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The ownership group filed a motion saying that the lawsuit and the release of the emails by the city were to drive up the cost of leaving Seattle and force the ownership group to sell the team. ], lead attorney for the city, responded by pointing out that it was PBC that started the fight that led to the lawsuit when they filed for arbitration to break the lease.<ref>{{cite news | url=http://seattletimes.nwsource.com/html/sonics/2004357448_sonics18m.html | title=Clay Bennett fires back, says lease lawsuit is a ruse to force sale of Sonics | work=The Seattle Times | author=Jim Brunner | date=2008-04-18 | accessdate=2008-04-18}}</ref> Stern referred to the litigious efforts to keep the franchise in Seattle until 2010 as a "]" approach and said that the team will stay as long as mandated by the courts, but no longer.<ref name="Approved">{{cite web|url=http://www.nytimes.com/2008/04/19/sports/basketball/19sonics.html|title=Sonics Given Approval to Move to Oklahoma|accessdate=2008-04-20|publisher=]}}</ref> On ], Gorton said he would be open to a settlement if the league promised a replacement team for Seattle. He stated it was "highly unlikely" that the Sonics would stay and indicated the city should instead focus on gaining a replacement team, but noted that local governments would need to be willing to fund an expansion of KeyArena first.<ref>{{cite web | url= http://seattlepi.nwsource.com/basketball/360032_arena22.html| title = Slade Gorton: Goal now is finding a replacement for Sonics| accessdate = 2008-04-22| publisher = Seattle Post-Intelligencer}}</ref> | The ownership group filed a motion saying that the lawsuit and the release of the emails by the city were to drive up the cost of leaving Seattle and force the ownership group to sell the team. ], lead attorney for the city, responded by pointing out that it was PBC that started the fight that led to the lawsuit when they filed for arbitration to break the lease.<ref>{{cite news | url=http://seattletimes.nwsource.com/html/sonics/2004357448_sonics18m.html | title=Clay Bennett fires back, says lease lawsuit is a ruse to force sale of Sonics | work=The Seattle Times | author=Jim Brunner | date=2008-04-18 | accessdate=2008-04-18}}</ref> Stern referred to the litigious efforts to keep the franchise in Seattle until 2010 as a "]" approach and said that the team will stay as long as mandated by the courts, but no longer.<ref name="Approved">{{cite web|url=http://www.nytimes.com/2008/04/19/sports/basketball/19sonics.html|title=Sonics Given Approval to Move to Oklahoma|accessdate=2008-04-20|publisher=]}}</ref> On ], Gorton said he would be open to a settlement if the league promised a replacement team for Seattle. He stated it was "highly unlikely" that the Sonics would stay and indicated the city should instead focus on gaining a replacement team, but noted that local governments would need to be willing to fund an expansion of KeyArena first.<ref>{{cite web | url= http://seattlepi.nwsource.com/basketball/360032_arena22.html| title = Slade Gorton: Goal now is finding a replacement for Sonics| accessdate = 2008-04-22| publisher = Seattle Post-Intelligencer}}</ref> | ||
On ], Schultz filed suit in Seattle at the U.S. District Court for the Western District of Washington. The filing seeks remedial action for alleged fraudulent inducement by PBC at the time of the sale by BCOS to PBC. Schultz seeks, among other things, that the court grant an injunction preventing the Sonics being relocated from Seattle to Oklahoma City. The suit further requests that the franchise be placed in a constructive trust and no longer in the ownership of PBC.<ref>{{cite web|url=http://assets.espn.go.com/media/pdf/080422/bcos_litigation.pdf|title=''BCOS, LLC v. PBC, LLC'' -- complaint for relief arising out of fraud and misrepresentation|accessdate=2008-04-22|publisher=]}}</ref> | On ], Schultz filed suit in Seattle at the U.S. District Court for the Western District of Washington. The filing seeks remedial action for alleged fraudulent inducement by PBC at the time of the sale by BCOS to PBC. Schultz seeks, among other things, that the court grant an injunction preventing the Sonics being relocated from Seattle to Oklahoma City. The suit further requests that the franchise be placed in a constructive trust and no longer in the ownership of PBC.