July 19, 2017 marked the 10th anniversary of Clay Bennett’s purchase of the Seattle Supersonics. As we all know, that purchase eventually led to the Seattle franchise being relocated to Oklahoma City and being renamed the Thunder. Two years ago I wrote a detailed post about events that led to that purchase, MAPS, Sonicgate, and the Oklahoma City Thunder.
After joining the WTLC team a little over 3 years ago, I became aware of a widespread resentment toward the Thunder, and found much of it based on misconceptions of the events that led to their relocation. Thus the inspiration to invest over 300 hours writing the MAPS post.
When I wrote MAPS, or more accurately, when I began my research to write it, I was willing to accept whatever I dug up and report it accurately. Good or bad. At my age, you develop a bit of a cynical nature, and I knew anytime big money gets involved, the probabilities of foul play increase.
That’s not what I found. In fact, the source I was referred to — the 2-hour documentary titled Sonicgate, only made Bennett’s case stronger.
Yesterday while clicking around the internet I found this article: Why SuperSonics fans are mad at ‘NBA 2K’ and why the game had no choice, by Tim Kato. In it I found these paragraphs:
The SuperSonics didn’t move amicably from Seattle. The team’s majority owner was Howard Schultz, the former CEO of Starbucks, and after failing to convince the city of Seattle for public funding of a new arena, he sold the team to Oklahoma City businessman Clay Bennett. While Bennett and his group initially suggested they might keep the SuperSonics in Seattle, he announced his intentions to move the team just 15 months later after the purchase.
It was contentious, and SuperSonics fans still haven’t come to peace with the abrupt “stealing” of their franchise, as they saw it. As part of the relocation, it was determined that the Thunder would keep the SuperSonics franchise history, although the name would remain in Seattle should the NBA return to the city at some point. (By all indications, it might be happening sooner than you think.)
After the hours I spent researching MAPS, I found the insinuation that Bennett “stole” the Sonics — let’s say troubling — so I wrote a response:
as posted at NewOK.com, July 19th, 2006, the day Clay Bennett "purchased" the Sonics.
If one jimmies a door lock, hot wires an ignition and drives away with an automobile without paying for it, that’s stealing. If one negotiates a contract to purchase an automobile, pays for it and abides by the terms of that contract, then drives said automobile home, that’s ownership. Bennett purchased the Sonics under the stipulation the city had 1 year to agree to build a new arena, not 15 months, those were the terms, but he gave the city an extra 3 1/2 months to put together an agreement. Didn’t have to, but he did and if those terms weren’t met he was free to move the team, his team, where ever he chose. The day before announcing the Sonic purchase, NewsOK posted this:
In it, the 12 month term of the contract is talked about as is this:
“A mayor’s task force commissioned by Nickels found KeyArena ranks next to last among NBA-only arenas in potential and actual revenue.”
Seattle’s own mayor said Key Arena wasn’t cutting it any more and still the citizens of Seattle passed Initiative 91 less than 4 months after Bennett purchased the team. That killed any chance for an arena in Seattle, but what about the suburbs? Any single ’burb was going to need help from the state so Bennett hired a professional lobbyist team to get that help and was turned down and 23 months after purchasing the team Bennett was stuck in court trying to get an agreement to buy out of the final two years of the Key Arena lease. Bennett was accused of not acting in "good faith" to secure a new arena and The Seattle Times posted this article on June 19, 2008. Interesting note, the article indicates an update on Feb 17, 2012 and after reading it my guess is the updates were these last three paragraphs:
“Bennett repeated Wednesday that KeyArena lacks the ability to get "high end revenue extraction" through restaurants and exclusive clubs, and so was never viable. Only a new arena, he said, could give the Sonics a chance to turn a profit.
Keller pointed out that the "good faith" language in the 2006 purchase and sale agreement referred specifically to a "successor venue" to KeyArena.
The contract also gave Bennett’s group "sole discretion" to decide what sort of arena deal was suitable.”
Sonic fans are fond of waving the Renton proposal as proof Bennett didn’t act in good faith, but the Renton proposal came with stipulations that the team would cover any cost overruns. Bennett turned it down. Why wouldn’t he? He was under no legal obligation, per the wording of the purchase contract, to agree to pay any cost overruns on any arena proposal. Loyalty to the Sonic faithful? From the NewsOK July 18, 2006 article:
"I can’t believe anybody from the state of Oklahoma is dumb enough to think the (people of) city of Seattle are going to change their minds at that threat [Initiative 91]," Van Dyk said.
lol, the truth is Mr. Van Dyk, everyone from the state of Oklahoma were absolutely counting on the people of Seattle going through with that threat. And thanks for the team.
