Seattle primed to fight Sonics' move

[betts]

By Darnell Mayberry
Staff Writer

Here's the state of Seattle SuperSonics' talks as the countdown to a deadline dips under two months: Seattle officials are focused on doing what it takes to ensure the team stays and plays at KeyArena.

Sonics chairman Clay Bennett has said he'll apply for relocation to Oklahoma City if there's no deal on a new arena by Oct. 31. Seattle officials are vowing to make that move "very expensive and very difficult.”

In the city council, an ordinance is scheduled to be introduced this week that, if passed, would prohibit Seattle's professional teams from getting out of its leases early.

In the mayor's office, officials are unwavering on their opposition to securing public funds to build a new arena.

In the governor's office, there's a history of thwarting the relocation of a pro sports franchise.

While most Seattle officials have publicly stated their desires to keep the franchise in the city, the consensus is that renovations to outdated KeyArena — opened in 1962 and last renovated in 1994 — would be the only way it will happen.

Bennett, meanwhile, has maintained that an upgraded KeyArena is not an option and that a modern facility is necessary to keep the team economically viable in Seattle.

With negotiations stalled, Seattle leaders are now banking on the team's lease, which runs through 2010, to force the franchise to stay. The Seattle Times reported last week that the Sonics' lease contains language known as a "specific performance” clause that could force the team into staying.

But if Bennett does attempt an early buyout?

"We are going to make it very expensive and very difficult for the Sonics to get out of the lease early,” said Marianne Bichsel, a spokeswoman for Seattle Mayor Greg Nickels. "The mayor is very interested in a partnership to have the Sonics stay here in Seattle at KeyArena past 2010. We'd love to talk with him about that.”

Nickels is on record of saying the Sonics would need to put up $100 million for renovations to KeyArena.

Seattle City Attorney Thomas Carr, however, said the city isn't interested in working toward a buyout. .

"We're not in this for the money,” Carr said. "The city, I believe, loses money on that lease. And the benefit is we have another basketball team here."

So if they paid whatever it is that they owed under the lease, that wouldn't make us whole at all. That would leave us without the benefit of the bargain that we got when we renovated the arena, which was the Sonics were going to play here for 15 years and maybe more.”

Seattle Councilman Richard McIver, one of nine city council members and the chairman of the finance and budget committee, explained his reasons for not supporting a new arena by saying it wouldn't make sense economically.

"My basic premise, and one I think even Oklahoma needs to be worried about,” McIver said, "is if you're building a new stadium ... you have a 30-year bond and you have leases that last about 10 years. Then you find that the facility is determined to be inadequate. Over a 10-year lease, you still have a 20-year debt left.”

Bennett's asking price for a proposed state-of-the-art multipurpose facility is about $500 million, an amount Carr said is unrealistic.

Calls to Washington Gov. Chris Gregoire were unsuccessful. Gregoire has shown interest in keeping the Sonics in Washington. Under what terms, however, is unclear. As a state attorney in 1996, Gregoire used an anti-trust lawsuit to block former Seattle Seahawks owner Ken Behring from moving to Los Angeles.

Clark C. Griffith, a Minneapolis-based attorney who specializes in business, antitrust and sports law, said cities typically can block a professional team from relocating in cases like the Sonics', when the host city isn't interested in a buyout of the lease.

"And the NBA will not move a team if a court so rules that you have a use agreement and the team is enjoined from departing,” said Griffith, a former owner and front office executive with the Minnesota Twins.

With the Oct. 31 deadline drawing closer, and both sides seemingly as far apart on an agreement as ever, no other options seem feasible for keeping the Sonics in Seattle.

"Ideally, for me, we'd get together with Mr. Bennett and his group to do some remodeling on the existing facility to keep them in Seattle,” Carr said. "Otherwise I think we'll just try to free some air until the lease is over, then he has the right to do what he wants to.

"But the question is how much money can he lose?”

(From the DOK)

[dalelakin]

Excuse me if this is a stupid question but what is to keep Bennett and partners (or whomever) from simply paying out the remaining lease and then moving the team anyway?

