Newspaper article THE JOURNAL RECORD

Basketball Impact Predicted High

Newspaper article THE JOURNAL RECORD

Basketball Impact Predicted High

Article excerpt

A Continental Basketball Association franchised team could have a $10 million to $15 million annual economic impact on Oklahoma City.

That is the estimation of Chip Land, owner of exclusive bidder rights for a Continental Basketball Association franchise in the Oklahoma City metropolitan area.

Land estimates that the Oklahoma City franchise would generate $2 million to $2.5 million in gross sales including tickets, concessions, advertising and souvenirs. Admission probably would cost $4.

An Oklahoma City team would have 28 home games plus exhibition games and possibly playoffs, he said. The average league attendance is 3,000, but Land expects an Oklahoma City team to draw twice that many fans.

"There has been no negative reaction to the idea, but the money raising is going slower than I had hoped," said Land. In three weeks, he has raised $300,000.

Land is trying to interest investors in the $600,000 franchise fee and $350,000 start up capital to purchase the franchise. The Continental Basketball Association board of directors will consider the application at the Sept. 28 meeting in Wichita Falls, Texas.

"If we were fully capitalized, I don't see any way they could turn us down. (Going to the meeting without the full franchise fee) gives them an avenue to say no. But what I hope to get is conditional approval, contingent on full capitalization during a grace period.

"I think this franchise is geared toward local ownership, but if the local owners don't step forward with their checkbook, then it will have to happen with out-of-state ownership. There are a lot of people around that understand the value of a sports franchise."

Seventy percent of the investment goes into that franchise fee, which is an appreciable, transferable asset. The value of that asset is underwritten by the National Basketball Association to subsidize the league as their official developmental league. The league is stable and growing because the National Basketball Association ensures that it is.

Continental Basketball Association franchise value has shown geometric growth from $6,000 in 1979 to $500,000 in 1988, said Land. It is expected to increase to $750,000 Thursday.

"That is like the stock going up 30 percent the day we buy it," said Land. That is still below double A baseball franchises, which start at $1.3 million.

"Once the league fills out the triple A level to 27 teams from 16 today, which is a one-on-one relationship with the National Basketball Association, the triple A level will be full and we will have a commodity with a lot of demand and no supply. At that point, there will not be any new franchises available and it should be comparable to the 89ers that just sold their franchise.

"I believe in this as an investment. …

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