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News » Sonics think $10M should buy out Seattle lease 2008-06-13

Sonics think $10M should buy out Seattle lease 2008-06-13

Sonics think $10M should buy out Seattle lease 2008-06-13
SEATTLE (AP) - Seattle has already rejected owner Clay Bennett's $26 million offer to take his SuperSonics to Oklahoma City immediately.

Now the Sonics are trying to make that deal look sweet compared to what could be coming.

Seattle's oldest professional sports franchise, with 41 years in town, is seeking to break the final two years of its lease at KeyArena by paying the city a sum of no more than $10 million - $5.1 million for the 2008-09 season and $4.9 million for 2009-2010 - which the team believes would satisfy the rental agreement with the arena.

That is one of the new key assertions in the trial brief filed for the team's upcoming court battle with the city of Seattle.

The Sonics' brief states they lost $30 million this past season when they were 20-62, their worst record. It also asserts the team's dispute with the city is a garden variety tenant-landlord impasse that should not require "specific performance."

The city, which also filed its brief Wednesday, argues the lease explicitly requires "specific performance" - that is, the Sonics need to play in KeyArena until 2010.

U.S. District Judge Marsha Pechman is presiding over the non-jury trial that is scheduled to begin Monday and wrap up June 26. Pechman issued a statement Thursday that she will not issue a verdict on the final day. She will first take time to finish a written verdict, which she will read in open court on a date to be announced.

"Leases are generally not specifically enforceable," reads the first sentence of the Sonics' trial brief. "Damages in the form of rent make the landlord whole."

The city counters in its brief that if the Sonics leave early, it will lose intangible benefits, such as civic pride, that can't be quantified or paid off like rent. And "specific performance" is required within the team's arena lease with Seattle, signed in 1994, which Bennett's Professional Basketball Club LLC agreed to honor when it bought the team in 2006. The lease is effective through the 2009-2010 season.

"The obligations of the parties to this Agreement are unique in nature; this Agreement may be specifically enforced by either party," states Section 27, paragraph L of the lease.

Steve Calandrillo, a contract law professor at the University of Washington Law School, said the judge will have to balance the general rule that courts don't usually grant "specific performance" - meaning they don't force parties to fulfill contract obligations against their will - with the language of the Sonics' lease.

"What it all comes down to is, is specific performance available?" he said. "The Sonics are making a compelling case that in lease disputes, specific performance is not appropriate. But the city of Seattle also has the compelling response that the lease calls for specific performance, which is rare."

The Sonics' brief states the team's partnership with the city of Seattle is broken beyond repair.

"The facts show it is time to end the relationship, not continue it by force. Both parties will be worse off financially with forced performance," the brief said.

In a deposition taken in April, Bennett testified he and his co-owners would lose between $61 million and $65 million if forced to play in Seattle for two "lame-duck" seasons. Bennett said the Sonics would make $18.8 million should the court allow the team to play in his hometown beginning this fall.

"While the city relies on the interests of the public at large, the public is not a party to the lease. As nonparties, their interests are legally irrelevant," the team's brief states.

"The great majority of the public has a yawning indifference to the Sonics' departure," the brief adds.

While attendance decreased last season to 28th in the league, the team still officially drew an average of 13,355 fans per game - 78 percent of capacity in the NBA's smallest venue.

The Sonics' brief says the actual in-house attendance per game was 9,146 last season. The team says that 28 percent of ticket holders paid for a seat but didn't go to the game.

"In other words, nearly one-third of those who paid for a ticket did not attend," the brief states. "This is, unfortunately, compelling evidence of the level of disinterest."

The decrease in attendance came after the Sonics traded Ray Allen, their only All-Star now playing in the NBA finals for Boston, and let second-leading scorer Rashard Lewis go to Orlando in a sign-and-trade deal. Seattle fans were left with Kevin Durant, the eventual rookie of the year, and players who were inexperienced, injured or fading with expiring contracts.

The brief also warned that if Pechman rules against the Sonics, she will be creating more work for her court.

"If forced to stay, the PBC may be forced to drastically alter its business methods," the team said. "There is little doubt that this would involve the court in a challenge to the team's business methods."

The team reiterated its belief the city is trying through "forced bleeding" to push Bennett into selling to more Seattle-friendly investors - such as previously interested Microsoft Corp. Chief Executive Steve Ballmer, who is mentioned by name later in the brief.

The brief also reminded the court that the Sonics under Bennett's ownership will leave Seattle after the lease expires in 2010 anyway, since the NBA has already approved the team's move to Oklahoma City.


Author: Fox Sports
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Added: June 13, 2008


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