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View Full Version : OT: Sonics Suit Settled.



Angelo Roncalli
07-02-2008, 01:35 PM
It appears so.

http://blog.seattletimes.nwsource.com/sonicstrial/2008/07/godden_looks_like_a_settlement.html

Judge Pechman is scheduled to render her opinion at 4:00 PM. My guess is that the attorneys are putting the settlement on the record as I write and that her decision will not be issued.

The mayor will hold a news conference at 5:00.

My guess:

Seattle obtains rights to Sonics name and team colors and trade dress.

Bennett pays an amount in excess of the present value of payments due on the lease.

Sonics leave promptly for Oklahoma City.

A franchise either relocates to Seattle (Memphis or New Orleans) or Seattle is awarded the next NBA franchise (precedent for this with Seattle Mariners and Cleveland Browns). This is the tricky part because it requires involvement by entities not parties to the lawsuit.

Speaking of basketball lawsuits, there is a major motion scheduled for a hearing tomorrow in San Francisco Superior Court in the Jessie Evans v. USF wrongful termination/defamation case. Stay tuned.

a13coach
07-02-2008, 01:48 PM
The way the article is written indicates (well at least to me) that the mayor got cold feet. Did the mayor feel the ruling would not be in his favor or were the settlement terms that good that he felt it was a win-win?

229SintoZag
07-02-2008, 02:04 PM
Any settlement that allows them to take Durant to OKC is a loss for the citizens of Seattle in my book.

My guess is whatever happened, Howard Shultz had to sign off on, and drop his lawsuit as well. I agree with Pontiff that the NBA, thought not technically a party, would have to agree to do something to get Seattle a franchise in any reasonable settlement. If Nickels did not at least get that, he should be recalled, tarred and feathered.

So who will the new owners be?

75Zag
07-02-2008, 02:28 PM
Don't know whether the judge will announce her decision in light of this proposed settlement, but my money was on the Oklahoma City jerks to win the lawsuit. I have never heard of a legal ruling which required a tenant to stay in the leased premises for the duration of the lease. The standard remedy for "breach of lease" is money damages, not "specific performance". If Seattle settled as is rumored, I suspect it was because they thought they would lose everything (except the money damages) and they are looking to save face. If I am right, expect some pie-in-the-sky mutual commitment to use "best efforts" to move a team to Seattle "as soon as possible", even though David Stern said he would oppose any effort to place an NBA team in Seattle based upon the Seattle taxpayer's refusal to build a new arena at public expense. I would not be cashing in my 401k to buy tickets to the "new Sonics" just yet.

Areyoukiddingme
07-02-2008, 03:07 PM
Can you put any of the blame on Howard Shultz? He did sell the team to someone other than a local person.

Angelo Roncalli
07-02-2008, 03:16 PM
Can you put any of the blame on Howard Shultz? He did sell the team to someone other than a local person.

If you want to start pointing out those to whom blame should be assessed for the current state of affairs with the Sonics, you're going to need to need more arms than Shiva.

xjzico
07-02-2008, 03:20 PM
Schultz didn't sign off or drop his suit. The settlement is for $75 million and still requires approval from city council. According to a couple of rumors Steve Ballmer and the NBA were involved in the settlement.

Tmac5360
07-02-2008, 03:31 PM
About a year ago I heard an interview with David Stern on ESPN radio. He said he thought that if the Sonics left that would be it. There would be no special effort to get a team back. Maybe that has changed but he sounded like he would allmost go out of his way to prevent it.

JLGutrocks
07-02-2008, 04:00 PM
Here's Fox Sports' take.

http://msn.foxsports.com/nba/story/8286654?MSNHPHMA

MedZag
07-02-2008, 04:38 PM
My heart goes out to all my neighbors to the north. I always had a gut feeling this conclusion was inevitable, but you all put up one helluva fight. I was up in Seattle the day of the big rally with Gary Payton. Electric stuff. You guys deserve a franchise, but Stern is a shmuck, so it may be quite a few painful years till we see pro ball in Key Arena again.

Now go buy a Brandon Roy jersey and stock up on the black and red facepaint. We've been supporting your Mariners and Seahawks for years for lack of our own teams, now its time to return the favor :P

Edit: I also think its deplorable that ESPN on their front page made space for the 4000th Favre "unretirement" rumor but relegated this decision to one of the tiny links in the sidebar.

Das Zagger
07-02-2008, 05:27 PM
According to a couple of rumors Steve Ballmer and the NBA were involved in the settlement.

