HUGE NEWS! Clay Bennett & Co. buy Supersonics!

[metro]

McClendon fined $250K by NBA

From staff reports

Sonics partner Aubrey McClendon has been fined $250,000 by the NBA for comments he made last week about moving the team to Oklahoma City, the Seattle Times reports.

NBA spokesman Tim Frank confirmed the fine to the newspaper.

Last week, McClendon told the Journal Record newspaper: "We didn't buy the team to keep it in Seattle, we hoped to come here. We know it's a little more difficult financially here in Oklahoma City, but we think it's great for the community and if we could break even we'd be thrilled."

McClendon is one of the partners in Professional Basketball Club, the ownership group headed by Clay Bennett.

"(Seattle has) 60 days to make some decisions they haven't been willing to make in the past year, and if they make them in a way that satisfies Clay, then the team will stay there," McClendon told the Journal. "If they don't meet the requirements he's laid out, the team will move and Clay has indicated they'll come to Oklahoma City."

[Pete]

A quarter of a million?? That's a steep fine for one innocent (albeit bone-headed) sentence.

I can just hear the NBA: "Aubrey & Clay, we're on your side here but you're making this hard for us! Keep your traps shut."

[BDP]

That's kind of funny.

I wonder what actual rule it was that his comments broke. Maybe owners can't talk about relocation without approval first, but then why hasn't Bennett been fined for talking about Vegas or Kansas City? I know the NBA didn't like that either. I mean, they can't just wake up and say "well, we didn't like what you said, here's a fine". There has to be some statutory basis for the fine, right?

[CuatrodeMayo]

Would he have been fined if this hadn't caused an uproar in the sports world?

[betts]

I still wonder if his comments would even have been found, buried in the bottom of the Journal Record interview. I don't know how religiously any journalists search the internet. Would Seattle fans of the Sonics have found them? Maybe. From a couple of discussions with local sports' journalists, I think it's the message board folks who usually have the breaking news.

[BDP]

Is this new?:

NewsOK: Seattle Council may pass law to keep Sonics from moving

It certainly shows the pitfalls of doing businesses with governments. The Sonics have a lease with the city and the city wants to pass a law to limit the Sonics ability to negotiate based on the terms and value of that lease. So, here you have a two party lease, but one party can actually legislate to influence the execution of the lease.

Sheesh, I wish I could do that with some of my leases.

[Midtowner]

BDP -- there's this little thing called the 14th amendment. Seattle should look into it.

[betts]

I do think the fine shows that the league is not unconcerned about what happens in Seattle. If it was just fine with the team moving to OKC, I don't think there would have been a fine, just the disclaimer issued earlier. It's not really good news.

[BDP]

I really thought this thing would get more cordial, but it seems to be getting uglier. It's just so weird that the Washington legislature did nothing to keep the Sonics and the city has done what it could to make it an even worse situation for the owners or any future potential tenants, but now they want to legislate to restrict the owners' rights to negotiate out of the lease? It really is like: we don't care that much, but we're going to force you to stay and make it as bad as possible for you. This latest move seems more like vendetta politics than any reasonable or sensible move on the part of Seattle. It seems some people have their feeling hurt or ego bruised and they want to use their role as civil servant to make themselves feel better. Seattle is more insecure than I thought.

[HOT ROD]

I agree about the city of Seattle's actions. In actuality, if the city does enact that ordinance; it could let Bennett and the NBA off the hook - given its unconstitutionality and the fact that if/when passed, it not only makes Bennett's Oct 31 deadline MUTE but it also shows the NBA that it is the CITY who has not been acting in good faith.

I can count the incidents where the CITY did not show good faith; Let's see

1) immediately after Clay bought the franchise, the CITY of Seattle refused to meet with Bennett to negotiate a new arena or EVEN renegotiate the Key Arena terms.

2) shortly after the purchase, the majority of the citizens of Seattle enacted I-91 which prohibits public finance of any sports facilities unless the franchise guarantees profit sharing of some sort (I forget the proportion but it is ridiculous). This initiative guarantees that no new arena will be built in the city unless it is privately financed, since no owner in his/her right mind would ever agree to building something and sharing majority of the profits with the city just to get a little public funding

3) Despite Clay's attempt at staying in Metro Seattle (now), the Washington Leg gave him the finger, didn't even bring his bill - which was sponsored by Ways and Means committee chair - to the floor for discussion and/or debate.