Contentious? Absolutely, and my neighbor wasn’t very happy when the bank repossessed his car either. Oh sure, he could sue the bank if he chose to but what do you think would happen when he gets his day in court? The same thing that happened to those who tried to sue Bennett in 2008, he would lose.
I feel bad for him. He loved that car and bragged about it to everyone, but he didn’t uphold his end of the deal, didn’t fulfill his contract. He didn’t miss just one payment, he missed several before the bank came for that car, so how disingenuous would it be of me to insinuate in any way that the bank stole that car?
The same principle applies with the Sonics. Schultz bought the team in 2001 and told the city of Seattle he needed $120-125M to renovate Key Arena, his request was denied. He brought in the NBA to help plead his case, they were denied. Schulz got mad and demanded a new arena, again denied. Schulz threatened to sell the team to an out-of-town buyer if he didn’t get a new arena, still he was denied. He sold the team. The new owners request for a new arena (a well-known stipulation of the contract) was denied with insult. Back up the truck.
It gets better. The NHL has virtually guaranteed Seattle a team if they get their arena issues in order. So has the NBA. When Sacramento was in danger of losing the Kings, they had an arena deal done in months, Clay Bennett bought the Sonics ten YEARS ago and they still don’t have an arena plan. The Sodo plan is all but dead and now there is talk of spending, are you sitting Tim? $564M to renovate Key Arena!!
Shrewd…. $125M would have satisfied Schultz in 2001…. Bennett was looking for $500M to build a new arena… but Seattle is about to spend $564M to build, according to their mayor, a whole new arena under the iconic roof of a building that lacked the footprint to offer what an entirely new arena could have provided for $64M less. Not just less money, but their team and all the revenue a NBA team creates around it as well…. for the last 10 years.
Seattle fans are mad, so is my friend, but it would be pretty bogus of me as a neutral party to point fingers at the bank at this late date…. especially when the facts are readily available.
As I said, I get it, Seattle fans were and are upset about the loss of their team, but directing their venom at Bennett is a waste of time and energy. The Sonic deal was one of those rare win/win opportunities that no business man worth his salt would turn down.
For those Sonic fans reading this, take a breath and let me explain.
Clay Bennett was looking to buy a team he could move to Oklahoma City and had been for many years. No secret there, it is well documented, and along comes the Seattle deal. That deal, as written, had two possible outcomes.
- The city of Seattle builds a new arena and the team stays in Washington, or;
- The city of Seattle doesn’t build a new arena and the team gets relocated to Oklahoma City.
Here’s the win/win part. If Seattle builds a new arena, Bennett and the ownership group that paid $350M for the team has a team with a brand new arena in a big TV market. Consider how much that franchise would have been worth just 5 years after purchase. Five years would move the timeline to 2012, the year the Thunder went to the NBA Finals. Two years after that, Steve Ballmer paid $2B for the Clippers. If the Sonics were worth half that 2 years earlier, Bennett and his partners could have sold out and walked away with nearly triple their initial investment. Even if the value was a mere $700M, they still would have doubled their money and essentially be playing with house money when another deal crossed their desk.
However, Seattle didn’t build the arena and Bennett moved the team. In February of this year, FoxSports estimated the teams value at $1.025B.
And honestly, from a purely business standpoint, option 2 was the less accretive. At numbers 9 and 8, FoxSports values the Dallas Mavericks and Houston Rockets at $1.45B and $1.65B respectively. It was in Bennett’s best financial interest for that arena getting built. Had that happened, he and the other owners, assuming they hadn’t sold, would be worth upwards of $625M more than they are today.
That said, again, I get it. Seattle fans miss their team, but if there is someone worthy of their venom, it’s Mr. Coffee himself, Howard Schultz. Or at least his attorneys that drew up the purchase agreement. They are the ones that put forth a new arena as part of the deal, gave Bennett “sole discretion” on what arena was suitable, and set the 12 month timetable. Bennett’s only real crime was being smart enough to sign the deal.
As I wrote in the MAPS post, it would behoove Thunder fans to stay ever vigilant and aware, because the day will come when they too will face the same choices Sonic fans had to make 10 years ago.
What I don’t get are “neutral” writers with the resources to know better that don’t get it.