I could kinda see the Bobcats moving up here. I think it was a total PR ploy by Stern to give Johnson, the first black owner, a team. OTOH, I can't see the NBA moving again from CHA. No way the Hornets move though, the NBA doesn't need another scandal, it's suffering enough.

All in all, its the little people that get screwed in all of this...and the big boys could care less.

MedZag
07-02-2008, 08:01 PM
So ESPN finally has it as the main story on the front page, with an appropriate picture of Bennett and Stern together. Rescind previous comment.

Still nothing on SI. It's not even on their NBA subpage.

xjzico
07-02-2008, 10:00 PM
Some people are pegging Memphis as a likely team to move and I've heard hints in regards to Milwaukee. Essentially if Stern and Ballmer have some sort of aggreement similar to the one with Bennett, it could be a team no one would even consider. Not that it really matters to me, my last ties to the NBA have been severed.

surfmonkey89
07-02-2008, 10:12 PM
I'm thinking that given the fact that the league has pretty much saturated the market, they're going to use the fact that there are 1 or 2 empty arenas available to continue to milk the communities where franchises already exist.

Given the economy they're not going to get many NEW arenas built, so why not use the couple that are already empty as leverage to get more money from the current cities that have franchises by threatening to move to a city where an empty arena already exists.

It's like the NFL. Everyone talks about how LA doesn't have a team, but it actually has been working out to the league's advantage because an owner can threaten to move to LA in order to get a sweet deal in their current city.

It's all a joke. A sad, sad joke.

Birddog
07-03-2008, 05:15 AM
http://www1.istockphoto.com/file_thumbview_approve/157024/2/istockphoto_157024_spilled_milk.jpg

TheReasonableZag
07-03-2008, 05:45 AM
Bennett isn't out of the woods yet. I've thought all along that Schultz's suit had more legal merit than the city's.

wazZag
07-03-2008, 06:13 AM
Bennett isn't out of the woods yet. I've thought all along that Schultz's suit had more legal merit than the city's.

I disagree, I think Schultz is merely assuaging the coffee drinking city of Seattle while Starbucks is hitting a rough patch. Although I have admittedly not read the briefing, my understanding is that the Clay Bennett team was required to make a good faith effort to remain in Seattle. It doesn't have to be perfect effort nor does it have to be successful. I think Bennett can point to enough negotiation to satisfy that provision (if my uninformed assumptions are correct re: the good faith provision). All Schultz can point to is a desire of Bennett and Co. to relocate to OKC, which proves nothing.

The bottom line in the Schultz suit for me has always been this: Schultz is coming to the court like a "babe in the woods" as though the harm that occurred was completely unforeseeable. That act isn't going to fly: he is a sophisticated businessman, CEO of an enormous company, and should have known that if you sell the basketball team to a large group from OKC, a city that just so happens to have an empty stadium, and an NBA "tryout" under its belt, they are going to try to get the team to OKC.

Zagpower
07-03-2008, 08:04 AM
The bottom line in the Schultz suit for me has always been this: Schultz is coming to the court like a "babe in the woods" as though the harm that occurred was completely unforeseeable. That act isn't going to fly: he is a sophisticated businessman, CEO of an enormous company, and should have known that if you sell the basketball team to a large group from OKC, a city that just so happens to have an empty stadium, and an NBA "tryout" under its belt, they are going to try to get the team to OKC.

:agreed:


Everybody saw this coming.

zag944
07-03-2008, 08:11 AM
Schultz is obviously the most to blame in my book. He bought his toy and when he became the first person in the history of the world to get some guff from a politican he sold it.
How nieve could you be? You buy the team THEN realize you "can't" operate under the lease? NOW you know that NBA players get paid a lot of money? Did he think some vultures like the PBC would actually try to keep the team here? come on.

Bennett, Stern, Nickels, the governer, etc....I wish nothing but the worst on all of them, but they all operated about the way one would expect them to.

Now we have no team AND no "viable" arena in a chicken and egg scenario. Problem is, we couldn't get the arena done when there WAS a team here. Does anyone think that one will get built because we "might" get a new team someday? I'd say its more likely the Mariners make the playoffs.

There isn't going to be quality a mens basketball team in Seattle for at least a decade.

TheReasonableZag
07-03-2008, 08:19 AM
I disagree, I think Schultz is merely assuaging the coffee drinking city of Seattle while Starbucks is hitting a rough patch. Although I have admittedly not read the briefing, my understanding is that the Clay Bennett team was required to make a good faith effort to remain in Seattle. It doesn't have to be perfect effort nor does it have to be successful. I think Bennett can point to enough negotiation to satisfy that provision (if my uninformed assumptions are correct re: the good faith provision). All Schultz can point to is a desire of Bennett and Co. to relocate to OKC, which proves nothing.