4) Lately there has been some 'rumblings' of private interest in an arena but nothing concrete is on the table (since everybody knows you need public financing for a good portion of it - unless it is in the city of Seattle). 68 days to go and still nothing on the table and nothing looks to be on it either, even tho we/Seattle supposedly has all of these billionaires and millionaires just sitting around (should tell ya something ....)

5) and NOW, the city council will enact an ordinance that would prohibit sports teams from renegotiating lease agreements - which is unconstitutional by the way

Like I said, I hope the city goes forward with this, since it will show their incompetence and the CITY's lack of good faith as I described above. All would have to be done, is for

A) Clay et al to keep their mouth shut aside from stating their disappointment with the city's action (SAY NOTHING ELSE RIGHT NOW).
B) Let the city pass the ordinance then,
C) Since the ordinance passed, go to the city of Seattle with a briefcase of cash for a buyout. Of course, the city can not accept but you need to do this because ....
D) NOW, Have Clay's/Aubrey's lawyers go to the Federal courts to challenge the constitutionality of the ordinance. By enacting the ordinance, the city basically voided the lease - since they felt the need to pass an ordinance to state the terms of contracts thereby forcing a business to conduct in its city (which Surely the courts would rule in Bennett's favor since this is unconstitutional. Bennett needs to show up with a buyout tho, even with the ordinance in place - to show his due diligence).
E) At the same time as E, go to Stern and meet individually with Key team owners and determine now where they stand. would they approve relo and if so when.

F) After all of the above is done, announce that the Sonics will relocate to OKC in 2007.

Think this wont work? Given the City's ordinance, it would invalidate any lease agreement since momentarily it would superscede any contract agreement (since contracts by nature, must have their terms listed on said contract and agreed to by both parties, the ordinance thus supersceding the lease and thus by its nature violating us law). Then, given the ordinance - all Bennett would ahve to do is show up trying to break the lease. He could do so sooner than Oct 31 since the ordinance essentially voided the lease and esp if the majority of the other owners are on his side. He shows up to Seattle and they follow the ordinance, it shows the courts that Bennett did due diligence and that the city did in-fact enact an unconstitutional ordinance. It also shows the courts that as such, the city is not acting in good faith since the ordinance precludes the lease, thereby violating the lease itself and making it unenforceable (since both parties can no longer agree to its terms).

No lease, Hasta La Vista. and the SOONER the better! dont wait until 2008, move in 2007 - as soon as the aformentioned takes place. Of course, if the courts take longer, then the move could take place in 2008 (maybe starting with the STORM 2008 season).

In the end, the City of Seattle gets NOTHING and the Seattle fans get a HUGE slap in their arrogant elitist faces!!!

[HOT ROD]

And BDP, you're right!!

Seattle IS very insecure! As long as people are bowing and blowing smoke up Seattle's a** saying how cool or progressive it is, then HEY, 'We're the Best and we love you'. But anybody come and set the record straight, that Seattle is really JUST another mid-size city not worthy of the NY, Chicagos, LA, Torontos or Vancouver's; World Cities of the world - then THEMS FIGHTIN' WORDS!!!

Definitely vandetta on the part of the city. And like I said, I HOPE they pass the ordinance, so they can be taught a VERY GOOD LESSON!!!

One more thing, Betts - the fine from the NBA did not show their lack of support for OKC, OH CONTRARE; the fine covers the NBA's butts should the city of Seattle seek to sue. that's it.

You have to consider, the fact that the NBA never came out and publicly chastised Aubrey (other than a behind closed doors fine, for no reason that they even admit to) shows that actually the NBA is on Bennett's side! And likely would approve the move, definitely if/when the city passes the ordinance.

I can't wait (as most here in Seattle also). We could care less about the Sonics and it is time these elitist aholes here get what they deserve.

