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Hornets pay Oklahoma City $3.8 million settlement

OKLAHOMA CITY -- Oklahoma City accepted a $3.8 million
settlement offer Tuesday to cover its expenses from the New Orleans
Hornets
' temporary relocation and its share of the team's revenues
from a successful first season in the city.

The offer, approved unanimously by the mayor and the City
Council, was included in an amendment to the team's temporary
relocation agreement and also includes terms for the team's second
season in Oklahoma City and an option for a third season considered
to be a contingency plan for the team in case it cannot return to
New Orleans as planned in 2007-08.

The city's share of the profits will be $589,000, while the
Oklahoma Capital Investment Board will receive $251,000 and
Oklahoma Professional Sports LLC, a group led by new Seattle SuperSonics owner Clay Bennett, will receive $414,000. The three
groups combined to share a $10 million guarantee that would have
been paid to the Hornets if the team didn't meet its revenue goals.
With the Hornets making money, the city and its investment partners
received a cut.

"I'm still shaking my head at our good fortune," Mayor Mick
Cornett said. "The team did so well and was supported so strongly
that we're actually sharing in the profits. That would have been
hard to imagine a year ago."

The new agreement also arranges for improvements to be made to
areas of the Ford Center including both teams' locker rooms, video
boards and a players' lounge. Additional X-ray equipment and
defibrillators are also among new additions planned for the Ford
Center.

"Those are things that I guess every other NBA team would have
demanded or may have been required ... but because of the
circumstances of last year it wasn't required. And because it was
considered a one-year deal, it wasn't deemed necessary," Cornett
said.

"Now as we look at ourselves as supplying a permanent NBA
status on this city, I think it's OK to go ahead and start making
some of these capital investments."

Cornett said the city would put away its share of the profits to
be used on further arena improvements down the road. The Ford
Center and the Cox Convention Center across the street are already
getting $6.6 million in improvements as the city prepares to host
the Big 12 basketball tournaments in March.

"We expect to have a permanent NBA team at some point, and
there are going to be capital needs at the Ford Center," Cornett
said. "I believe it's a situation of when. When we transition to a
permanent NBA city from a temporary NBA city, there will be capital
needs at the Ford Center that we will need to address."

After selling out half of their 36 games in Oklahoma City last
season, the Hornets are set to play another 35 home games in the
city this season. The remaining six, including the team's home
opener, will be played in New Orleans.

Season ticket sales in Oklahoma City already have exceeded last
year's total of about 11,500.

"Sharing revenue with our partners at the city is the only
fitting way to celebrate the end of this historic season," Hornets
owner George Shinn said in a statement released by the city.
"During a time of crisis, we found open arms in Oklahoma City, and
the Hornets hope to show the wonderful fans our appreciation with
an even more exciting and successful 2006-07 season."

The settlement was a result of months of negotiations after the
city rejected the Hornets' initial offer of $3.2 million. The two
parties had differed on the team's local revenue and the threshold
at which the team would have to share its profits. The Hornets
included two preseason games and a Jan. 18 game against Memphis
that was moved to Oklahoma City from Baton Rouge, La., less than
two weeks in advance but had a higher benchmark. The city excluded
those games from its revenue calculations, resulting in a lower
benchmark.

The amended agreement sets a $40 million benchmark for next
season, which will be adjusted with the Hornets' expenses for
gameday use of the Ford Center. If the Hornets exceed that total,
they will share half of their profits with the city. However, the
city and its partners will no longer fund the revenue guarantee.

The new agreement states that the Hornets could not relocate to
another city other than New Orleans for 2007-08 "unless otherwise
directed by the NBA."