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The scapegoating of Mr. Johnson

Back off the Bobster


Last week, the powers that be circled the wagons around the city's corporate elite after Bobcats owner Bob Johnson committed the ultimate faux pas -- airing his dirty laundry with them in public. That simply isn't done here. In the process, Johnson officially shattered the status quo that everything is just peachy with the arena.

That in turn embarrassed those who cast anyone who questioned the arena's economic model before it was built -- i.e., me and others -- as mental defectives. Worse yet, Johnson's accusations about a lack of support from the business community suggested that Uptown is somehow unable to fully support an arena, and you don't criticize Uptown.

So they tore into Johnson. Johnson isn't doing enough to sell the team and the arena, his beer costs too much and his team rots, they concluded. How could millionaire businessmen be expected spend money to see a crappy team during economic downturn when they are firing their own employees?

But I understood exactly what Johnson said. He wasn't blaming the fans, though by the end of the week the spinmeisters had cast it that way. He was blaming the business community. And he has every right to.

The deal with them wasn't that they would support the arena only if the team won and there were no recessions. The deal was that they would support the arena, period. The taxpayers weren't allowed an escape clause, and the business community shouldn't get one either.

By now, most people have probably forgotten why we built the arena. It wasn't for regular fans. Seating for them was actually diminished at the new arena compared to what we had at the old coliseum. The lack of luxury suites and need for luxury seating in the old Hornets coliseum on Tyvola Road was the chief reason Charlotte's leaders gave for building a new publicly funded basketball arena Uptown. The NBA couldn't make it here without more luxury seating, we were told, and the business community desperately needed this seating to entertain important clients. At the time, if you opposed building an arena because we needed more luxury seating, you opposed the corporate community. That in turn meant you opposed the very survival and prosperity of Charlotte.

It steams me that those who sold the community the luxury-seating line are now covering for the business community. And it also steams me that now, after ramming the arena down the public's throat and forcing taxpayers to pay, some members of the corporate community apparently believe they shouldn't have to if it isn't convenient for them. At least it seems that way to Johnson, and given the sluggish sales of high-end seating from the very beginning at the arena, before the team made any mistakes, I'm inclined to agree with him.

Bobcats investor Felix Sabates put it best in a Charlotte Business Journal article in January 2007.

"In my opinion, [Bobcats owner] Bob [Johnson] was sold a bill of goods," he said. "The NBA sold him a bill of goods and so did people in the local market. Success isn't going to happen overnight. Bob thought it would be overnight, and I did, too. I wouldn't have invested a damn dime if I thought it would be this kind of struggle."

Johnson's biggest error, it seems, was not getting firmer commitments from the business community before he signed on the dotted line. And he apparently didn't closely study the market for luxury seating, which was beginning a downward slide nationally when the arena deal was being crafted. A Wall Street Journal article last year documented the problem -- federal tax law changes on corporate entertainment and corporate entertainment cutbacks were driving the business community away from arenas across the country, even as the amount of luxury suites and seating mushroomed. For instance, Bank of America, like other big businesses across the country, began dumping dozens of luxury suites it no longer uses about three years ago. Still, cities keep building arenas. And the number of luxury suites is expected to expand by another 20 to 25 percent by 2012, making a desperate situation even more cutthroat as sports venues compete for the dollars of the same 5,000 to 6,000 companies -- a market that isn't expanding along with the number of luxury suites and seating.

This could at least partially explain why you often go into the arena for an event and see few lights on or bodies in the luxury areas. Those who own them clearly aren't showing up to use them, which has to be a revenue killer.

To be fair, the team has admitted it fell way behind where it should be on marketing and that it needs to put together a better team. The team's reputation for being chaotically managed is well-deserved and the NBA's problems are well documented, too.

But I'm not convinced that the corporate support would come back if the Bobcats and the NBA got their act together. The business community supported arena model, particularly for basketball, is no longer as viable as it once was. And that's what no one wants to talk about.

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