Let me clue you in, the state of WA gave Boeing $3.5B to keep the 787 assembly in Everett, which was contractual. did the state enact a law statute thereby forbidding Boeing from ever leaving given this contract? No, because it would have been unconstitutional.

We'll see on Sept 9 how DUMB and INSECURE the city of Seattle really is. The While World will know the truth!!

[HOT ROD]

By the way, let's keep this hush hush on the Seattle forums. Let them dig their own hole back in the ground!!!

[onthestrip]

Thats Mark Cuban like numbers.

Isnt Aubrey what you call a silent partner, maybe this will make him realize that.

[John]

Big Aub is the next Mark Cuban... I love it!

[metro]

It's idiots like this guy and Jerry Shottenkirk that keep this going. As HOT ROD said, we need to keep our mouths shut for 60 days or so. Or even better yet, keep them shut until Bennett and/or Stern make an announcement. This article is only going to keep the controversy going. If it wasn't for the JR, I bet this story would already be dead in the water. Sad thing is, I bet they didn't sell any extra papers, they probably just got more hits to their website.


McClendon fined $250K for comments on moving Sonics

August 24, 2007 SEATTLE – The NBA has fined Seattle SuperSonics co-owner and Oklahoma City energy tycoon Aubrey McClendon $250,000 for comments he made two weeks ago that his group didn’t buy the team to keep it in Seattle.

League spokesman Mark Broussard in New York confirmed the penalty Thursday morning, but said he did not immediately know the reason the fine was imposed. The comments of McClendon were at odds with commissioner David Stern’s stated hope of keeping the Sonics in the city they’ve called home for all 40 years of their existence.

McClendon is one of four original partners with Clay Bennett in Professional Basketball Club LLC, the Oklahoma group that purchased the Sonics and WNBA’s Storm for $350 million in July, 2006. This month, McClendon told an Oklahoma City publication that the group has always hoped to move the NBA franchise to Oklahoma, but he acknowledged the team could make more money in the Pacific Northwest.“But we didn’t buy the team to keep it in Seattle; we hoped to come here,” McClendon, chief executive of Chesapeake Energy, told The Journal Record in Oklahoma. “We know it’s a little more difficult financially here in Oklahoma City, but we think it’s great for the community and if we could break even, we’d be thrilled.”

The ownership group has set a deadline of Oct. 31 to secure an agreement for a new arena in the Seattle area. If a deal is not in place by then, Bennett has said he will begin the league’s process of relocating the Sonics to Oklahoma City.McClendon’s fine is comparable to those the NBA has assessed to Mark Cuban, the outspoken owner of the Dallas Mavericks. Cuban was fined twice during the 2006 playoffs, with the league penalizing him $250,000 after his outbursts during the league finals, when he yelled toward a referee and later toward Stern.

Cuban, who says he matches every dollar with a charitable donation, was fined $500,000 – at the time the most against one person in the NBA – in January 2002 for comments that included saying he wouldn’t hire the league’s head of officiating to manage a Dairy Queen.

A spokesman for McClendon at Chesapeake Energy said Thursday from Oklahoma City that McClendon’s fine by the NBA is not a company issue and referred questions to the Sonics’ ownership group.“We respectfully decline to comment further about this matter,” said Brent Gooden, a spokesman for Professional Basketball LLC.Bennett and McClendon tried to calm the furor in Seattle the day after McClendon’s comments were published. They issued a joint statement that called McClendon’s comments his “personal thoughts.” Bennett said McClendon was “not speaking on behalf of the ownership group.”“It is my hope we will see a breakthrough in the next 60 days that will result in securing a new arena for the Sonics and Storm in the Greater Seattle area,” Bennett said, though even he acknowledges no breakthrough is on the horizon.

McClendon said he, Bennett and others in the ownership group became interested in purchasing an NBA team after the New Orleans Hornets temporarily relocated to Oklahoma City for two seasons after Hurricane Katrina.“We started to look around, and at that time the Sonics were going through some ownership challenges in Seattle,” McClendon told the newspaper. “So Clay, very artfully and skillfully, put himself in the middle of those discussions and to the great amazement and surprise to everyone in Seattle, some rednecks from Oklahoma, which we’ve been called, made off with the team.”

