NBA Teams Sports Law

Will the Sonics Stay in Seattle?

Old Seattle LogoWill the oldest professional sports franchise in Seattle still be there next season? The City of Seattle and current owner Clay Bennet began day one of a six-day bench trial Monday, in the Federal District Court of Seattle. It now comes down to Judge Marsha Pechman to decide if the Sonics will stay in Seattle or if it is best to move the team to Oklahoma City.

Before discussing the trial, here is a little history on how the Sonics and the city of Seattle arrived in this predicament to begin with. The Seattle SuperSonics were founded in 1967, making them the oldest professional sports team in Seattle’s history. Seattle boasted the worst record in the league this year. The start to this tragic lawsuit began when former owner and Starbucks Coffee mogul, Howard Shultz sold the team to Clay Bennet for $350 million in 2006; Bennet is a wealthy businessman from Oklahoma City. Bennet agreed to and signed the lease, which specifically stated the team stays in Seattle until 2010. For some odd reason Bennet unloaded the team’s best players from the previous year while obtaining the #1 pick in the draft, future all-star Kevin Durant.

Since Bennet and his ownership group have been in charge of the team, he has received criticism for not finding funds to build a new stadium and for trading star Ray Allen to the world champion Boston Celtics in order to save money. The fan base for the Sonics drastically decreased over the past several years and talks of moving the team to chairman Bennet’s hometown of Oklahoma City only added fuel to the fire. Discussion about settling this dispute before Mondays court date remained hopeful, but neither side heard what they wanted to at the discussions.

Although Seattle has been making the team’s relocation a big deal, this is certainly not the first time that a team has attempted to move away from a decomposing city. The Cleveland Browns/Baltimore Ravens and owner Art Modell fought this battle in 1995, and baseball’s Los Angeles of Anaheim Angels (2005) most recently went through the same legal battle.

This case deals primarily with the area of contract law between the city of Seattle and Sonics owners, a typical landlord-tenant dispute. However, the underlying issue in this case, as in previous professional sport relocation cases, regards the “specific performance” clause in the city’s contract. Specific performance has to do with the team’s ownership group being forced (through a court order) to fulfill their contract obligations and lease at KeyArena in the city of Seattle for the remaining two years, until 2010.

KeyArena is the NBA’s smallest site; its dilapidated appearance is the smoking gun in this trial. The city, fans, players and even Bennet (maybe not whole heartedly) have all attempted to acquire funds for the arena or a new site in Washington State to move the team to. This case covers many highly controversial and debated issues between the ownership and the city of Seattle. The city’s main claim is that Bennet bought the team with the intentions of moving it away from Seattle and that he needs to honor the remaining two years on the lease or find further funds to renovate KeyArena.

Bennet claims that he has attempted to find funds from the City and other private sources to renovate the arena, but that has not gone smoothly. The Sonics owners argue that they are loosing more than $30 million a year by staying in Seattle, while a move to Oklahoma City would make them around $9 million a year. Bennet and his lawyers are asking that the specific performance remedy be ignored and that “equitable relief” not be given to Seattle, because the city and former owner Shultz “did not play fairly,” when the team was looking to relocate.

Ultimately this tough decision will come down to Judge Pechman and whatever outcome she believes will mediate the two sides the fairest. In usual landlord-tenant situations, the courts have ruled to end the relationship between both sides and have the tenant (Bennet and the owners) pay the landlord (the city of Seattle) the remaining amount of the lease, along with other accrued damages because of the tenant’s departure. However, this is anything but a “usual” landlord-tenant situation as it involves a whole city, an NBA franchise, and their entire fan base.

Each side will have fifteen hours to present their case to the judge over the next six days. The first to take the stand on Monday was Seattle Mayor Greg Nickels. Nickels was followed by ex Seattle Center director Virginia Anderson and KeyArena manager Jyo Singh. The controversial key witness, Clay Bennet, took the stand for three hours on Tuesday as both sides interrogated him on a panacea of issues from his absurd “lame duck” emails to his original intentions when buying the team. We also saw leading sports economist Andrew Zimbalist’s video taped deposition. Bennet will shortly be back on the stand after the videotape and will continue on the stand Wednesday.

Judge Pechman will be in charge of writing a decision briskly after June 26th. She can either decide to mandate the Sonics to Seattle for the remaining two years, or she could settle the dispute with monetary damages to the city of Seattle, leaving Bennet and the team to find a better situation elsewhere. Whatever decision she makes, it is likely that both sides would file an appeal on her ruling and attempt to settle the matter again in the ninth circuit court of appeals.

3 replies on “Will the Sonics Stay in Seattle?”

First of all you misspelled both the names of Clay Bennett and Howard Schultz and the team unloaded the best players not for “some odd reason”, but to make the team unappealing and detached from the Seattle fan base, and set themselves up to be competitive in 3 or 4 years in Oklahoma. Also Durant was the #2 overall pick in last years draft not #1.

Secondly, Seattle is a world class city and I don’t know how you can call it a decomposing city when it is one of the most beautiful cities in the country and has been an excellent NBA city for 41 years. Also, Bennett is trying to get out of the KeyArena lease, not due to the arena’s appearance, but due to lease terms that favor the city and the facilities lack of suite revenue. But more for his ulterior motive, to move the team to Oklahoma City.

Overall i don’t see how the judge can rule for the Bennett and the Sonics. Specific performance is only allowed when money damages are not adequate, and under unique circumstances. One of the Sonics’ own experts admitted that it would be very difficult to come up with a money figure to replace community service and civic pride and other intangibles such as the jobs provided in the city. Under contract law parties have the right to enter into a bad deal, and Bennett admitted he was aware of the bad deal and bad lease terms, therefore he should be bound.

However if one thing is for certain, is that the law is uncertain and different people have different interpretations. The judge deciding the case has absolutely no sports knowledge whatsoever and may care less, however the city is doing a good job of showing her what the team brings to the city, but the judge continuously has overruled objections from the city, which doesn’t look good.

I thought it was funny how the Sonics said they haven’t sold any tickets and nobody is renewing their seats and then a season ticket holder gets on the stand and says he is not being allowed to buy tickets and is being treated rudely by the team. All the financial damage suffered by the Sonics has been brought on by themselves, and Bennett even admitted he wouldn’t be damaged at all by losing all of the money.

In the end the judge has to apply facts to law, and there is no way of replacing the intangibles that the Sonics bring to the city besides basketball which she cannot ignore. This isn’t just your average landlord/tenant agreement that can be paid off with money damages. Hopefully it will turn out good for the city, and an arena will be built in the next two years. If the city ends up losing because of this inept judge, the city will most likely appeal which will take time, so you can count on the team playing next year in Seattle. Then there is still the matter of the Howard Schultz lawsuit, which alleges a lack of good faith after embarrassing e-mails were revealed that show Bennett never intended to keep the team in Seattle which may cause Bennett to lose the team and allow local ownership to take over and work out a KeyArena renovation, which Bennett has rejected several times.

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