NBA owners ignored some of the evidence provided by two independent firms, twisted some statistics and were swayed by fawning Oklahoman...
NEW YORK — NBA owners ignored some of the evidence provided by two independent firms, twisted some statistics and were swayed by fawning Oklahoman political and civic leaders when voting to approve the Sonics’ move to Oklahoma City.
“There was a gathering of community, business, private, municipal government support at the state and local levels in Oklahoma City that was very, very impressive, and that this ownership group in that city is very likely to be very successful,” commissioner David Stern said.
The owners voted 28-2 at Friday’s Board of Governors meeting in favor of the move, but the facts show it was not a good idea.
“If the numbers really pointed and said Oklahoma City is better for the NBA, then I’d be all for it,” Dallas Mavericks owner Mark Cuban said days before the meeting. “But they don’t. And it’s not even close. I just don’t see it.”
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Cuban voted against the move along with Portland Trail Blazers’ Paul Allen.
Documents obtained by The Seattle Times reveal the league’s relocation committee determined Seattle is a viable NBA market, but it gave unfavorable marks to Seattle because an aging KeyArena limits the Sonics’ ability to compete economically against the city’s two other professional sports franchises.
The seven-member committee unanimously concluded Oklahoma City was a better option for the Sonics because of the proposed $121 million renovation to Ford Center and the belief that a team in the Sooner State would not adversely affect the league.
“The committee believes that Seattle continues, based on its demographic and economic characteristics, to have the potential to be a profitable home territory for an NBA team. While that potential may in some respects appear stronger in Seattle than in Oklahoma City, the appearance is not currently the reality,” the committee’s report said.
“Due to a variety of circumstances, including the inadequacy of KeyArena, the inability of political leaders in Seattle and the state of Washington to support the construction of a satisfactory modern playing facility, and the dwindling support for the Sonics in Seattle from fans and sponsors, Seattle’s potential is not being realized.”
The committee was comprised of New Jersey Nets owner Lewis Katz, Indiana Pacers owner Herb Simon, Los Angeles Lakers vice president Jeanie Buss, San Antonio Spurs owner Peter Holt, Miami Heat managing general partner Micky Arison and owners Chris Cohan of the Golden State Warriors and Ed Snider of the Philadelphia 76ers. It commissioned McKinsey & Company, a leading economic consulting firm, and Desser Sports Media Inc. (DSM), a media and sports business consulting firm, to provide a statistical analysis of both cities.
The committee said Oklahoma City has a market population of 1.7 million and would be the second smallest in the NBA. The Seattle market ranks 14th in the league with a 4.6 million population.
However, the committee adjusted those figures based on population per major sports team. In the re-analysis, Oklahoma City ranks 13th in the NBA and Seattle, which is also the home of the Seahawks and Mariners, is 18th.
The committee also used adjusted numbers to evaluate income levels. Oklahoma City’s average per capita income is $38,000, which would rank 22nd in the NBA and it is $47,000 in Seattle, which ranks fifth.
However when per capita income is adjusted for local cost of living, Oklahoma City improves to $41,000, which would rank seventh in the league, and Seattle is $40,000, which drops it to 11th.
The television market broadcast and cable is substantially larger in Seattle by a 3-1 ratio, but the committee gave points to Oklahoma City because it has higher NBA ratings.
The committee determined Seattle has nearly five times as many Fortune 1000 companies, but the Sonics have a seven-year trend of declining ticket sales, culminating this season when the team sold 8,602 tickets per game, 28th in the NBA.
The Sonics provided projections by MZ Sports Inc., which estimated $26 million in losses this season and projected losses between $30 million to $33 million in each of the next two seasons if they have to remain at KeyArena, where the team receives no revenue from parking, 40 percent of revenue from suite sales and concessions and 60 percent of revenue from lower-bowl seats.
In Oklahoma City, the Sonics have a 15-year lease at Ford Center where the team retains all revenue from ticket and premium seat sales, merchandise sales, temporary signage, suite sales, naming rights and between a 40- to 45-percent split on food and beverage concessions.
In its report to the relocation committee, DSM said Oklahoma City would be the third-smallest television market in the NBA, less than a third the size of Seattle.
The firm also said the Sonics will receive $10.2 million in broadcast fees next season. DSM predicts the local media revenues to rise to $20.2 million for the 2009-10 season if the team is in Seattle, which is double what it predicts the team will receive in its first season in Oklahoma City.
McKinsey & Co. surmised Seattle was a better market than Oklahoma City based on demographic factors, economic outlook and business environment.
The firm, however, predicted Oklahoma City would benefit from being the only major professional sports team in its market and surmised the city has stronger fan support based on a June 2007 NBA survey, higher ratings on nationally televised NBA games and a three-year decline in Seattle in TV ratings and attendance.
Ultimately, the owners, who each receive $1.03 million from the Sonics as part of a $30 million relocation fee, chose to ignore some of the data and the recent struggles of teams in small markets — the Vancouver Grizzlies moved to Memphis and the Charlotte Hornets moved to New Orleans.
“There was a discussion which indicated that the board is familiar with the issue, but they focused on the likelihood of success of the Sonics in Oklahoma City,” Stern said.
The league’s constitution stipulates the Sonics must move before the 2008-09 season or else the team must re-submit a relocation bid.
Percy Allen: 206-464-2278 or firstname.lastname@example.org