As the Charlotte Bobcats continue to struggle on the court, team executives say the business is doing better than last year.

The Bobcats say attendance at home games at Time Warner Cable Arena is up 12 percent so far this shortened season, compared to a similar period last year. Ticket revenue is up 13 percent.

Business is also up at the team store, which now sells team owner Michael Jordan's Nike-brand gear, along with the Bobcats' Adidas items. Merchandise sales have risen 31 percent, in line with the league-wide average.

Any business improvement would be welcome news to the Bobcats. Forbes magazine estimates the team saw an operating loss of $25.5 million last year on revenue of $101 million - the steepest loss in the league. The team's 3-26 record and 16-game losing streak are also the league's worst.

Still, the Bobcats are doing better than many of their peers at the box office: The NBA reported this week that 16 of the 30 teams had seen increases in ticket sales this season, while 14 saw declines.

Some of the Bobcats' sales bump is due to pent-up demand, the team says, because fans had to wait until Christmas for the shortened NBA season to start following a labor dispute. The Bobcats also had a strong early-season schedule, hosting crowd-pleasers like the Miami Heat and New York Knicks.

"There were a lot of people that were excited basketball was back," said Pete Guelli, the Bobcats' vice president of marketing.

The delayed season may have spurred demand, but it also hurt sponsorships. The Bobcats will be flat this year in sponsorship dollars, after two seasons of double-digit growth. Guelli said that was a "minor victory," considering the lockout, and the team has signed two seven-figure sponsorship deals that it will announce soon.

The Bobcats, who don't disclose financial details, are counting on help from a new revenue-sharing agreement that came as part of the labor deal. It was intended, in part, to help small-market teams like the Bobcats and the Sacramento Kings compete with juggernauts like the Boston Celtics and Los Angeles Lakers.

"That's what I know Michael was really fighting for this summer, for small market teams like ours to have an opportunity," said Bobcats President Fred Whitfield. He also said the team hopes to break even or be profitable under the new arrangement. By Forbes' estimates, this is the fourth year the team has been in the red.

Team performance an issue

Although they're optimistic, team executives acknowledge that the Bobcats have to play better if the franchise is to succeed.

"We're going to have some challenges going forward as we move through the rest of the season if our team doesn't perform better somewhat on the floor," said Whitfield.

The Bobcats do have a hot box-office draw for their final home game April 26: the New York Knicks and breakout star Jeremy Lin. Still, executives acknowledge the team will likely not be able to keep up the brisk pace of ticket sales as the season progresses.

Guelli said this season's attendance bump is partially due to the Bobcats' focus on aggressive marketing. That includes segmenting groups of fans and pushing them offers such as the Flex 4 Plan, which has tickets to any four games, starting at $56. The amount per fan spent on concessions hasn't changed, Guelli said.

The Bobcats have been averaging attendance of 17,082 so far this season, based on the NBA standard of tickets distributed. Last year, the team averaged 15,846 fans a game, for the whole season. The seasons might not be directly comparable, because this season is shortened due to the lockout.

Other revenue from arena

Another focus of the Bobcats' strategy is to maximize the revenue it earns from Time Warner Cable Arena.

Since Jan. 1, the 7-year-old arena has seen 400,000 customers enter for games and other events such as a monster truck rally, concerts and the circus. That puts the arena well on pace to surpass the 2 million who attended an event last year.

Under the Bobcats' agreement with Charlotte, the team pays for running the arena and gets to keep any revenue.

The Bobcats partner with AEG Entertainment to book shows. So far this year, they've scored big names, including Madonna and Coldplay. And the Democratic National Convention - "the Super Bowl of arena events," as Whitfield says - is scheduled for the arena in September.

The DNC will have control of the arena from mid-July until late September, and spokeswoman Joanne Peters said the host committee is paying $5 million.

"One thing an event like this will do is turn our arena into a global venue, as opposed to just a venue where you might see the Bobcats play the Lakers," said Whitfield. "There won't be anyone in the country that's not familiar with our arena after that."

The hope, the executives all say, is to take those revenues and revenue from the team, and invest in players who can compete, year in and year out, for an Eastern Conference championship.

"Mike will be committed to making that spend" when a high-priced free agent becomes available, said Whitfield. "This team can turn pretty quickly." Staff writer Rick Bonnell contributed.