<ref>{{cite web|url=http://assets.espn.go.com/media/pdf/080422/bcos_litigation.pdf|title=''BCOS, LLC v. PBC, LLC'' -- complaint for relief arising out of fraud and misrepresentation|accessdate=2008-04-22|publisher=]}}</ref>]-based attorney and ] senior writer Lester Munson said that while the remedies Schultz sought were "without precedent in the sports industry", he did believe that both the Schultz case and Seattle's lease case presented "serious problems" for Bennett and had "some chance of success". He gave the case over the ownership of the team a 55-60 percent chance of winning.<ref>{{cite web|url=http://sports.espn.go.com/nba/columns/story?id=3362659|title=E-mails key in Schultz's suit to reverse Sonics sale|accessdate=2008-04-22|publisher=]}}</ref><ref>{{cite web| url = http://www.kjram.com/cc-common/podcast/single_podcast.html?podcast=softy.xml | title = | ||
Dave Softy Mahler OnDemand | accessdate= 2008-05-03 | publisher = kjram.com}}</ref> | |||
On April 23rd, in response to PBC's request to add additional issues to the trial, Lawyers for the city of Seattle requested a six month delay in the June 16th trial date in order to prepare for the additional issues. The city argued that the Sonics' request would "dramatically change the scope" of the case and would require considerable preparation time to determine damages.<ref>{{cite web|url=http://seattlepi.nwsource.com/basketball/361333_arena01.html|title=City may ask delay in Sonics trial|last=Johns|first=Greg|publisher=Seattle Post-Intelligencer|accessdate=2008-05-03}}</ref> | On April 23rd, in response to PBC's request to add additional issues to the trial, Lawyers for the city of Seattle requested a six month delay in the June 16th trial date in order to prepare for the additional issues. The city argued that the Sonics' request would "dramatically change the scope" of the case and would require considerable preparation time to determine damages.<ref>{{cite web|url=http://seattlepi.nwsource.com/basketball/361333_arena01.html|title=City may ask delay in Sonics trial|last=Johns|first=Greg|publisher=Seattle Post-Intelligencer|accessdate=2008-05-03}}</ref> | ||
Revision as of 06:27, 5 May 2008
The Seattle SuperSonics possible relocation to Oklahoma City is an effort by the ownership group of the Seattle Sonics to move the team to Oklahoma City. If successful, the team would become the third NBA franchise to relocate in the past decade.
The effort began in 2006, when the Seattle Sonics were sold to an investment group led by Oklahoma City businessman Clayton Bennett. Bennett's group, Professional Basketball LLC (PBC), said the team would stay in Seattle if a new arena complex was built. After trying to persuade the Washington state and local governments to fund a US$500 million arena complex in Renton, Washington, Bennett notified the NBA that he intended to move the team to Oklahoma City and requested arbitration with the City of Seattle to be released from their lease with KeyArena. When the arbitration request was rejected by a judge, the City of Seattle sued Bennett's ownership group to force them to stay until the end of the lease.
The release of the ownership group's internal emails showed that at least some of the members were talking about moving the team to Oklahoma City prior to the purchase. In response, the city accused the ownership of failing to negotiate in good faith and former owner Howard Schultz filed suit to get the team back based on charges of fraud and misrepresentation. Bennett's attorney's filed a motion accusing the city of duplicity, and said that the city had deliberately attempted to increase the cost of the move, and force them to sell to a local ownership group led by Microsoft CEO Steve Ballmer. In April 2008, the move for the 2008-2009 season only was given conditional approval by the NBA Board of Governors pending the outcome of litigation over the lease and ownership of the team.
Sale of team
On July 18, 2006, the Basketball Club of Seattle, led by Howard Schultz, sold the Seattle SuperSonics and Seattle Storm after failing to reach an agreement with the City of Seattle over a publicly-funded $220 million expansion of KeyArena. The group said it had lost large amounts of money because of the limitations of the arena, which was constructed in 1995, and is the NBA's smallest venue, seating 17,098 for basketball. The sale to Clay Bennett's group for $350 million was approved by NBA owners on October 24, 2006.
