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by Greg Johns SeattlePI.com July 2, 2008 7:36 p.m. PT
Clay Bennett will take his basketball franchise to Oklahoma City next season in exchange for $45 million and an agreement to leave the Sonics' name and history behind in Seattle for a future NBA team.
The Sonics chairman will owe the city an additional $30 million in 2013 if the state Legislature approves funding for a new arena or a KeyArena renovation next year and the city does not get a replacement NBA team in the next five years.
If the Legislature fails in its funding in the upcoming session, or the city lands a replacement team in the next five years, the $30 million payment will be canceled.
Bennett and Seattle Mayor Greg Nickels signed the binding agreement Wednesday.
"The transition and move of this team begins tomorrow morning," Bennett said in Oklahoma City.
The situation is clouded by am ongoing lawsuit against the Oklahoma City owners filed by former Sonics chairman Howard Schultz, who is seeking to overturn the original 2006 sale. Bennett called Schultz's suit "baseless," but said if the team ultimately is forced to return to Seattle, the $45 million would be refunded to his ownership group.
If the Professional Basketball Club is prevented from playing home games in Oklahoma City in either of the next two seasons as a result of the Schultz suit, the city will repay Bennett's group $22.5 million for each season.
In addition, if PBC is required to play in KeyArena in the 2008-09 and 2009-10 seasons as a result of the Schultz suit, PBC is released from its obligation to make the $30 million contingent payment.
The two sides had been closing in on agreement over the past several days, but the Schultz situation remained a hang-up. Bennett wanted the Schultz suit tossed out as part of the agreement, but city officials told him they were not party to that suit and had no control over the former team owner.
Schultz is suing Bennett's group for fraud and breach of contract, seeking to unwind the sale and have the team ownership turned over to a trust that would then sell the team back to Seattle owners. That suit is in the federal court of Judge Marsha Pechman, who also oversaw the city's now-dropped case against Bennett.
Richard Yarmuth, the attorney representing Schultz, said the suit would continue.
"Our lawsuit is separate," Yarmuth said. "We are not a party to this settlement and in fact we chose not to participate in it."
The agreement was announced Wednesday evening by Nickels after Pechman filed an order saying the two parties had reached a settlement on their KeyArena lawsuit prior to Pechman's expected 4 p.m. ruling.
The NBA was part of the settlement process, filing a statement from David Stern in conjunction with the announcement, in which the commissioner said "the NBA would be happy to return" to Seattle at a future time.
Nickels acknowledged the league made no guarantees however.
Flanked at a City Hall press conference by council members, the mayor said the agreement was part of a realization that the team would only stay at most for two more years even if it had won its case.
"The first $45 million makes us whole for the next two years and pays off the debt at KeyArena," Nickels said. "I hope we don't get the final $30 million. I hope we get a new basketball team in Seattle."
City attorney Tom Carr said the settlement does not interfere with Schultz's suit, but was the best deal for the city.
City council president Richard Conlin acknowledged this was a "sad day" for Sonics fans, but said the economic realities forced the decision.
Gov. Chris Gregoire released a statement saying it was up the Legislature now to get a new team in return.
"Like all Sonics fans, I am very disappointed that the team is leaving Seattle," Gregoire said. "While it is a sad day for the city and region, I am pleased that the agreement keeps the Sonics history and brand in Seattle, and leaves open the possibility of an NBA team locating in the city.
"I am heartened by the news that the NBA is committed to helping the local ownership group led by Steve Ballmer bring a basketball team to Seattle, and that it believes the KeyArena is a viable stadium for that team. Now it's time for the state Legislature to get to work," Gregoire said.
Bennett said season tickets in Oklahoma City would go on sale immediately.
Seattle should've tried to get stronger assurances of a future franchise (be it a shift or expansion). Charlotte only had to wait 2 years after being assured one as part of the Hornets move to New Orleans.
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