"SONICWATCH," official thread

Mixer! · Jun 29, 2008

While badger's away..

Sonics have options as shopping season begins

If Sonics' owners win, when will moving vans arrive?

Much like Sonics, White has handled hardships

RedStripe · Jul 1, 2008

Seattle PI: So you're saying there's a chance?

Sonics questions remain

Judge's inquiries during closing offer little insight

By GREG JOHNS
P-I REPORTER
Given the fate of the Sonics' future in Seattle now lies in the hands of Marsha Pechman, it's impossible not to wonder what the U.S. District Court judge was thinking as she sat through the six-day trial between the team's Oklahoma City ownership group and the city of Seattle.
Judging which way a judge might be leaning is difficult, however. Pechman gave few clues during the 30 hours of testimony, but one intriguing difference was the number of questions she posed to the opposing lawyers during closing arguments Thursday.
Pechman seemed particularly intent on pinning down Paul Lawrence, lead attorney for the city, as she engaged him at length on 10 different topics during his closing.
On the flip side, Pechman interrupted PBC attorney Brad Keller three times during his finale.
While judges never ask questions during closing arguments of a jury trial, it is common to break in during a bench trial where the judge wants specific responses. Pechman not only supplied the attorneys with questions before closing arguments, she also weighed in during the arguments with numerous queries.
Lawrence declined to comment on any aspect of Pechman's questions after the trial, and Keller remained off limits on all topics to the media throughout. But lawyers not affiliated with the case say it's unwise to assume anything from the way a judge responds during closings.
Sometimes judges will actually ask more questions of the side they're favoring, looking for the attorney to help fill in the gaps on any uncertainties before writing their decisions.
Or judges ask more questions because they are troubled by one party's position and want to explore holes in their case.
So while it's impossible to infer which way Pechman was leaning as the trial wrapped up, it is interesting to look at the issues she raised with each side.
Pechman seemed particularly pointed in pushing Lawrence about former Sen. Slade Gorton's dual role in the situation, as well as whether Mayor Greg Nickels would be able to work with Sonics chairman Clay Bennett if she forced the two parties to remain together for two more years.
Pechman clearly is concerned about the "dysfunctional relationship" charge by the PBC, which is one of the major defenses against a specific enforcement ruling. The judge said she's not thinking about minor issues between the two parties concerning ticket sales and concession prices, but the sort of ugly feuds raised by the trial lawyers.
"What I'm worried about," she said, "is are we going to have an ongoing allegation about the city undermining its tenant by plotting to have someone else buy them out, forcing them to increase loss, going to the NBA and undermining their business position or leaking their secrets?
"I would like to know how I can be assured that we're not going to be back here with those kinds of problems."
Lawrence said Nickels and Bennett are both sophisticated businessmen who would get along just fine once the lease issue was settled. Pechman responded by noting it's not very sophisticated when two people "go to their own corners and refuse to talk with one another."
After Lawrence suggested Nickels was merely sticking to his agenda of promoting KeyArena as a solution and refusing to talk with Bennett if he wasn't of the same mind, Pechman got down to basics.
Pechman: Mr. Lawrence, answer my question.
Lawrence: I'm trying to.
Pechman: Did the mayor ever call Mr. Bennett back and say let's sit down, let's talk about this and see what we can do?
Lawrence: The mayor ...
Pechman: I didn't hear it.
Lawrence: The mayor's position has been consistent that he's willing to talk about -- the only thing he's willing to talk about is something that would allow the Sonics to stay through the end of the lease and hopefully something future going forward. Since that was not a discussion that Mr. Bennett was willing to have there was no discussion.
Pechman: So the answer to my question is no?
Lawrence: Not -- the mayor was not willing to sit down and discuss an early exit, correct.
Pechman: Let's move on.
The judge seemed equally stern in noting Gorton violated a confidentiality agreement with the NBA after meeting with league officials and Bennett's representatives Oct. 15 in New York about the the city of Seattle's KeyArena proposals.
Less than 24 hours later, Gorton, already employed as the city's lead counsel for K&L Gates, sent an e-mail to former team president Wally Walker and a group of private investors that was seeking to force Bennett to sell the team, filling them in on the NBA meeting.
After confronting fellow K&L Gates attorney Lawrence about that situation, Pechman asked if the one way to "ameliorate the harm here to the Sonics is to sever your ties with the city" if she were to award specific performance, thus suggesting she is looking at ways to enforce the lease despite the "unclean hands" conflict.
"That would be entirely within your discretion," said Lawrence, noting the City Attorney's Office could readily assume further legal oversight.
Pechman also quizzed Lawrence about whether or not the maintenance obligation in the lease meant the city needed to maintain KeyArena as a "viable venue." The lawyer responded by saying that agreement just required keeping the facility in good repair, not at some "state-of-the-art" NBA level.
The two engaged in a lively debate over the role of "sentimentality," given the city wants to strictly enforce the lease, but also is arguing the fans' love for the team is part of the package.
"Can a corporate entity have sentiment?" Pechman wondered. "I understand that the fans do. We have spent a lot of time and the fans obviously feel they have a stake in this. But in fact, the fans aren't parties to the lease. And I don't think you're going to find anything in there about the fans. So if you want me to stick to the lease, is that really something that I should be looking at? I don't know that there is such a thing as corporate tears."
Lawrence responded by arguing the city is a public entity that differs from a corporation in that its purpose isn't to make money, but to provide benefits to citizens.
When it came time for Keller's closing, Pechman largely let the lawyer run with his thoughts. She did interrupt early to ask whether he felt the PBC owed the city any obligation for the remaining five years of debt on KeyArena's bonds that would remain after 2009-10.
Keller said no, unless the rent obligation agreed to subsequently was sufficient to cover the leftover debt, which he didn't expect given PBC's estimate of $9 million to $10 million owed compared to the current arena debt of $35 million.
In that vein, Pechman later wondered about her position if she did agree to let the Sonics go in exchange for a lease payment that would be considerably less than the $26.5 million buyout already offered by Bennett.
"Is it up to me to tell the city leadership you're asking for a bad bargain? That's not my role, is it?" she asked.
"No," Keller said. "Your role is to determine whether under the facts of this case specific performance is an available remedy. And if the answer is no, well, they are going to have to revisit what their approach was to that buyout offer."
Pechman's final question to the PBC counsel concerned whether he disagreed that Seattle had a right to file suit to enforce its lease, given his arguments that city leaders are using the lawsuit to force Bennett to sell.
"Does it have the right to try and work with the tenant to get the tenant to stay longer? Of course it does," Keller said. "But if the tenant doesn't want to because it believes ... the arena is inadequate both existing and renovated, it has no right to force its tenant to sell or engage in any course of conduct that is designed to try and accomplish that end.
"And when you do that you go over the line from a proper purpose to an improper purpose. And when you join hands and actively become complicit with others to engage in acts to effectuate that improper end you go from what is just a lawful exercise of a legal right and cross over into the world of unclean hands and improper behavior."
Pechman will issue her ruling Wednesday at 4 p.m.
Click to expand...