Bennett advocated using tax money to pay for a new $500 million arena in a Seattle suburb, but left the door open for other ideas. After little interest from lawmakers, Bennett offered to buy the remainder of the team's lease with KeyArena and said on November 2, 2007 that unless a project for a new arena was approved by October 31, the team would move to Oklahoma City. Seattle's mayor, Greg Nickels, replied that the Sonics were expected to stay in Seattle until their lease expired in 2010, but that the city remained open to expanding KeyArena. Over concerns that the city would accept a buyout of the lease, a grassroots group filed a citywide initiative that sought to prevent the city from accepting such an offer from Bennett's group. The Seattle City Council later unanimously passed an ordinance modeled after the initiative.
On August 13, 2007, Aubrey McClendon, a minor partner of the ownership group, said in an interview that the team was not purchased to keep it in Seattle but to bring it to Oklahoma City. Bennett later denied such intentions, saying McClendon "was not speaking on behalf of the ownership group." Due to his comments, McClendon was fined $250,000 by the NBA.
Relocation effort
On September 21, Bennett applied for arbitration on the issue of whether the team could break its lease in 2008. Since the lease does not allow for arbitration on the issue of occupancy, the City of Seattle filed on September 24 for declaratory relief in King County Superior court requesting that the court issue a judgment enforcing the Specific Performance Clause, rejecting the arbitration request, and the awarding of legal fees as spelled out in the agreement. On October 29, The US District Court Judge Ricardo Martinez denied the request for arbitration, saying that the "arguments ignore the clear language of Article II which states that PBC’s use and occupancy rights with respect to the Premises and the Term of this Agreement shall end on September 30, 2010.”
When the October 31 deadline passed for public financing of a new arena, Bennett publicly announced the relocation process by informing NBA commissioner David Stern on November 2 that it was the ownership group's intention to move the team to Oklahoma City once the team is free of its KeyArena lease. Bennett also rejected attempts by a local group to repurchase the Sonics.
On February 15, 2008, the Sonics' ownership group gave the City of Seattle a one-day deadline to accept a $26.5 million offer that would buyout the Sonics' lease in KeyArena and pay off what the ownership group claimed was the value of debts on the arena. The city rejected the offer.
The prospect of expanding KeyArena resurfaced on March 6, 2008, when Microsoft CEO Steve Ballmer promised that his investor group would pay half of the $300 million needed for an extensive renovation; the rest was to be provided by the city and county. However, when the state did not give approval for the county to provide funds by an April 10 deadline, Seattle mayor Greg Nickles said that the effort had failed and the city's hopes rested in its lawsuit.
Oklahoma City
In anticipation of an NBA team, Oklahoma City voters approved renovation of the Ford Center on March 3, 2008, including construction of a new NBA practice facility. After a tour of downtown Oklahoma City, a subcommittee of three NBA owners reccomended that the league approve the move. On March 14, Bennett reached a preliminary agreement with Oklahoma City on a 15-year lease of the Ford Center, which would be presented to the city council and become official upon termination of the Key Arena lease. The Oklahoma City Council and Sonics’ ownership finalized a lease agreement two weeks later, which included a provision that the team use “Oklahoma City” in its team name. The Oklahoma State Legislature later approved a bill to provide tax breaks and other incentives if the team relocated.
When asked about granting an expansion team to Seattle if the Sonics relocated to Oklahoma City on March 27, Stern said he would allow speculation to grow in whatever way is constructive, but expansion is not a high priority for the league. He reaffirmed in April that Seattle will probably not be given an expansion team in the near future, but Bennett's group said in March that if the league did expand in Seattle, the SuperSonics name and franchise history could be released.
