Too Little, Too Late for Schultz With the Sonics




You've got to hand it to Starbucks Chair & CEO Howard Schultz. He's got a flair for the dramatic and knows a good PR opportunity when he sees one. Just when Sonics fans thought they'd seen their last Sonics home game at Key Arena this week, Schultz, who sold the team in 2006 for $350M, announced today that he is preparing to file a lawsuit against the group he sold the team to in order to rescind the sale. Too bad Mr. Starbucks didn't show this kind of care for his team before he sold them to Clay Bennett and his fellow Oklahoma investors.

This move by Schultz rings hollow. Its too little, too late unfortunately. Schultz, who purchased the Sonics in 2001 for $200M, sold the team for $150M more than he purchased it for just 5 years later. Pretty good return on your investment over a 5-year span I'd say. He claims to have lost so much money on the team that he had no other choice but to sell. But Schultz had other options. And don't forget that.

Schultz had offers to move the team's home to Bellevue, which is one of the wealthiest communities in the United States. The team would have likely thrived financially had Schultz moved the team there.

Microsoft CEO Steve Ballmer has salivated over getting his hands on an NBA team for quite some time now. Schultz likely could have struck a deal with Ballmer and could have rested comfortably that the Sonics would have remained in the state of Washington.

So if Schultz was so interested in keeping the Sonics in Washington, why did he ultimately sell to a group that was comprised completely of out of towners with no interest in keeping the team in Washington? The worst kept secret in sports was that Clay Bennett had no intention of actually keeping the Sonics in Washington. If Schultz couldn't see that Bennett was simply going to go through the motions when it came to honoring their agreement to "make best efforts" to keep the team in Washington, then he wasn't paying very close attention.

The chances of Schultz winning his lawsuit against Bennett and having the Sonics returned to him are about as good as the chances that I'll be backing up Shaq in the pivot for the Suns during the upcoming NBA Playoffs.

Pay close attention to the poker game between NBA Commissioner David Stern and the City of Seattle over the next few months. Stern knows that the Sonics are a lame duck franchise in Seattle with Bennett's group at the helm. The last thing he wants is for this drama to continue until the Sonics lease at Key Arena expires in 2010. So Stern will likely let Seattle officials know that if they let Bennett out of his arena lease, the city will stand a very good chance of getting another NBA franchise at some point. (Remember, Stern reached a similar deal with the City of Charlotte after George Shinn moved the Hornets to New Orleans). But if the City of Seattle plays hardball and keeps Bennett and his team in a place they don't want to be for the next two seasons, Stern will remember and it likely won't bode well for the future of NBA basketball in Seattle.

The counter to this strategy for the people of Seattle is to do everything in their power to keep the Sonics in Key Arena until their lease expires in 2010 and hope that Bennett and his fellow owners grow impatient and break out into a cold sweat every time they see empty arena seats galore for the next two seasons. If Seattle can wear out Bennett and get him to sell (just like former Seahawks owner Ken Behring did when he broke down and finally sold the NFL team to Paul Allen), then the fans of the Sonics may yet get to see their team play again in Seattle beyond 2010.

My prediction? The City of Seattle will be successful in their suit against Clay Bennett and Bennett will have to honor the last two seaons of the team's lease at Key Arena. Sonics fans will hope that Bennett will sell the team to a local ownership group over the next two seasons, but Bennett and his fellow co-owners will wait until the end of the 2010 season to move the team to Oklahoma City. Bennett knows just how hard it is to purchase an NBA franchise and he is not about to pull this plug on a team he has already invested two years in, in an effort to move them to his hometown.

The Sonics will move to Oklahoma City in 2010 and NBA basketball in Seattle will be over and out. Which is definitely not a positive for the NBA, considering Seattle is the gateway to the Far East, the league's most important area of growth over the next decade.

We'll see if I'm right.......

 

Seatte's Best

Great read on the current NBA Crisis in Seattle.

Schultz did appear to have a PR coup on this, but a weak case if it really becomes one.

The reality of the arena in Seattle probably makes this a city and situation where the NBA will play matador defense on the current ownership.

My hunch would be that the NBA will roll over to Bennett and promise Seattle first rights on expansion or something similar to avoid an angry lame duck in Seattle for 2 years, which would be both disastrous and combustible.

--jc

No doubt Schultz sold out

No doubt Schultz sold out Seattle by selling to out of towners who my 4yr old knew didn't "really" want to keep here.

I do think the lawsuit has more teeth than you give it credit for.

There is a side letter in the sales contract requiring a good faith best effort.

We all knew based on the actions of Bennett that he was going through the motions but now with the mounting email evidence and the comments from Aubrey Meclendon there is proof.

The "Sweet Flip" email is very damaging. Why would an ownership say it is our intent to keep the team in the Seattle Area so long as we can get a suitable arena, but privately say if we get the arena we'll sell for a nice profit go back to OKC and try again for a team.

This clearly shows they had no intention of ever owning a team in Seattle but only in OKC. How can an owner reasonably be expected to give a good faith best effort in Seattle as requiremed by the contract when he clearly doesn't want to be here?

If the law doesn't agree that what the heck is the propose of contracts anyways?

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