RedStripe · Jul 1, 2008

sound off

Posted by fanone at 6/30/08 10:23 p.m.
Well, from the sounds of the article Pechman will probably decide against the City of Seattle.
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#478347
Posted by dkellogg at 6/30/08 10:54 p.m.
fanone - you can blame Nickels & Ceis for sending out the goon squad led by Gorton if the City loses. The mayor is so used to running rip shod over everyone else locally that I am sure it is a great shock to be brought up short in court and roundly slapped down for backroom deals and underhanded bargaining that go on regularly in city hall.
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#478361
Posted by Zoomin at 6/30/08 11:12 p.m.
"the arena is inadequate both existing and renovated".

This is a completely meaningless statement made by Keller. If they did not adequately read the lease, inspect the building, and read the financial statements of the previous owners, they have nobody to blame but themselves. And then they refused to consider any Key alternatives from early on in the process. The city did the right thing in making it difficult for PBC to leave by enforcing the lease. If they hadn't, the team would be gone aleady. Just because 2-faced slimeball Gorton screwed up, the city should not be punished. PBC brought all this on and should not be rewarded for their deceitful and sleezy actions.
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#478365
Posted by Mr. Baker at 6/30/08 11:16 p.m.
There is a lease, it says they play all home games through September 2010.
The rest is fluff.
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#478379
Posted by brettb33 at 6/30/08 11:30 p.m.
Exactly, Mr. Baker. To read anything into Pechman's line of questioning is a futile exercise. If she sticks to the terms of the lease, which she indicated she did, she will rule in favor of the city.
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#478401
Posted by uh, sure at 6/30/08 11:52 p.m.
Keller should know better. There is no basis in law or fact for the Sonics to demand an upgraded Key Arena, for the remaining two years of the lease, as a precondition to their honoring the lease. Just because Pechman didn't call bulls**t doesn't mean that she wasn't thinking it.