NBA owners gave conditional approval of a potential Seattle SuperSonics' relocation to Oklahoma City on April 18, 2008 in a 28-2 vote by the league's Board of Governors, with only Mark Cuban of the Dallas Mavericks and Paul Allen of the Portland Trail Blazers voting against the move. The approval means the Sonics could move to Oklahoma City's Ford Center for the 2008-2009 season if it can break at its lease with KeyArena after paying a $30 million relocation fee.
Lawsuits
Seattle filed a lawsuit on September 23, 2007, two days after Bennett filed for arbitration, in an attempt to keep the Sonics from leaving before the end of their lease in 2010. The trial was set for June 16, 2008. On April 10, 2008 the city of Seattle asked the Federal District Court to order the NBA to release documents related to the financial situation of each team, the claim that the SuperSonic's lease with KeyArena is financially unworkable, and documents associated with the league's involvement in requiring the Sonics to make a good-faith effort to stay in Seattle. The city hoped the documents would aid in building its legal case, and cited an email conversation among members of the ownership group that suggested they were privately discussing intent to move the team while publicly insisting that they would not attempt to do so. The emails also prompted former Sonics owner, Howard Schultz, to file a lawsuit that would seek to rescind the sale of the team, alleging Bennett's group used fraud and misrepresentation to purchase the team and did not make a "good faith effort" to keep Sonics in Seattle as mandated by the sales contract. However, Bennett said the emails were misinterpreted and that he has spent millions of dollars in attempting to keep the team in Seattle. Legal experts contacted by the Seattle Post-Intelligencer, prior to details of the suit becoming known, said Schultz's lawsuit was highly unlikely to succeed.
The ownership group filed a motion saying that the lawsuit and the release of the emails by the city were to drive up the cost of leaving Seattle and force the ownership group to sell the team. Slade Gorton, lead attorney for the city, responded by pointing out that it was PBC that started the fight that led to the lawsuit when they filed for arbitration to break the lease. Stern referred to the litigious efforts to keep the franchise in Seattle until 2010 as a "scorched-earth" approach and said that the team will stay as long as mandated by the courts, but no longer. On April 21, Gorton said he would be open to a settlement if the league promised a replacement team for Seattle. He stated it was "highly unlikely" that the Sonics would stay and indicated the city should instead focus on gaining a replacement team, but noted that local governments would need to be willing to fund an expansion of KeyArena first.
On April 22, Schultz filed suit in Seattle at the U.S. District Court for the Western District of Washington. The filing seeks remedial action for alleged fraudulent inducement by PBC at the time of the sale by BCOS to PBC. Schultz seeks, among other things, that the court grant an injunction preventing the Sonics being relocated from Seattle to Oklahoma City. The suit further requests that the franchise be placed in a constructive trust and no longer in the ownership of PBC.Chicago-based attorney and ESPN senior writer Lester Munson said that while the remedies Schultz sought were "without precedent in the sports industry", he did believe that both the Schultz case and Seattle's lease case presented "serious problems" for Bennett and had "some chance of success". He gave the case over the ownership of the team a 55-60 percent chance of winning. On April 23rd, in response to PBC's request to add additional issues to the trial, Lawyers for the city of Seattle requested a six month delay in the June 16th trial date in order to prepare for the additional issues. The city argued that the Sonics' request would "dramatically change the scope" of the case and would require considerable preparation time to determine damages.
References
- "Sonics tell NBA of intent to move SuperSonics to Oklahoma City". ESPN.com. November 3, 2007. Retrieved 2008-04-25.
{{cite news}}
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(help) - ^ Galloway, Angela (July 18, 2006). "Sonics sold to ownership group from Oklahoma City". Seattle Post-Intelligencer. Retrieved 2006-07-18.
{{cite news}}
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ignored (|author=
suggested) (help) - "KeyArena Information". NBA.com. Retrieved 2008-04-25.
- ^ Associated Press (July 19, 2007). "Owner: Okla. City chosen destination if no arena deal reached". USA TODAY. Retrieved 2007-07-20.
- "NBA approves sale of Sonics, Storm". ESPN. October 24, 2006. Retrieved 2006-10-25.
