Saturday, April 26, 2008

Sonics: The unravelling

Things are looking better and better for the Sonics. The array of lawsuits against their ownership are demonstrating that even more evil lurks in Clay Bennett's computer than previously thought. As I wrote a while ago, "Given that the e-mails came out of discovery in the city lawsuit, who knows what other dirty laundry might show up to aid the various cases for keeping the Sonics?" Some more dirty laundry has in fact come tumbling out of the closet, which should push the credibility of Bennett and his group into negative numbers if it wasn't there already.

The best of the newly-released e-mails, which came as part of Howard Schultz's lawsuit to unwind the sale, showed that two days before he bought the team, Bennett was already contemplating a "sweet flip" to obtain another team and move them to Oklahoma City if by some chance an arena solution materialized in Seattle. ESPN legal analyst Lester Munson had a great column stating that the new information gives Schultz a substantial case (thanks to Seth Kolloen for the link). As Munson writes, "The allegations against Bennett and his group are serious and seem to indicate a fraud at the time of the sale. The chronology of the e-mails is compelling evidence that will allow Schultz to push Bennett and his group into a bad corner." This might even be enough to make fighting this lawsuit out all the way better than using the leverage it provides, as I advocated previously, but there's still the risk of a loss taking away all the city's bargaining power, and you can bet that the NBA won't be in a hurry to negotiate with a city that tried to take it out in court.

The best aspect of Schultz's lawsuit is that it advocates revoking the sale and turning the team over to a "constructive trust," administered by a judge, which would then sell the franchise to local ownership. Thus, Schultz isn't in it to get the team back, which strengthens his case: it allows him to argue that the sale was fraudulent without him benefiting if it is voided. Munson called the "constructive trust" language "a brilliant idea," and considered it one of the key components in making the case "more than a public relations stunt."

Another fantastic e-mail that came out later in the week showed that the NBA itself questioned Bennett's "good-faith efforts" after Aubrey McClendon's ill-advised comments to the Oklahoma Journal-Record. The Seattle Times has a great list of the key e-mails that have been released so far: reading those, it becomes even harder to understand David Stern's assertion that "Clay, as the managing partner and the driving force of the group, was operating in good faith."

As more information comes out, it's looking increasingly likely that there's still a chance to keep the Sonics in Seattle, particularly with the Schultz lawsuit. Hopefully, this will prove that pro sports franchises and their owners can't just selectively pick and choose which laws to adhere to. This kind of blatant lying to facilitate a potentially fraudulent purchase wouldn't be acceptable in the corporate world, so it shouldn't be acceptable in the sports world. The sad thing is, though, this situation was pretty obvious ever since Schultz sold the team to Bennett. Just about everyone knew he would do anything to get a team to Oklahoma, but if he hadn't slipped up by revealing such in detailed and indiscreet e-mails, he'd likely already be there. This should serve as a warning to sports fans everywhere: be very, very careful with out-of-town owners, particularly if they have interests in another market without a team. Many of them will try to move, and it's unlikely that they'll all prove as incompetent as Bennett has.

Despite all this incriminating evidence about Bennett's intentions that should cause concern among NBA management, Stern is still sticking to his guns about moving the team. That demonstrates that this isn't entirely about relocation, or media markets: it's really about the public paying for teams' arenas, a huge goal of Stern's. Oklahoma City is willing to throw public money at the NBA, while Seattle is more reluctant: in Stern's view, that seems to make up for its other obvious deficiencies, such as being the country's 45th-largest media market. As Henry Abbott pointed out in this excellent TrueHoop piece, "Right now, the way it commonly happens is that teams ask for a sweetheart deal, and if they don't get it, they leave for somewhere that will give a sweetheart deal. All that happens with the blessing of the NBA, an organization that serves the owners." The lawsuits, the incriminating information, and the court proceedings will undoubtedly help the case to keep NBA basketball in Seattle, but in the end, the city and the state will still have to come forward with some money. It doesn't have to be a ridiculous plan like Bennett's $500 million arena in Renton: the Ballmer alternative keeps sounding better and better, but in the end, there will still need to be public money involved. The amount, the source and the terms are up for debate, but public funding of arenas to some degree is a necessary evil these days: if your town isn't willing to pony up the cash, some other city inevitably will.

- Henry Abbott has more on how this case is casting a shadow over an otherwise great playoffs.
- Abbott on how Aubrey McClendon's honesty makes him "4% more likable than the other owners" (a comparison to Josh Howard recently admitting to smoking marijuana).
- A hilarious-in-retrospect October 1, 2006 piece from the Tacoma News-Tribune's Frank Hughes, which features Clay Bennett serving lamb testicles to unsuspecting Seattle businessmen (is that ever a metaphor!), and also the following paragraph: "Ask anyone who knows Clay Bennett, and most say he is straightforward, a "straight shooter" as they say down here. He might not always give you an answer, they say, but he does not lie. He is a tough negotiator, but fair. He knows when he has leverage, and is not afraid to use it to his advantage, but does not necessarily take advantage of people."
- Seth Kolloen on Clay Bennett's inferiority complex over at Enjoy the Enjoyment.
- Greg Johns of the Seattle Post-Intelligencer on how the city plans to pursue its lawsuit.
- Seattle Times columnist Jerry Brewer has a hilarious mock e-mail exchange with David Stern and Clay Bennett.
- The Times' Percy Allen has a good piece on Richard Yarmuth, Howard Schultz's lawyer, who was involved in the city's lawsuit against the American League after the Pilots left town that resulted in the league granting the town the Mariners franchise (the same lawsuit current city representative Slade Gorton spearheaded).
- A post at Hotdog and Friends showing that Bennett was happy to hold a gun to Oklahoma legislators' heads as well. They also have a good post on how David Stern defies logic. (Thanks to Deadspin for the link).

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