The Sonics' 41-year run in Seattle ended Wednesday with a legal settlement that will let owner Clay Bennett take the team immediately to...
The Sonics’ 41-year run in Seattle ended Wednesday with a legal settlement that will let owner Clay Bennett take the team immediately to Oklahoma City in exchange for a $45 million payment — and Seattle gets no promise of a replacement team.
The deal came together just hours before U.S. District Judge Marsha Pechman was scheduled to issue her ruling in the federal lawsuit Seattle had filed to try to force Bennett to play out the final two seasons on his KeyArena lease.
The settlement, announced at simultaneous news conferences in Seattle and Oklahoma City, requires Bennett to pay Seattle $45 million immediately and $30 million more in five years if the city doesn’t get a new team.
“We made it. Congratulations,” Bennett said to applause at a news conference in Oklahoma City. “The NBA will be in Oklahoma City next season, playing their games.”
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He added: “The transition and move of the operation of this team begins tomorrow morning.”
The Oklahoma team will play under a different name, with the Sonics’ history and colors to remain in Seattle.
One major complication remains: the lawsuit filed by former Sonics owner Howard Schultz, who has accused Bennett of violating a promise to try to keep the Sonics in Seattle. Schultz wants the team restored to local ownership.
“Our lawsuit is separate,” said Richard Yarmuth, Schultz’s attorney. “We are not a party to the settlement and in fact, we chose not to participate.”
But Wednesday’s settlement could put Schultz’s lawsuit at odds with Seattle. If that lawsuit delays or stops the Sonics’ move to Oklahoma, Seattle would have to pay back all or part of Bennett’s settlement.
Brad Keller, the lead Seattle attorney for the Sonics, called the Schultz case “a far-fetched legal remedy sought by someone trying to salvage a tarnished reputation.”
Seattle Mayor Greg Nickels defended the city’s settlement — which was larger than the $26.5 million offered by Bennett in February — saying it will give Seattle a real chance to secure another NBA team for KeyArena. The City Council is likely to approve the settlement at its July 14 meeting.
“We’ll never know, but we’re confident the judge would have ruled in our favor,” Nickels said. “But in the end of the day, all that would have given us was two years. At the end of the two years, we would have had a very bad relationship with the league, no team and really no prospects.”
City officials began negotiations with Sonics owners three weeks ago, Deputy Mayor Tim Ceis said. He said he did not recall which side asked to start talks.
Nickels was joined at Wednesday’s news conference by Seattle developer Matt Griffin, who said the investor group led by Microsoft CEO Steve Ballmer would continue to work on buying a new team.
But getting another NBA team, Nickels said, will be possible only if the Legislature authorizes money for a $300 million KeyArena expansion by the end of 2009.
“The city is ready to do its part. Local investors have stepped up. Now the state Legislature must act,” Nickels said.
If the Legislature fails to authorize $75 million toward the KeyArena project by the end of next year, Bennett will not have to pay the city the additional $30 million owed under the settlement.
Gov. Christine Gregoire said in a written statement she was “disappointed that the team is leaving Seattle,” and it was time for the Legislature to “get to work” on an arena plan. A legislative task force will meet this month to study whether King County taxes on car rentals and restaurants — now devoted to paying off the debt on Safeco Field — can be used for KeyArena.
Despite the last-minute settlement, Nickels and other city leaders insisted they were confident in the city’s legal case, handled largely by the law firm K&L Gates.
The city had argued throughout a six-day federal trial that the value of the Sonics to Seattle could not be compensated by a cash payment to the city.
University of Washington law professor Steve Calandrillo said the settlement makes it look like the city feared Pechman would reject that argument.
“I think the real problem here was just that the city of Seattle was not looking at a very favorable outcome,” said Calandrillo, who teaches contract law.
“It’s not an insignificant amount of money. Certainly this kind of a settlement is far more favorable than rolling the dice with Judge Pechman,” said Calandrillo, who noted that courts are usually inclined to rule that money is an adequate remedy in such lease disputes.
“For the many thousands of Sonics fans who have been deeply committed to the future of this team in Seattle, this is not a happy day,” said City Council President Richard Conlin. “This is a sad day for them.”
Conlin said while the city has a “good shot” of getting another team, “I don’t want to give anyone false hope. A good shot is 50-50.”
The Legislature has rejected four separate proposals to devote taxpayer money to an arena for the Sonics, and there is no guarantee that will change.
Save Our Sonics co-founder Brian Robinson said the settlement was “certainly not a win” for Sonics fans. “There is a little bit of hope and a silver lining,” he said. But if Nickels and Gregoire don’t follow up on an arena plan, “then it was just a sellout, plain and simple.”
Former Sonics minority owner Ken Woolcott, who owned a small piece of the team in the Schultz group, called Wednesday’s settlement “tragic.”
“They must have had a pretty poor case in their mind to settle for $45 million,” Woolcott said.
He noted that the Schultz group first started trying to get a KeyArena upgrade nearly five years ago. “We’re no better off now — except that we don’t have a team.”
But Nickels said a key element of the settlement for the city was a statement by the NBA that a renovated KeyArena could work for professional basketball — an idea Bennett had refused to consider. Bennett had demanded a new $500 million arena in Renton, paid for mostly with tax dollars.
NBA Commissioner David Stern issued a statement saying the league believes “KeyArena could be properly renovated into a facility that meets NBA standards.” The NBA also agreed to inform the city and Ballmer when teams come up for sale, but there is no guarantee a team will be available or that Seattle would get the first shot.
The settlement was greeted with enthusiasm in Oklahoma City, which has long sought its first permanent professional sports team. The city hosted the New Orleans Hornets for two seasons after Hurricane Katrina.
“We’re excited,” Oklahoma City Mayor Mick Cornett said in a phone interview. “To have them coming early is exciting. Someone needs to pinch me.”
Bennett, vilified in Seattle since buying the Sonics, said at his news conference: “I don’t feel, standing here today, victorious. I feel certainty and I’m glad what’s behind us is now behind us.”
He teared up when thanking his family: “Maybe a championship will repay this.”
Staff reporters Percy Allen and Jonathan Martin contributed to this report. Jim Brunner: 206-515-5628 or email@example.com