The franchise formerly known as the Charlotte Bobcats will enter the 2014-2015 NBA season as the Charlotte Hornets. The Bobcats had a more than forgettable stretch; prior to this season, the best roster put together in recent memory was led by Stephen Jackson, Larry Hughes, Boris Diaw, Raymond Felton, Gerald Wallace, and Tyrus Thomas. Not surprisingly, this group only lasted four playoff games against the Orlando Magic.
Yeah, things were rough for Bobcats fans. The rebrand, along with roster and coaching overhaul, will attempt to wash away those memories.
The most high profile rebrand in recent NBA memory is that of the Brooklyn Nets. With a new zillionaire owner who was seemingly willing to spend whatever it took to compete for a ring, the Nets moved from New Jersey to Brooklyn. Superstar rapper, Brooklyn icon, and minority owner Jay-Z was the face of the movement, which was executed brilliantly. Brooklyn gear remains amongst the top selling merchandise in the league. When you look at the other teams in the top 10, this is a pretty impressive feat.
1. Miami Heat – LeBron, Wade, Bosh, rings. Makes sense.
2. Los Angeles Lakers – Elite championship history, the league’s second-largest market and also KOBE KOBE KOBE.
3. Chicago Bulls – A contending team with superstar and former MVP Derrick Rose.
4. Oklahoma City Thunder – Elite team with two of the league’s top 10 players.
5. New York Knicks – NBA’s largest market and Melo.
6. Boston Celtics – Aliens are the only reasonable explanation for why the Celtics are on this list. (Ed. Note: or their championship history and Boston’s market size)
7. Brooklyn Nets – …Deron Williams?
8. Golden State Warriors – A fun team led by Steph Curry, a top 10 player.
9. San Antonio Spurs – One of the greatest players of All-Time in Tim Duncan. Not to mention Manu, Tony Parker, and all of the rings.
10. Los Angeles Clippers – Title contender, plus the flash of CP3 and Blake.
With the exception of the Boston Celtics, the Brooklyn Nets are the only team here without at least one superstar and a championship contending roster. They’re selling a bunch of merchandise, and they also sit at fifth on the Forbes list of the most valuable NBA franchises without much of an on the court product. Moving to New York City with sleek merchandise and a Brooklyn crowd that welcomes anything that Jay-Z sells is a good idea.
Point being, I’d say their rebrand was a home run.
The Hornets have a drastically different situation; there’s no rap mogul leading the way (sorry, Nelly), they’re not relocating to a brand new arena, and they aren’t spending crazy money on veterans in an effort to sell fans on maybe competing for a ring right away.
Regardless, what kind of financial impact can the Hornets expect from their name change?
Any help would be welcomed, as Charlotte is the second least valuable franchise in the league, according to Forbes. Though their $410 million valuation may be low, judging from what we’ve seen with recent sales, only being above the Milwaukee Bucks can not be good. Of course, this should be taken with a grain of salt, as the Bucks recently sold for $550 million.
$410 million may be low, but their value in relation to other franchises may be fairly accurate.
The team’s $115 million 2014 revenue ranks them third to last in the league, ahead of just the Bucks and Sacramento Kings. Their $7 million operating income puts them as a tie for fifth to last. They should really be tied for fifth, as one of the teams below them is the Brooklyn Nets, who had no problem spending unreasonable amounts in an attempt to compete. Making money was of no concern for the Nets.
Charlotte has spent roughly $4 million on the brand change. While this may seem like a lot, the costs run deep down to little things you would never think of; uniforms (both for the players and dancers), logos around the team facility, website design, business cards and other letterheads, etc. It costs money to replace these kind of things, and it also consumes employee time.
According to the WFAE link in the above paragraph, the team reportedly picked up 2,000 new season ticket holders following the announcement. This needs to be taken with a grain of salt; the team was starting to look respectable around this time, and they finally had an identity as a stingy defensive unit with head coach Steve Clifford and the franchise found their building block in Al Jefferson.
The name change certainly has some effect on these 2,000 new season ticket holders, it’s just almost impossible to quantify an exact amount.
Because this franchise was the Hornets at a prior time, there is an added nostalgia value. It’s suddenly cool again to wear your old Hornets gear, and those who don’t have any laying around want to buy some. The WFAE story cites that the team has set five single day merchandise sale records since the change, and that a jacket once sold for $80 is selling for hundreds online.
While the season ticket holder change is difficult, the merchandise spike is clearly a direct effect of the rebranding.
Then, there is the perception that the franchise is getting a bit of a fresh start with a new name. The Bobcats had a negative connotation because of their historically poor performance on the floor.
Last season was a positive, and they should only get better with the addition of Lance Stephenson and an extra year of development for players like Kemba Walker and Michael Kidd-Gilchrist. The team wouldn’t be any better or worse on the floor if they were still named the Bobcats, but the fresh perception should help the franchise’s value. Maybe this perception will help attract free agents, but it may be an appreciation value that isn’t physically touched until the team is, at some point, sold.
If the $4 million cost is accurate, the name change seems like a slam dunk for Charlotte. Old Hornets gear is now relevant again, and those without it are clearly buying some. This is exaggerated by the fact that the team, you know, isn’t a complete joke anymore. The timing was very good; in two years, the team has executed a rebrand, added a bright head coach, a defensive identity, and their two best players in Al Jefferson and Lance Stephenson. Not too shabby.