This story from Bloomberg wire services seems to point to the fact the Hornets may be staying in New Orleans long term.

The New Orleans Hornets will break even at worst after preseason projections of a $20 million loss, team owner George Shinn said.

The Hornets last night eliminated the Dallas Mavericks in the opening round of the National Basketball Association playoffs, advancing to face the defending champion San Antonio Spurs.

Sellout crowds and an invigorated fan base will help the Hornets at least break even this season, Shinn said during an interview with Bloomberg Radio’s “On the Ball” that will air this weekend.

“We’ll be right at a break-even point,” Shinn said. “When the season started, we were budgeted to lose about $20 million. That is slowly evaporating.”

Shinn also said officials from the team and state are negotiating a long-term contract for the Hornets to remain in the NBA’s smallest media market, which is recovering from Hurricane Katrina.

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The team is asking for subsidies from the state, including cash and tax rebates, Shinn said without being specific.

Shinn said large-market teams such as the Los Angeles Lakers generate about three times the revenue as the Hornets, without being specific. The Hornets want an agreement that enables them to generate revenue that will rank in the middle of the 30-team league, Shinn said.

“We could make this thing work big-time,” he said.

As for personnel, Shinn said his priority is to reach agreement on a long-term contract extension with All-Star guard Chris Paul, a leading candidate for the Most Valuable Player Award.

Paul, who turns 23 next week, can become an unrestricted free agent after the 2009-10 season. He’s eligible for a six- year extension worth almost $98 million.

“I’m going to bust my chops to get Chris Paul re-signed this summer,” Shinn said. “They’re going to get everything they want. I hate to say it — it hurts our negotiating position, but this kid is an incredible kid. He’s the catalyst upon which we’re going to build this franchise.”

The Hornets and Spurs open their best-of-seven Western Conference semifinal May 3 in New Orleans.