Sonics released from lease after last-minute settlement

Jul 3, 2008 - 1:28 AM SEATTLE (Ticker) -- In a stunning turn of events, the Seattle SuperSonics have reached a deal with the city on Wednesday that will release the team from its lease at KeyArena and allow majority owner Clay Bennett to immediately move the franchise to his hometown of Oklahoma City.

News of the deal was announced on the federal court's web site just hours before U.S. District Judge Marsha Pechman was to issue her verdict on the six-day trial.

The two sides reached a deal in order to terminate the lease, which could be worth up to $75 million to the city.

However, if Seattle gets another team or Washington legislature authorizes at least $75 million of public funding for KeyArena renovations by the end of 2009, that number would be reduced to $45 million. If funding is not authorized, the city will received an additional payment of $30 million in 2013.

Seattle Mayor Greg Nickels signed a binding agreement Wednesday, which would be formalized on August 1.

"We believe this is a fair and appropriate resolution to the litigation involving the Sonics and the City of Seattle," Bennett said at a press conference in Oklahoma City.

"We are pleased that the uncertainty is lifted for our players, staff and Oklahoma City fans who can now make plans for the immediate future. We have a business to run, and this settlement allows us to make the best decision for the franchise and allow the city of Seattle to begin planning its own NBA future."

While Bennett held his press conference, Nickels spoke at a press conference in Seattle.

"Our goals in the city for this settlement were two: To protect the taxpayers investment at KeyArena and have a long-term future for basketball in Seattle," Nickels said.

Nickels said the $45 million will cover "rent and loss of tax revenue and allows us to pay off outstanding debt on KeyArena."

The settlement also addresses the lawsuit that former owner Howard Schultz filed against Bennett, whom he sold the team to for $350 million in 2006. Schultz contends Bennett failed to follow through on an agreement to try and secure a new arena in Seattle before relocating.

If the lawsuit prevents the team from playing its home games in Oklahoma City in the next two seasons, the city will repay Bennett's group $22.5 million for each season and the team will not owe the city the additional $30 million in 2013.

The settlement's document confirms that the Sonics name, logo and colors will remain available for a potential future NBA franchise in Seattle.

"I was always amenable, as part of a negotiation process, to reserving the name for Seattle fans," Bennett said. "I feel it's appropriate, and we wish Sonics fans and the city good luck in their efforts to develop a modern NBA arena and return pro basketball to Seattle in the future."

NBA Commissioner David Stern released a statement regarding the settlement.

"We are pleased that the Sonics and the city of Seattle have settled their litigation," he said. "While the decision has been made to relocate the Sonics to Oklahoma City, the NBA continues to regard Seattle as a first-class NBA city that is capable of serving as home for another NBA team."

Stern spoke more specifically about the NBA's possible future in Seattle.

"We understand that city, county and state officials are currently discussing a plan to substantially re-build KeyArena for the sum of $300 million," he said. "If this funding were authorized, we believe KeyArena could properly be renovated into a facility that meets NBA standards, relating to revenue generation, fan amenities, team facilities and the like.

"Assuming the funding can be committed, the league is willing to work with the city on the design and construction of the re-build to facilitate this result."

It was a very public trial between the Sonics and the city of Seattle, which had been seeking to hold the owners of the team to the remaining two years of the team's KeyArena lease.

As such, lawyers for the city obtained e-mails that show Bennett and his ownership group may not have been honest about their plans to keep the Sonics in Seattle.

Season ticket holders also had filed a class action lawsuit that contends they were tricked into buying tickets under the belief that the Sonics would be staying in the Pacific Northwest.

The Sonics have alleged that they are losing money at KeyArena, thereby necessitating a move to Oklahoma City.

The Sonics are the first NBA franchise to relocate since the Hornets left Charlotte for New Orleans in 2002. Ironically, the Hornets also spent parts of two seasons in Oklahoma City in the aftermath of Hurricane Katrina.

That short stint provided evidence that Oklahoma City was a competent basketball market with an enthusiastic fan base, prompting Bennett's exuberance about the move. But the Sonics will be leaving more behind than just familiar surroundings.

The 1979 NBA champions, the Sonics have left a rich history in Seattle, again appearing in the Finals in 1996 behind Gary Payton and Shawn Kemp. Their departure is a huge blow to NBA, which is abandoning Seattle's lucrative market for the obscurity of the Southwest.

Stern lauded Steve Ballmer and his group, Seattle Center Investors (SCI), managed by Seattle developer Matt Griffin for their efforts to in finding a solution which will return basketball to Seattle.

"The NBA will keep SCI and the city informed if opportunities arise in the next five years for franchise sale, relocation and/or expansion," Stern said. "Under the circumstances outlined above, the NBA would be happy to return to the city of Seattle."