[betts]

I'm not a lawyer, and I've heard a couple of explanations. There is apparently a "specific performance" clause in the lease that some people thinks means the team has to fulfill the terms of the lease by being present until it expires. The other question, which is almost impossible to answer until he weighs in on this, is David Stern's response to the city of Seattle. He was quite unhappy with them last year for being so resistant to a new lease. But, does he want an NBA team involved in a court battle which could be ugly? I don't know the answer to that. Might he just tell Bennett he has to sit out the next three years until the lease expires, or will he actually get involved to try and get a private arena built like he supposedly is doing in Sacrmento. I don't know.

[Saberman]

Seattle seems to think, if they make the Sonics stay until the end of the lease, that will give them time to put together a new arena or remodel the current arena, and the NBA will make them stay. What are they thinking.

IMO, if they make the Sonics stay till 2010, current ownership won't be able to get out of Seattle fast enough. The NBA will be pissed off that a city held a team hostage, and would help with the packing.

They seem to think in Seattle that since they put together last minute deals for another team, that they will be able, at the last minute, pull something out of their hat and make the Sonics and the NBA want to stay. Just don't think it will happen this time.

[Midtowner]

The specific performance clause will be litigated.. sure. I'd have to research the situation myself, but my understanding is that Seattle will not be able to force the Sonics to be in Seattle. They may, however, be entitled to the money which the Sonics would generate while in Seattle -- which ain't much.

[Kerry]

They may, however, be entitled to the money which the Sonics would generate while in Seattle -- which ain't much.

According to the Seattle City Attorney, the City loses money on the lease so I don't see how the Sonics would owe Seattle anything. In fact, Seattle should have to pay the Sonics to leave. If it was my team and I had to stay in Seattle for the nex 3 years I would move everything to OKC. The only thing I would do is play home games there but team offices would be in OKC.

[betts]

Not to mention the Storm, who have no contract with the Key Arena beyond this fall. I still think the name and history are a bargaining chip as well.

[Midtowner]

According to the Seattle City Attorney, the City loses money on the lease so I don't see how the Sonics would owe Seattle anything. In fact, Seattle should have to pay the Sonics to leave. If it was my team and I had to stay in Seattle for the nex 3 years I would move everything to OKC. The only thing I would do is play home games there but team offices would be in OKC.

Yep. That's sort of how I see it. Of course, I really don't know the facts, I haven't researched the contract and I have absolutely no clue how fair a shake the OKC-based ownership group will be treated in any pending litigation.

-- and it'll be in Washington State Court because the Supersonics (or some required entity) is based in Washington as are the prospective plaintiffs. That pretty much destroys the "diversity" avenue of obtaining access to the federal courts.

[HOT ROD]

Aren't the Supersonics based in Oklahoma City, since they are owned by the Pro BBall Club, which definitely IS based in OKC? Bennett and CO are based in OKC, and they own the Sonics/Storm franchise, regardless that the admin is still in Seattle (I liken it to Boeing, the admin and much of assembly is still in Seattle, but the Corporate office are in Downtown Chicago, so Chicago is where Boeing ist based).

I dont agree that it will be a Washington court, I think a federal one in WA or possibly NYC, since that is where the NBA ist based.

I also think it depends upon who files first. If Bennett does, then he could file federal in OK or NY or anywhere - and say that WA would be biased. However, the city of Seattle would file with King County Superior, but that doesn't mean Bennett could not ask for a change of venue due to the Sonics being based in OKC already.

[Midtowner]

The thing is, Hot Rod, unless they're litigating a Constitutional issue or some aspect of federal law, to get into federal court, you must have complete diversity of the parties on either side of the "v."

That being the case, a lot depends on how the Sonics/Storm are incorporated. If they're in Washington, and there's no federal question jurisdiction, then to state court ye shall go. I'd be afraid of that because in many places, state judicial officers are elected.. which is a bummer if you're the guy trying to move the hometown ball club out of state. Also, even if the ball clubs themselves are not Washington corporations, I'm guessing there's a necessary party who is a Washington Corporation somewhere on the Sonics/Bennett side. If that's the case, no diversity = state court.

Like I said a few times -- I have no clue as to the specific facts here, Washington law, or really anything other than federal diversity jurisdiction. Also, many corporations are not based where their corporate offices are located. There's a decent body of law covering that issue.

[HOT ROD]

Midtowner, I think your reasons are why Bennett will probably be granted venue at a federal court.

1) state courts tend to be appointed or elected, King County Superiour Court judges are elected and MUST run for "office".

