"George Shinn has been an exceptional owner for New Orleans and Gary Chouest has been extraordinarily supportive as a minority owner," Stern said in a statement released by the NBA. "However, in light of the uncertain economic situation in New Orleans and Louisiana, Gary has decided not to move forward with the purchase of George's majority interest although he was prepared to remain an investor in the team. In the absence of any viable purchaser seeking to own the Hornets in New Orleans, I recommended to the NBA Board of Governors that the best way to assure stability and the adequate funding of the franchise would be for the league to step in, and complete the transaction and assume control. The Hornets have a strong management team in Hugh Weber, Dell Demps, and Monty Williams and we have recruited Jac Sperling, a seasoned sports executive and New Orleans native, to be the team's chairman and governor, with Hugh serving as president and alternate governor. I have notified Governor Jindal and Mayor Landrieu about this transaction and will continue our dialogue with them about ways to strengthen the franchise for new ownership in New Orleans."
SI.com's Ian Thomsen earlier reported the league's willingness to purchase the franchise, and their appointment of Sperling to adminster the team.
Sperling, a sports attorney, helped broker the 2005 sale of the Anaheim Ducks to his clients, Henry and Susan Samueli. As CEO of the Wild from 1997 to 2004 he turned Minnesota into one of the NHL's most successful franchises. Sperling was born in New Orleans.
Shinn founded the team in 1988 in Charlotte and moved the team to New Orleans 14 years later. He's been trying to sell his majority stake to Chouest since last spring, but talks fell through.
The league's takeover of the Hornets will make them the first franchise to be owned by the NBA.