The bottom line in the Schultz suit for me has always been this: Schultz is coming to the court like a "babe in the woods" as though the harm that occurred was completely unforeseeable. That act isn't going to fly: he is a sophisticated businessman, CEO of an enormous company, and should have known that if you sell the basketball team to a large group from OKC, a city that just so happens to have an empty stadium, and an NBA "tryout" under its belt, they are going to try to get the team to OKC.

I disagree. I'm sure Schultz suspected that Bennett would have rather owned a basketball team in OKC than in Seattle -- hence the clause in the contract that Bennett would make honest efforts to keep the team in Seattle. It turns out now that there is compelling evidence that Bennett -- contrary to his representations and promises -- never wanted to keep the team in Seattle and always intended to move the team to OKC. Schultz's theory is that Bennett knew that Schultz would only sell the team to an owner committed to owning the team in Seattle, and Bennett lied about his intention to own a team in Seattle, and Schultz was induced by those lies to sell to Bennett. That is the very definition of fraud.

It is an incredibly simple case and the evidence is already there that Bennett never intended to own a basketball team in Seattle. He sent emails to his business partners explaining that if his (disingenuous) efforts to get an arena built were somehow successful, they could always sell the team in a "sweet flip."

People question Schultz's motive in filing suit. It may be more for PR than anything. But that doesn't mean the case isn't solid. And it doesn't mean that he doesn't intend to win.

TheReasonableZag
07-03-2008, 08:21 AM
:agreed:


Everybody saw this coming.

Bennett would be crazy to stake his defense on this. He's charged with lying about his intention to own a team in Seattle. He's not going to defend against those charges by saying "you knew I was lying."

zag944
07-03-2008, 08:32 AM
Bennetts lawyers have demonstrated that they are quite exceptional, but anything could happen in court.

While Schultz's case looks like a slam dunk on the surface, most legal analysts say it is a longshot. Sadly there is a difference between what is blatantly obvious and what is considered "proof". Sadly, "good faith" appears to be a very realitive term.

that would be great if the team had to come back after he already began the move to OKC. It would almost be worth all the drama the last two years to see Bennett get the egg in the face, $45m poorer at that.

TexasZagFan
07-03-2008, 09:08 AM
Bennetts lawyers have demonstrated that they are quite exceptional, but anything could happen in court.

While Schultz's case looks like a slam dunk on the surface, most legal analysts say it is a longshot. Sadly there is a difference between what is blatantly obvious and what is considered "proof". Sadly, "good faith" appears to be a very realitive term.

that would be great if the team had to come back after he already began the move to OKC. It would almost be worth all the drama the last two years to see Bennett get the egg in the face, $45m poorer at that.

If I read the article correctly, Bennett gets his $45m back if the team has to return to Seattle.

Why did Schultz sell in the first place?

The city of Seattle had a chance to step up, but chose not to. I'm with Birddog on this one...Seattle's cryin' over spilt milk.

OKC may not have the Space Needle or Puget Sound, but it's a thriving area with hundreds of thousands of really nice folks (who are getting richer by the minute with oil > $140/bbl).

zag944
07-03-2008, 09:26 AM
The City of Seattle isnt crying over anything. They got their money, and it hardly seems like they have ever really cared much about the team if it meant actually doing anything.

Its the fans that are crying because everyone !@#$ed us. Our city, our state, the leauge, and 2 ownership groups. The fans are the only ones who hold no blame in the situation and were the only ones who got screwed. Maybe that's just the way things work, but that doesn't make me any less pissed off.

hardly spilled milk

229SintoZag
07-03-2008, 09:45 AM
Are you buying season tickets?

75Zag
07-03-2008, 10:05 AM
The best evidence I see that Schultz' action is for PR purposes is the remedy he is seeking. As I understand it, he is NOT seeking to rescind the transaction and take back the team himself in exchange for a refund of the purchase price. That would be difficult but perhaps not totally impossible if he could prove Bennett et. al. somehow breached the purchase agreement by failing to act in good faith. Instead Schultz is seeking a court order that would force Bennett to sell the team to a newly formed Seattle buying group. Although anything is theoretically possible in the crazy world of high stakes litigation, I have never heard of such a remedy. In my opinion, if Schultz were serious - and if Starbucks was not hemmoraging money like a stuck pig - he would be offering Bennett a refund in exchange for the team.

