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On The Block
Ian Thomsen
February 06, 2006
A crucial date to determine the Sonics' future in Seattle looms, and the team's owner says he's prepared for the worst
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February 06, 2006

On The Block

A crucial date to determine the Sonics' future in Seattle looms, and the team's owner says he's prepared for the worst

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The next three weeks will be ripe with rumors of player movement. But the most intriguing negotiations will be held in Seattle, and they might lead to the relocation of the Sonics.

For the last three years the Sonics have been lobbying the Seattle city council for a more favorable lease on KeyArena, as well as for funds to either refurbish the 10-year-old building or build a new facility. By the middle of the month a six-person panel appointed by the mayor will issue a report endorsing the team's proposal to the city council and state legislature. That, however, would leave the legislature less than a month to study the report and vote on a bill that would earmark $200 million for the team when its lease expires in 2010. If the money isn't appropriated by March 9, the last day of the legislative session, the team will have to wait until January to appeal to the legislature again. Don't expect Sonics officials to spend those 10 months sitting on their hands. "We've instructed [team president] Wally [Walker] to look at all alternatives," principal owner Howard Schultz told SI on Sunday in his first extended interview on the subject. "You don't have to be that smart to understand what that might mean."

One of those alternatives would be to investigate the construction of a privately built arena in Greater Seattle, perhaps in suburban Bellevue. Another would be to move the Sonics to a market known to be interested in acquiring an NBA franchise ( Las Vegas, Norfolk, Oklahoma City) or to one of the three cities-- Anaheim, Kansas City and San Jose--that, according to team sources, have privately made overtures to Sonics officials. In a meeting arranged by their friend, former NFL star Ronnie Lott, Walker and San Jose Sharks president Greg Jamison met last month to discuss the Sonics' potential move to HP Pavilion, a 18,500-seat facility built in 1993 for hockey. The facility is seeking an NBA tenant after having served as the temporary home for the Warriors in 1996--97 while The Arena in Oakland was being renovated.

Team sources say that because the owners are entrenched in the community-- Schultz is chairman of Seattle-based Starbucks--they are unlikely to ruin their local reputations by moving the city's oldest major-league sports franchise. What they will strongly consider, the sources say, is a third option: to sell to an outside buyer, who might not hesitate to relocate. One of the team's 57 minority owners estimates that the Sonics could be had "for somewhere in the high 300s," the going rate for a franchise based on the sales of the Celtics ($360 million), Suns ($401 million) and Cavaliers ($375 million) over the last five years.

If the team goes on the market, Schultz says that he will seek the highest price on behalf of the minority owners, who have shared in losses of $58 million since 2001, including a '05 cash call that forced them to write checks totaling $17 million. "Our first choice has been and continues to be to stay here," says Schultz, who bought the Sonics and the WNBA's Seattle Storm in '01 for $200 million. "We didn't set out five years ago to be in the position to either move the team or sell it. But this is not a sustainable enterprise."

According to commissioner David Stern, the Sonics have the "least attractive building arrangement in the NBA." Last year Schultz's group paid $8.3 million in suite rentals and club ticket sales, concessions, parking and other revenue to the city--money that most NBA teams get to keep. That, says the owner, has contributed to the team's $50.1 million payroll, fifth-lowest in the league. After 2010, however, he is asking that the Sonics be permitted to pocket all those payments and that they play in a larger facility than Key, which lacks the space for the lucrative dining and entertainment facilities found in most modern NBA arenas. "All we want is what the other two teams have already been given,"says Schultz, referring to the $636 million that Seattle has provided in the last decade to fund new stadiums for the Seahawks and the Mariners.

The Sonics face a formidable opponent in newly appointed council president Nick Licata, who describes the team's requests as "excessive" and the owners as unwilling to compromise. A vocal opponent of the baseball and football stadium deals, Licata--who does admit that his views are more hard-line than those of many of his colleagues--believes that the city would suffer no lasting damage from the Sonics' departure. "On an economic basis, near zero," he says of the impact of a move. "On a cultural basis, close to zero. We would still have two sports, and plenty of cities our size don't have three."

The Sonics aren't the only team with arena issues. In addition to the Hornets' unsettled future in New Orleans, the Magic is in discussions with Orlando to develop a new facility, though the team says it has no plans to move. A senior NBA official says the league is worried that the Kings might leave Sacramento because they have been unable to come to terms with the city on a new publicly financed arena, though co-owner Joe Maloof says he is now pursuing private financing.

Says Shultz, "I love this city, and it would be a real tragedy if we were put in a position [in which] the Sonics have to leave. But at some point you've got to just put your hands up and say, 'O.K., we surrender.'"


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