[Easy180]

All I can say is wow....This is an interesting article to say the least

Hypothetically, OKC is ready

Source says Sonics owner told employees Oklahoma City will foot relocation costs

ERIC D. WILLIAMS AND FRANK HUGHES; The News Tribune
Last updated: August 25th, 2007 01:23 AM (PDT)

Seattle SuperSonics chairman Clay Bennett told his employees that Oklahoma City is ready to foot the bill for the team to relocate there next season, a source within the organization said.
That information was passed along to Sonics employees during a meeting with Bennett on Wednesday, an employee who attended the meeting told The News Tribune on the condition of anonymity.

However, Bennett clarified those comments late Friday, saying the statements provided by the source from the meeting were a hypothetical example of how a community that is interested in relocating a business would help provide some of the mitigation costs to make that happen.

During the 40-minute meeting Wednesday, the team employee said Bennett provided the group with details of what Oklahoma City is willing to pay for to woo the Sonics:

• Any legal fees involving the team’s fight to break the KeyArena lease.

• Whatever the settlement is to the Seattle Center to buy out the lease.

• All relocation fees the NBA would force the team to pay other owners.

• Costs of physically moving the team’s staff and offices.

• Costs of upgrading the city’s current arena, the Ford Center, to make it NBA-ready.

• Costs of building a new arena, and when it’s finished, keeping the old facility running.

Bennett’s comments Wednesday were in response to a Sonics employee asking what a community such as Oklahoma City has done to prove to Bennett that it wants the Sonics, the source said.

“He lit up like a Christmas tree,” the source said of Bennett’s reaction to the employee’s question. “He got real happy and he started spouting off these things.”

Bennett told The News Tribune that his comments were a hypothetical response.

“The context of my response was after being asked the question how could Oklahoma City possibly be a competitive market to Seattle,” Bennett said. “And my answer is because Oklahoma City is a medium marketplace that highly values the opportunity to obtain an NBA franchise, not unlike any community or any state would value the pursuit of any other highly additive economic development opportunity, such as the value of a manufacturing plant or corporate headquarters.

“The response was an attempt to provide some clarity as why it is so important that Seattle respond and recognize at once that the team is at risk. Without a successor venue at KeyArena, and without a modern facility, the team cannot remain economically viable in this marketplace.

“Our deal has never changed. On July 18, 2006, we outlined very clearly what needs to happen in order to keep the team economically viable and in the marketplace, and we are continuing in the pursuit of that objective.”

Minutes before the employee’s question, the source said, Bennett was adamant that he had not spoken in depth with Oklahoma City Mayor Mick Cornett, a close ally, or any other city officials because he was focused on what he was trying to do in Seattle. The source said the team’s approximately 100 employees met with Bennett in four groups to allow for a more intimate setting for frank questions to be asked about the status of the organization.

“He said as far as he feels he’s done everything he can to get an arena deal here,” the source said. “He’s given up on talking to the media. He’s given up on talking to everybody. He feels like he’s getting more of the blame, and it should be (Howard) Schultz and the ownership before him because Schultz sold it to an outside ownership group as opposed to finding local owners.”

The source said Bennett went on to say when the Oct. 31 deadline comes he intends to file relocation papers with the NBA. League commissioner David Stern would then appoint a relocation committee to review the application. Ultimately, the board of governors, which includes representatives from each team, would vote on the application. A simple majority is required, and a relocation fee would be set.

Most recently, the Charlotte Hornets paid $30 million to move to New Orleans in 2002.

Bennett also told his employees that the Seattle Storm would remain with the Sonics wherever they end up, and that whether the Storm would play its 2008 season in Seattle would be determined around December.

Where the Storm play ultimately could suggest where the Sonics end up.

When one employee asked if the Storm’s destiny would suggest where the Sonics play in 2008-09, Bennett, the source said, declined to answer. Terry McLaughlin, executive vice president of administration, then stepped in and ended the session.

“He basically said that the only way an arena is going to get done in Seattle is if something falls out of the sky,” the source said. “Those were his exact words.”

Since Bennett’s ownership group purchased the Sonics in July 2006 he has remained steadfast that the team’s priority is to remain to Seattle.