229SintoZag
07-03-2008, 10:22 AM
The best evidence I see that Schultz' action is for PR purposes is the remedy he is seeking. As I understand it, he is NOT seeking to rescind the transaction and take back the team himself in exchange for a refund of the purchase price. That would be difficult but perhaps not totally impossible if he could prove Bennett et. al. somehow breached the purchase agreement by failing to act in good faith. Instead Schultz is seeking a court order that would force Bennett to sell the team to a newly formed Seattle buying group. Although anything is theoretically possible in the crazy world of high stakes litigation, I have never heard of such a remedy. In my opinion, if Schultz were serious - and if Starbucks was not hemmoraging money like a stuck pig - he would be offering Bennett a refund in exchange for the team.

Actually, the remedy he is seeking is to put the team into a trust, to hold it until a local buyer is available.

The real problem is that Shutlz is not nutting up and seeking a TRO and posting an injunction bond. If he were serious, I think he would do that. Letting Bennett set up shop in OKC really diminishes his argument.

TheReasonableZag
07-03-2008, 11:46 AM
Actually, the remedy he is seeking is to put the team into a trust, to hold it until a local buyer is available.

The real problem is that Shutlz is not nutting up and seeking a TRO and posting an injunction bond. If he were serious, I think he would do that. Letting Bennett set up shop in OKC really diminishes his argument.

I agree that this might suggest that he isn't in it to win it. It also could simply be sound lawyering. What's the irreparable harm if the Sonics play a year in OKC before trial on the merits?

229SintoZag
07-03-2008, 12:30 PM
I agree that this might suggest that he isn't in it to win it. It also could simply be sound lawyering. What's the irreparable harm if the Sonics play a year in OKC before trial on the merits?

You have to be kidding.

Just off the top of my head, here are some problems:

Sonics bound to a new lease in OKC for their new arena. Sonics do a new TV deal down there. A new radio deal down there. Hire new vendors for food, drink, security, ticketing, etc down there. Sonics sell new luxury suites, sell season tickets, etc. down there. Move staff there, or hire new staff there, and make salary, benefits, etc., commitments.
Players, coaches, and perhaps some office staff all move there and buy homes there.

This deal becomes exponentially more difficult to unwind once the Sonics (or whatever they will be called down there) put down OKC roots.

zagabond
07-03-2008, 01:50 PM
Aubrey McClendon and Tom Ward, two of Bennett's partners in the Sonics, were the founders of Chesapeake Energy Company (CHK). Ward has since left Chesapeake and founded Sandridge Energy (SD). Aubrey and Tom are each worth more than $2 billion. CHK is up 77% so far this year and SD up 84%. These are sharp business men and should not be under-estimated.

(P.S. Aubrey has publically stated that, in his opinion, CHK has a NAV of $150 per share. I've owned and followed this stock since 2002 and so far his predictions regarding his company have proved accurate.)

Birddog
07-03-2008, 04:57 PM
Are you buying season tickets?

Hell no, I'm one of those that refers to the NBA as Not Basketball Anymore. The events are much too orchestrated for my tastes too. I'll probably take in an occasional game if Ammo comes to town, or Ronny etc.



I've owned and followed this stock since 2002 and so far his predictions regarding his company have proved accurate

You are a smart lad. The stock was trading at around $3 in 2,000. I wish I had seen this coming.


A couple more thoughts. The press down here is obviously biased, but it looked to me like the Sonic's Lawyers carved up the Seattle boys. I'd bet that Slade Gorton would have been scolded had the judge made her ruling public. The "poison well" gambit was stupid.

Seattle lost the Pilots after only one year when they were unable to get progress on a stadium. They almost lost them again (Mariners) before Nintendo stepped in. The Seahawks were almost in the moving vans. Face it folks, Seattle has flirted with this for a long time. I know you're weary of funding arenas and stadiums, but it comes with the turf. I'm pretty sure Bennett gave a good look at Seattle's possibilities. Seattle is after all, the 10th largest TV market in the country. Bennett and the boys are businessmen first, good citizens of OKC 2nd. OKC was just the ace in the hole for them in this deal.

The average NBA fan in this market is a Boomer Sooner. They will be restless in no time at all if the team doesn't start winning. Sooner fans are some of the worst you have ever seen. They'll turn on a team quickly if they don't produce.

Zagineer
07-03-2008, 10:38 PM
Aubrey McClendon and Tom Ward, two of Bennett's partners in the Sonics, were the founders of Chesapeake Energy Company (CHK). Ward has since left Chesapeake and founded Sandridge Energy (SD). Aubrey and Tom are each worth more than $2 billion. CHK is up 77% so far this year and SD up 84%. These are sharp business men and should not be under-estimated.