2) There is a civic bias here, even tho most people dont care about the Sonics - they dont want to "lose" them to a place like OKC either. If it were LA or Chicago or even STL, then ... O, K, perhaps they could swallow that, but not a "new" big city like OKC (aka backwater or hickville ...)

3) Pro BBall LLC is based in OKC and its offices are in OKC. The Sonics organization are a wholly owned subsidiary of the Pro BBall LLC, so their operations hq is in downtown Seattle - but the organization is incorporated in OKC.

4) Bennett may *justly* feel that the state interpretation of contract law might be biased given the "history" of Washington state franchises. The change of venue will most likely be allowed for even those reasons alone, that there could not be a fair trial in Washington - with its largest city now imposing a rather meaningless ordinance - yet Washington judges would be most likely to enforce it. Why wait for appeal to go to federal, go there first.

I agree with you that there may be some issues, but I think we raised four or more great points as to why the hearing should not be located in Washington or at a WA state court, Oklahoma neither.

[Midtowner]

Hot Rod: Federal jurisdiction can't be granted just because there's a fear that the state court might not be fair. You can only get into federal court 2 ways -- diversity and federal question jurisdiction. There is no other way (in civil court).

I freely admit that I am no expert on the facts here, but as I see it, there will be at least one necessary party who is on the Bennett side of the "v" who is a Washington resident and a necessary party. Don't worry too much, Washington courts still have to follow the law -- and it's likely that their appellate courts are appointed for life, therefore, not beholden to political whimsy.

[Sea-Town Sonics]

Seattle wants its team and will not allow them to buy out their lease. They belong here.

[dcsooner]

You could very well be right however, two other things are also right, the Sonics are not owned by a Seattle conglomerate, and the lease expires in 2010. Oh and thirdly, C.B. does not have to sign an extension after 2010

[jbrown84]

Seattle wants its team and will not allow them to buy out their lease. They belong here.

So what happens when the lease is up? They leave anyway. It's a pointless battle on Seattle's part. Let the Sonics go, keep your name and colors (and memories), and cooperate with the NBA so you might actually get another team.

[betts]

This all will depend on how badly the NBA wants a team in Seattle. Clay Bennett will almost assuredly not sell the team to Seattle owners without them making it worth his while financially and without there being another NBA option for Oklahoma City. I'm not at all dying to get the Sonics, I just want an NBA team, as I believe do Clay and the boys. So, if David Stern wants a team in Seattle badly enough, he will figure out a way to make this all work. I will be completely flabbergasted if that doesn't include a team for OKC. Seattle is free to keep the Sonics, as far as I'm concerned, as long as there's one for us too.

[Midtowner]

Seattle wants its team and will not allow them to buy out their lease. They belong here.

If the specific performance clause is held unenforceable (those things are usually unenforceable), then Bennett can simply break the lease and pay whatever damages occur to Seattle.

If the lease is a losing lease, damages may be negligible.

You're confusing your emotional argument with the law. Rookie mistake

[Dustbowl]

Dadgumit!!!! How can we be a "Big League City" without a big league team?

Was this deal thought up and negotiated by the same people who built the Ford Center as a small league city arena? Then, came back to the taxpayers to pay for their lack of vision? Then ridicule anyone who questioned their judgment from the beginning? UH, I think so.

[betts]

Let's just wait and see how this whole thing plays out, dustbowl. We all know your opinion, but it's a bit premature to be pointing fingers.

[Dustbowl]

Let's just wait and see how this whole thing plays out, dustbowl. We all know your opinion, but it's a bit premature to be pointing fingers.

Yes, that's all we can do at this point. It just seems to me the voters were not informed well about this possibility. Just my opinion. Since getting the team was the big reason touted by the good ole boys at city hall, we should be able to rescind the vote also. Sort of a false advertising argument.

[betts]

I was aware of the possibility. I thought everyone was. I said multiple times that I thought the Ford Center needed to be upgraded regardless, and I saw other people saying the same.

Those who would like an NBA team in OKC should not assume all is lost regardless. Clay Bennett and the boys have the upper hand in this situation right now, as there is no mechanism whereby the NBA can force them to sell. A deal would have to be made for that to happen, and I suspect that deal would have to involve a team for OKC.