Recent events have served to undermine those sentiments.

Two weeks ago Aubrey McClendon, a part owner of the Sonics, was quoted in an Oklahoma City business journal saying the ownership group wanted to bring the Sonics back to Oklahoma City all along. The NBA fined McClendon $250,000 for his comments, and the Sonics placed a gag order on McClendon.

Seattle Mayor Greg Nickels has said he will enforce the Sonics’ lease agreement with the city, which runs until 2010.

To strengthen that agreement, the Seattle City Council proposed creating an ordinance that would bind the team to the KeyArena lease until 2010. The earliest the council would vote on the proposed measure would be Sept. 10.

Eric D. Williams: 253-597-8437

eric.williams@thenewstribune.com

[OU Adonis]

Wow o Wow. Thats big. I would support the city in paying for the relocation costs. But would other residents?

Lets say it cost $50 million to move the team, would there be a groundswell of support to have the city pay for it? I hope so.

[Easy180]

Isn't there a possibility of them having those funds socked away already...I know they already have the renovation funds set aside

Don't really know, but it seems like those things are already promised and wouldn't require a vote...No way he brings them here w/o guarantees

[OU Adonis]

I was just on the seattle times forum. Man those guys piss me off to no end. I refuse to post on there because I might say something i might regret.

Do they have the funds already packed away for the ford center upgrades? Any idea how much they are going to put on renovations?

[Saberman]

I think they said that there was $50 million set aside to bring the Ford Center up to NBA standard.

[Karried]

What a traitorous 'Source' .. I'm hoping he wasn't an employee but if he was, hopefully, he'll get outed and fired. Big mouth.

[betts]

I suspect Clay knew this would get out. You can't talk to a hundred employees who are residents of the city you're at least discussin moving from and assume someone's not going to leak it to the press. It could be another attempt to fire up the Washington politicians (how many chances should they get?) and/or a way to send a message to OKC that they will expect some help. Remember, Kansas City is probably getting desperate enough to promise anything.

There would be tampering issues if he and Mick have already planned this out, I think, so hopefully this is either hypothetical or something they discussed long ago, like when they were putting together a package for Shinn.

The safest thing is not to discuss anything with the Seattle forum members, Adonis, so in my opinion you're doing the right thing. One never knows what one might say that would be interpreted wrongly and could cause trouble. I agree they are really aggravating. But they find us aggravating too, and it's not all the posters. It never is. What I don't understand is why the New Orleans posters aren't all excited at the prospect of the Sonics moving to OKC. That would completely eliminate one of their biggest threats for the Hornets moving. It's rather arrogant to assume everything is going to be fine in NO, as their lease isn't so long either and they're having to work to sell tickets.

[Easy180]

I was just on the seattle times forum. Man those guys piss me off to no end. I refuse to post on there because I might say something i might regret.

Do they have the funds already packed away for the ford center upgrades? Any idea how much they are going to put on renovations?

No reason you can't defend OKC and try and diffuse some of their anger with some humor thrown in

I actually consider myself an OKC ambassador on there...Pretty important stuff being discussed

I've already won over all kinds of people...(If by saying all kinds you really mean zero)

[Easy180]

The article points out that the city may make breaking the lease too costly for Bennett...If what Bennett said in the previous article is true....OKC will be paying for it anyway....Kind of takes away some of the power of that argument doesn't it


Can lease keep Sonics here?

By Jim Brunner
Seattle Times staff reporter

Seattle politicians are talking tough about the Sonics' lease at city-owned KeyArena.

Mayor Greg Nickels says he'll force the Sonics to remain through the end of the lease in September 2010, despite owner Clay Bennett's stated desire to take the team to Oklahoma if he doesn't get a deal for a new arena in the next two months.

City Council members say they'll introduce legislation prohibiting any early buyout.

But can city officials really chain the Sonics to KeyArena for three more years?

As a general rule, tenants cannot be forced to stay until the end of a lease; landlords can merely collect monetary damages for breach of contract.

But the Sonics' lease contains language that could allow the city to reject an early buyout. The single paragraph, known as a "specific performance" clause, essentially says the city can require the Sonics to stay at KeyArena for the full term.