A similar message was stated on KJR 950 in Seattle on the way to work this morning by Kevin Calabro, the "Voice of the Sonics"..., except in the past tense (These are sharp businessmen and were underestimated.).

Unfortunately, its too late. :(

Akzag
07-04-2008, 02:18 PM
Chin up y'all ... Chehalis has been awarded an expansion team for the upcoming American Basketball Association. :o


The Washington Raptors (really?) are coming to a town not really near you soon.

willandi
07-05-2008, 08:33 PM
I have several problems with the resolution. I am not a big NBA fan, watching mostly games with Zag players.
It seems that if Seattle had waited until the judge had issued her decision, they could have appealed, tying up the move long enough to have negotiated a similar settlement.
It also seems that by requiring a commitment to renovate the Key in the next legislative (and 1/2) session, they have written a prescription for no NBA in Seattle. They should have insisted on 2010 at the least.
I understand why the owners voted to approve the move. It ensures that they can move their own teams anytime they can no longer hold up the local economy to give them more for less money.
What would happen if a consortium of Seattle buyers made another owner an offer they couldn't refuse, and then moved the team? It was shown by Al Davis, of the Raiders, that saying no isn't necessarily an option, and, even though that was NFL, it could be legally argued as precedent.
I have to ask the questions. What have the robber barons of OK done to make them "good" business men. They didn't invent anything, they have used stock and the relative positions to become wealthy, most likely energy. Did they start from scratch? or inherit a starting stake? Most wealthy people that I have known have gotten there on the backs of others. If they are worth a combined 6 Billion+, why couldn't they offer 100 mil each, to be matched by the taxpayers, to build a new venue. That would have been palatable and shown a sincere desire to remain in Seattle.

Zagpower
07-06-2008, 08:15 AM
.
I have to ask the questions. What have the robber barons of OK done to make them "good" business men. They didn't invent anything, they have used stock and the relative positions to become wealthy, most likely energy. Did they start from scratch? or inherit a starting stake?

This should answer that question. Pretty impressive IMO.

http://findarticles.com/p/articles/mi_qn4182/is_20070626/ai_n19325198

cjm720
07-06-2008, 03:50 PM
The best evidence I see that Schultz' action is for PR purposes is the remedy he is seeking. As I understand it, he is NOT seeking to rescind the transaction and take back the team himself in exchange for a refund of the purchase price. That would be difficult but perhaps not totally impossible if he could prove Bennett et. al. somehow breached the purchase agreement by failing to act in good faith. Instead Schultz is seeking a court order that would force Bennett to sell the team to a newly formed Seattle buying group. Although anything is theoretically possible in the crazy world of high stakes litigation, I have never heard of such a remedy. In my opinion, if Schultz were serious - and if Starbucks was not hemmoraging money like a stuck pig - he would be offering Bennett a refund in exchange for the team.

My understanding was that Schultz is attempting to unwind the deal. Regardless, totally moot point. Schultz knew what he was doing, Bennett got what he wanted and the city and state should be completely ashamed. That said, there has to be a better business model out there to fund stadiums. There are many other needs and uses for my funds...but in reality none of it would go to schools, etc. And thatīs why Nickels and Gregoire wonīt get my vote. Hereīs hoping we get a new team...

229SintoZag
07-06-2008, 09:00 PM
On an unrelated note--has anybody contacted Calabro? I want him doing Zag games during the down years until we get the NBA back. No way is UW going to replace Bob Rondeau, so if Calabro wants to stay in the NW we should have a shot.

We can always dream, can't we?

TheReasonableZag
07-08-2008, 10:56 AM
You have to be kidding.

Just off the top of my head, here are some problems:

Sonics bound to a new lease in OKC for their new arena. Sonics do a new TV deal down there. A new radio deal down there. Hire new vendors for food, drink, security, ticketing, etc down there. Sonics sell new luxury suites, sell season tickets, etc. down there. Move staff there, or hire new staff there, and make salary, benefits, etc., commitments.
Players, coaches, and perhaps some office staff all move there and buy homes there.

This deal becomes exponentially more difficult to unwind once the Sonics (or whatever they will be called down there) put down OKC roots.

Yeah, but that's just money. Not irreparable harm in the legal sense.

I see that my rep is now red. I always wanted to be a bad boy...

wazZag
07-08-2008, 11:01 AM
I also got neg repped for this thread from a mysterious source. :confused: