson also owned, are the clear top dog in town for fans’ affections, but they had a 35-year head start on the basketball team.
The state spent an initial $10 million to renovate what was then known as New Orleans Arena as a condition of the move from Charlotte. After Hurricane Katrina struck in 2005 and badly damaged the arena, the NBA arranged for the team to play in Oklahoma City for two seasons, but never once considered leaving the franchise there.
Former NBA Commissioner David Stern was adamant that the team not only return to New Orleans after repairs to the arena be made, but also worked to bring the 2008 All-Star Game there. (The 2017 All-Star Game was also awarded to New Orleans after the NBA took the game from Charlotte, where it was initially supposed to be played, in the wake of the North Carolina General Assembly’s passage of the controversial HB2 “Bathroom Bill.”)
Smoothie King Center is owned by the state of Louisiana and is operated by SMG, the arena management company. SMG also runs the Mercedes Benz Superdome that houses the Saints. They get a base fee from the Louisiana Stadium and Exposition District, the state entity that owns the arena, as well as additional fees from non-NBA and NFL events at Smoothie King and the Superdome.
Then, famously (or, infamously, depending on the Laker fan with whom you speak), the NBA bought the team from former owners George Shinn and Gary Chouest in 2010 for $300 million, keeping it from being sold to out-of-state owners while the league sought local ownership. (It was during the league’s ownership of the team that Stern, acting as the team’s de facto final decision maker while the league owned the team, vetoed a proposed three-team trade that would have sent Chris Paul from the then-Hornets to the Lakers.)
Benson bought the team from the league for $338 million in 2012, ensuring that it would remain in New Orleans for the foreseeable future.
He may not have been the only prospective owner for the Pelicans, but another source directly involved in the sale then said that Benson was the perfect prospective owner — “given the proximity of the Arena and the Dome and the proficiency of the business operations that were already functioning,” the source said. “And he was a good owner, willing to commit resources to the team and the building (including a great new practice facility).”
The team then got a $50 million subsidy from the state, and was allowed to continue receiving an annual $3.5 million tax break, in a deal with the state in 2012 that extended the Pelicans’ lease with the arena through 2024. The Pelicans reportedly received $40 million in naming rights from Smoothie King in 2014, further monetizing the building. And the building has gotten good marks in fan surveys, ranking in the top 10 among all NBA arenas in overall satisfaction with the game experience.
Attendance this season at Smoothie King Arena is holding steady from last year, when the Pelicans were 24th in the league in average attendance.
The hope in the Big Easy is that Davis can lead the Pelicans to at least two additional home games there in April. After routing Boston Sunday night, New Orleans is in sixth place in the Western Conference, tied record-wise with fifth-place Utah and seventh-place San Antonio at 40-30. Davis has been sensational in Cousins’ absence: since the All-Star break, he is averaging 30.8 points per game on 51.1 percent shooting, 11.8 rebounds and an insane 3.6 blocks per game.
Davis casts a long shadow over the New Orleans sports world and perhaps only Saints quarterback Drew Brees, who won a Super Bowl there in 2010, has more cache. Yet Tom Benson was the boss of both. His absence creates a void in the city that will be filled, one way or another — by continued great feats by great players, or by silence if they’re no longer in town.
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