NEW ORLEANS -- The Hornets and the state of Louisiana agreed to changes in the team's arena lease that could allow the NBA team to leave New Orleans early but would also keep the team in the city longer if fan support improves.
The new lease runs through 2014, an extension of two seasons.
"The extension essentially makes up for the time the team spent when it relocated to Oklahoma City following Hurricane Katrina in 2005," a joint news release from Gov. Kathleen Blanco's office, the arena's managers and the team said Wednesday.
It also allows the Hornets to opt out after next season, albeit with penalties ranging from $50 million to $100 million. The precise cost would depend on inducement reimbursements by the team to the state and a relocation fee imposed by the NBA.
The lease says the Hornets may leave only if average attendance is worse than 14,735 for the final five months of this season and next season. The benchmark is close to the team's average attendance for the three seasons before Hurricane Katrina. Such an average still would leave the Hornets in the bottom third of NBA attendance, league officials said.
"We believe that we have come up with an agreement that gives us a realistic expectation of success," Hornets owner George Shinn said. "Everyone in the organization is in New Orleans because they chose to be here. We want this to be our home for a very long time, and we have great confidence that we will succeed."
The Hornets, who were set to host the Los Angeles Lakers on Wednesday night, averaged 11,871 in their first 15 games this season, last in the league.
The new lease also relieves the state of responsibility to build a new practice facility. The team will instead continue to practice rent-free at the state-owned Alario Center, which has three basketball courts and is slated for expansion.
"Both the state and Hornets ownership have great confidence in the team's fan base," Blanco said. "With the team's performance on the court thus far and their work in helping rebuild New Orleans, I believe that the Hornets and their fans are on the right track."
The Hornets' return to New Orleans has met with mixed results. Major revenue sources such as suite sales and sponsorships are above pre-Katrina levels. However, entire sections of the less-expensive seats in the upper deck have been empty so far this season.
Another problem is the team's television contract with Cox Sports TV, which is owned by Cox Communications. The regional sports channel is unavailable to about 250,000 viewers in St. Tammany Parish, which is one of New Orleans' most affluent suburbs and is served by another cable company.
Cox is also unavailable to anyone in the metro area who has satellite TV, which became increasingly popular in the New Orleans area after Katrina because Cox needed months to restore cable service to many neighborhoods.
In other words, sports bars in New Orleans that have satellite TV often cannot show the local NBA team's games, home or away.
Shinn, who has sold a quarter of his team to Louisiana businessman Gary Chouest, said he and Chouest do not want to move his team again and are essentially asking only that metro-area fans buy 3,000 more of the arena's most affordable seats per home game.
"New Orleans is the right community for the Hornets," Shinn said. "We are exceeding many of the benchmarks that we set out for our return, including suite sales and premium seat sales. I am betting that fans want to be part of a winning organization. The ingredients are in place for the Hornets to be successful in south Louisiana. We have a young team that is winning now and features dynamic leaders in Chris Paul and Tyson Chandler. We celebrated our first sellout of the season last week and expect even greater fan support at our upcoming games and into the playoffs."