Sports and the Law: Sonics Settle with Seattle; Moving to Oklahoma City
Yesterday, at 4 p.m. Pacific time, Judge Marsha Pechman was supposed to issue her ruling in City of Seattle v. Professional Basketball Club, LLC, regarding whether the City of Seattle could specifically enforce its lease agreement and require the Sonics basketball team to play in KeyArena through the 2009-10 season. After waiting more than an hour for Pechman’s ruling, however, it was finally announced that the parties had privately settled the matter.
According to several published reports, the City of Seattle agreed to allow Clay Bennett’s ownership group to get out of their lease, opening the door for the Sonics to immediately move to Bennett’s hometown of Oklahoma City, OK. In exchange, Bennett will have to pay the city $45 million in immediate damages, as well as potentially an additional $30 million in future damages, if the Washington legislature authorizes at least $75 million in public funding to renovate KeyArena and the City of Seattle still does not obtain a new NBA franchise by 2013.
Bennett’s ownership group will also have to leave the Sonics name and colors behind in Seattle — something the group probably does not mind in the least.
An assessment of the settlement, below the fold.
While this settlement is far better for the city of Seattle than Bennett’s original $26.5 million offer to Seattle Mayor Greg Nickels, the final settlement amount also shows that Seattle’s lawyers recognized their chances of keeping the Sonics were slim. Even if Judge Pechman had ultimately ruled for the city in this case, Bennett’s ownership group still would have likely moved the team to Oklahoma City after the KeyArena lease expired in 2010. During the lawsuit, bad blood between Bennett and the city only worsened, making an agreement between the parties to keep the team in Seattle even more remote.
Although former Sonics owner Howard Schultz recently brought a separate lawsuit seeking to rescind his sale of the Sonics to Bennett’s ownership group, as previously blogged about here, the chances of that lawsuit succeeding remain next to nil. While Schultz plans to fight on, it is highly unlikely that any court would unwind a fully-paid $350 million sale that was consummated more than two years ago. With the city now acceding to Bennett’s moving the Sonics, the idea of Judge Pechman later unwinding Schultz’s sale becomes all the more preposterous.
The official settlement order is available here (PDF).
Earlier: Don’t Cry Over Spilled Coffee; Schultz’s Sonics Sale Will Not Be Rescinded
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Marc Edelman is an attorney, business consultant, published author and professor, whose focus is on the fields of sports business and law. You can read his full bio by clicking here, and you can reach him by email by clicking here.
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This whole fiasco reflects Seattle in really poor light - Seattle was clearly unwilling to pony up the cash necessary to keep the Sonics in town but were unwilling to lose the Sonics at the same time. The relocation of this franchise to a city that actually wants it, is a very good thing.
I would much rather live in Seattle over Oklahoma City.
Seattle is one of the best cities in the United States.
I don't care about basketball, but Oklahoma deserves a pro team.
I do feel bad for Seattle fans given their teams' mediocre histories.
"Yesterday, at 4 P.M. PST, Judge Marsha Pechman ..." -- why is it so difficult for folks to understand and properly note daylight savings time (i.e. PDT, EDT, etc.)??
I would much rather live in Newark over Oklahoma City.
As a Seattle native and huge Sonics fan, last night was not a one-time embarassing incident. Rather, it is the culmination of a half a decade of failed political and business leadership in the state. We have a governor and mayor who are feeble and middling, and a shrewd businessman took advantage. Shame on Govenor Gregoire and Mayor Nickels.
The Supersonics were never the same after Malone and Stockton retired.
11:42 - For your information, Newark is America's Renaissance City.
Nickles is a college drop-out who somehow became mayor of one of the most educated cities in the US. His leadership is non-existent and a blight on the city. Bring back Norm Rice!
Either 11:52 is an idiot troll or brilliant -- I can't figure it out. Thoughts?
Seattle deserves to suffer after practically handing the Celtics the title last year.
12:03 - I thought the Spurs won in 2007.
I thought the Yankees beat the Lakers in last year's final?
These posts are awful. Yet the continue.
Lat, what do we have to do to get rid of this guy and his stupid MMQB/SATL posts?
- Please set up one of your lovely polls to ask your readers whether they like to read this pabulum
uh who cares! did anyone even know that seattle had an nba team (or any team for that matter). serves them right as 12:03 quite correctly points out. next case is minnesota timberwolves who gave the damn celtics the title. though i must agree that paul pearce is better than those two.
lets go YANKEES!
Why is it so difficult for folks to understand and properly note daylight saving time (and not daylight savings time)?
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
Seattle is a TTT. Oklahoma City has better restaurants, hipper bistros and better seafood. Also, they have their own oil and associated refineries, and gas prices are only about $1.75 a gallon. The latter is quite attractive in recruiting NBA talent. Further, OKC is central and makes traveling on the road easier. This deal makes much more sense.
Plus, Seattle can fill the arena will more Monster Truck Shows. If you were ever at the New Haven Memorial Coliseum, (RIP), you know of what I write.
May the Sonics never rise again.
Weird how one story magically disappears?
Yeah. Apparently it was a surprise that there were comments (admittedly, some nasty) on the wedding couples' looks.
12:06- i've already mentally moved onto the "next" nba year, (2008-09), so "last year" referred to 2007-08 season...
and yes let us go yankees, as a 4 game sweep and a tie in the Wildcard standing against the red sawx will ensue starting tonight
12:23--stop reading it if you don't like it. Lat's editorial choices are probably governed by page views.
Why should the governor of Washington have anything to do with a TTT private business? WE LIVE IN A FREE-MARKET SOCIETY!!! If you don't want the government regulating when things go well, you CANNOT then ask them to step in and save you when things go wrong. To do so would be TTT!
1:53--except that, by her own statements, the governor was trying to use the government to keep the sonics in town. If she had said "they are a private company, they can do what they want" your point would be well taken. But when she fails on her own terms--something she does frequently, see, e.g. the Alaska Way viaduct, congestion, a 33% expansion of state government spending leading to a $2.7bn deficit--all are right to question her leadership.
I agree that the Monday Morning QB articles were very annoying, largely because they had NOTHING to do with the law. But I find legal news involving sports to be interesting. This story is appropriate for the site.
This legal sports news is a hell of a lot more interesting that three layoffs at some firm in an unimportant city or the merger of one also-ran firm with another.
1:53:
The problem with that philosophy is that, as shown in this case, there are plenty of cities that will give corporate welfare to athletic teams. Thus, a city can have a purist attitutude like yours, but will thus lose out to other cities that do pay out. While I'm normally not in favor of welfare, tax breaks, etc. for big corporations, I make exceptions for professional sports. While it might sound cheesy, a professional sports team can bring a city together and provide something fun for residents to do forever. Thus it may actually be worth spending some public money.
The thing that bothers me most about this case though is:
I remember about 10-11 years ago when the Sonics moved out of their arena for a season and played in Tacoma so that the Arena could be rebuilt. While arenas do become outdated, 10-11 years seems like too short of a life span for an arena.
2:50 not in todays world anymore honey!
at least we'll know that March 21, 2008, was the last time we can say the Lakers beat the SuperSonics. http://www.youtube.com/watch?v=c4RY-eJgHHs