- Johns, Greg (2007-11-02). "Bennett says Sonics going to Oklahoma". Seattle Post-Intelligencer. Retrieved 2007-11-03.
- Jim Brunner (2007-07-27). "Initiative aimed at holding Sonics to KeyArena lease". The Seattle Times. Retrieved 2008-02-23.
- Jim Brunner (2007-09-11). "Council votes 8-0 to enforce Sonics' lease". The Seattle Times. Retrieved 2008-02-23.
- Percey Allen (2007-08-23). "Sonics co-owner McClendon fined $250K". Seattle Times. Retrieved 2008-03-10.
- "NBA Sonics seek arbitration to escape Seattle lease". AFP. Google. 2007-09-21. Retrieved 2008-03-26.
- City of Seattle v. Prof'l Basketball Club, LLC, No. C07-1620RSM, 2007 WL 3217556, at *3 (W.D. Wash. Oct. 29, 2007).
- Id. at *4.
- Greg Johns (2007-11-02). "Bennett says Sonics going to Oklahoma". Seattle Post-Intelligencer. Retrieved 2007-11-15.
{{cite news}}
: Check date values in:|date=
(help) - Greg Johns (2008-02-18). "Council leaves door open to buyout". Seattle Post-Intelligencer. Retrieved 2008-02-22.
- "Mayor Nickels announces local effort to buy Sonics, renovate KeyArena". City of Seattle. 2008-03-06. Retrieved 2008-03-26.
- ^ "Seattle mayor: Local investors' KeyArena deal won't happen". The Olympian News Tribune. 2008-04-09. Retrieved 2008-04-10.
- "NBA subcommittee approves Oklahoma City plans for Sonics". ESPN. 2008-03-26. Retrieved 2008-03-26.
- Jojo Doria (2008-03-15). "Sonics, Oklahoma City Reach Preliminary Deal On Ford Center". All Headline News. Retrieved 2008-03-15.
- "Terms for Sonics' move includes clause that team name have Oklahoma City". ESPN.com. Retrieved 2008-04-30.
- Jim Brunner (2008-03-15). "Oklahoma's Sonics offer gets sweeter all the time". The Seattle Times. Retrieved 2008-03-15.
- Darnell Mayberry (2008-03-28). "Stern noncommittal on Seattle expansion". The Oklahoman. Retrieved 2008-03-30.
- ^ "Sonics Given Approval to Move to Oklahoma". New York Times. Retrieved 2008-04-20.
- "Report: Sonics willing to leave name, history behind". ESPN. 2008-03-25. Retrieved 2008-03-26.
- Greg Johns (2007-09-24). "City sues Sonics to enforce arena lease". Seattle Post-Intelligencer. Retrieved 2008-04-22.
{{cite news}}
: Check date values in:|date=
(help) - "E-mails suggest Sonics were thinking OKC in '07". ABC 11 News. 2008-04-10. Retrieved 2008-04-14.
- Percy Allen (2008-04-15). "Howard Schultz plans to sue Clay Bennett to get Sonics back". The Seattle Times. Retrieved 2008-04-15.
- Claudia Rowe (2008-04-16). "Legal experts call Schultz suit a long shot". Seattle Post-Intelligencer. Retrieved 2008-04-18.
- Jim Brunner (2008-04-18). "Clay Bennett fires back, says lease lawsuit is a ruse to force sale of Sonics". The Seattle Times. Retrieved 2008-04-18.
- "Slade Gorton: Goal now is finding a replacement for Sonics". Seattle Post-Intelligencer. Retrieved 2008-04-22.
- "BCOS, LLC v. PBC, LLC -- complaint for relief arising out of fraud and misrepresentation" (PDF). ESPN.com. Retrieved 2008-04-22.
- "E-mails key in Schultz's suit to reverse Sonics sale". ESPN.com. Retrieved 2008-04-22.
- "Dave Softy Mahler OnDemand". kjram.com. Retrieved 2008-05-03.
- Johns, Greg. "City may ask delay in Sonics trial". Seattle Post-Intelligencer. Retrieved 2008-05-03.