At the very least, the city could use that clause to obtain a court order to delay a Sonics move, several experts in contract and sports law predicted.

The experts warned, though, that the contract language is not ironclad and that courts could eventually allow Bennett to buy his way out of the Sonics' lease. (The Storm's lease also runs until 2010, but it allows the team to opt out after any season.)

Seattle officials say they're aware of the legal uncertainties but are confident they would prevail in court.

"We're in as good a position as a city can be to hold a sports tenant to a lease," said City Attorney Tom Carr, who has assigned a city lawyer to prepare to defend the lease.

A Bennett spokesman declined to comment on the matter. Although Bennett has not said he would sue to break the lease, he has indicated he would like to negotiate an early exit. Bennett also has said he'll seek NBA permission to relocate the Sonics and Storm if he doesn't get an arena deal in the Seattle area by Oct. 31.

If it comes down to a fight, the specific-performance clause in the Sonics' lease could give the city important legal leverage. While it would not permanently prevent a move, the clause could jack up a settlement price or even encourage a team sale.

"That's the silver bullet," said Fred Nance, a Cleveland attorney who used similar lease language to fight Browns owner Art Modell's efforts to move the NFL team to Baltimore in the mid-1990s.

Nance said the language in the Browns' lease allowed the city to get an injunction requiring the team to play the remaining three seasons on its lease at Cleveland Municipal Stadium. That prompted Modell and the NFL to negotiate a deal that eventually allowed the team to move to Baltimore but guaranteed Cleveland an expansion franchise that kept the Browns name.

In 1996, King County relied on similar language in the Seahawks' Kingdome lease to halt then-owner Ken Behring's plans to take the team to California. Behring still had 10 years left on his lease at the Kingdome, and the county got a temporary injunction to stop him from leaving. That gave local officials time to broker the team's sale to billionaire Paul Allen and devise a new stadium deal.

The case never went to trial, so it's unclear whether Behring would have prevailed.

Legal experts said judges usually rule that tenants can escape leases provided they pay enough money.

"The general rule in contract remedies is you are only entitled to the economic expectation or its equivalent. You are not entitled to their actual performance of the contract," said Kate O'Neill, a University of Washington law professor who teaches contract law.

Alfred Brophy, a law professor at the University of Alabama, said judges typically enforce specific-performance clauses in leases only when "there is no other kind of relief that would make you whole." In this case, he said, Sonics' owners and the city probably could estimate the amount of money lost from an early Sonics exit.

"That might be an enormous amount of money," said Brophy, an expert in landlord-tenant law. It might even be enough money to make breaking the lease too costly for Bennett, he added.


It is difficult to know exactly how much Bennett would have to pay if he were allowed to leave KeyArena early. At the very least, the Sonics' lease says the team would have to pay the remaining years of rent through 2010. The team also would have to reimburse the city for its share of luxury-suite and concessions revenue. In all, the city estimates in recent years it has received between $8 million and $11 million annually from Sonics and Storm games.

City lawyers also likely would argue for additional damages based on the economic impact on Seattle Center and the surrounding neighborhood. However, the lease also says the team would get credit if any new events were booked at the arena that offset the city's losses.

Michael McCann, a law professor at Mississippi College, said that if the Sonics' lease does wind up in court, elected judges might feel public pressure to prevent, at least temporarily, a sports franchise from leaving town. But usually, he said, courts eventually rule that a buyout is legal.

"I honestly think this will get negotiated. There is a monetary value to it [the lease]. An economist would say everything has a price," said McCann, who contributes to Sports Law Blog (http://sports-law.blogspot.com).

However, McCann said, lawsuits by the city or fans could drag on long enough to achieve their purpose, even if they ultimately lose in court.

"I think it will delay the process, and I think that delay will enable a local ownership group to get involved. The longer it drags out, the more likely they will stay," he said.

[Pete]

That "hypothetical" by Bennett paints OKC in a bad light IMO.

It shows the city has been actively negotiating with him in great detail and is willing to finance a legal battle against another city.

None of this is surprising, and I'm encouraged to see OKC so aggressive, but if I lived in Seattle I'd be very upset by all this.