I'm 180 degrees from fanone on my take concerning Pechman's questioning. It sounds like she wanted assurances that the handful of legitimate objections that the Sonics had voiced could be addressed in the eventuality of a specific performance scenario. If she got answers that satisfied her, the Sonics are staying.

It's interesting that, in final analysis, if the Sonics leave early it will be almost exclusively due to the actions of Nickels and Gorton.
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#478415
Posted by Hot Rod at 7/1/08 12:15 a.m.
Keller is not asking the city to upgrade Key Arena in order to stay for the two years of the lease. The Sonics said they would stay if the city built a new arena or if a plan were in place to do so. Since there aint, and since the relationship is irreparable and both sides are heavy losers - the Sonics want out, now. In fact, the Sonics want nothing to do with Key Arena, so why do you still think Keller wants an upgrade to it??? If you drop bias and emotion, consider the true issue here - Tenant/Landlord relationship. Even under contract, as long as it is fulfilled monitarily - the agreement is satisfied. That is the law and that will be Perchman's ruling. All of the 'intangables' Sonics fanatics keep trying to raise is unfortunately for them a casualty in all of this. There is NOTHING in the lease or any contract where the Sonics promise any intangables. They only promise to be a tenant until 2010, paying rent and splitting any proceeds with the city. Once again, in PURE contract law - this can be satisfied as consideration if PBC pays its rent and possibly other equity which the judge will set. This will be discounted, of course, because the city will have to pay the legal fees. Howard's case will be thrown out - since there is evidence the city and our officials interfered with Bennett's ability to get an arena built (a precondition of Seattle retaining the Sonics). Bennett might have to pay some cash for the Ticket Holder's class action suit but it doesn't prevent him from opening Nov 1 in downtown Oklahoma City under a new name. Way to go Mayor McCheese!
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#478426
Posted by Huskycrash at 7/1/08 12:30 a.m.
It's funny how everyone has their scapegoat. You see people blaming Nickels and Bennett and others putting it on Gorton and Schultz. What everyone should realize is that this mess was made by the NBA and their business model. Yes everyone mentioned has some fault and a few more then others. One person I will defend to some degree is Gorton. The worst thing he did was ignore a confidentiality agreement with the NBA. What I see is the NBA working with PBC to take the team to OKC. I am sure that they shared information to help grease this move so why shouldn't Gorton do what he has to to save the city our team. Yes we would all like everything to be above board and ethical but if your pulled into the mud then you might as well stay in it until the job is done.
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#478429
Posted by jafabian at 7/1/08 12:33 a.m.
Pechman did more than quesiton the city's attorney. She admonished him, borderline scolded him whereas for the Sonics she simply questioned for clarification. Pechman needs to understand that when the city negotiates with the professional sport franchises in regards to their facilties, the city isn't approaching this negotiation with the idea of what is best for said team but rather what is in the best interests of the city itself and its citizens? Does the city really need to spend over a half billion dollars on a venue where the league itself is losing money overall? Especially in light of problems such as the replacement of the Alaskan Way Viaduct? For an organization who's current ownership have put nothing into the local community?

Pechman should also look at the history of the Sonics/Seahawks/Mariners and see what it is they ask of the city each and every time they approach the city. Every time they do they're asking for help in making more money for themselves when they themselves are millionaires already. Is this the kind of corporate entity you want to rule in favor of?
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#478477
Posted by jd928 at 7/1/08 5:25 a.m.
If the City loses, the fault rests with Mayor Nickels. When he failed to get state funds to renovate Key Arena, he should have negotiated a buyout of the lease. Bennett likely would have offered to pay off most if not all of the remaining debt on Key Arena.
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#478672
Posted by L8tely at 7/1/08 9:10 a.m.
Let's face it Bennett and his group had only one agenda - move the sonics to OKC as quickly as. Anyone who thought otherwise is a fool. Lets assume Seattle promised a new arena. How long would it be before the owners and NBA would demand "renovations" in order to make the new arena more profitable? It was just 8 years ago the NBA praised the upgrades and repairs to the colliseum. Having been to several games I can say it is a very intimate venue to watch the game making it quite an enjoyable experience.

The NBA is broken and beginning to collapse under these ridiculous salaries and perks offered to the players and coaches. So if the team goes to OKC we can all watch with glee when they lose money and the PBC sells them and the team out at a profit.

From what I read in the papers, it seems to me neiter side proved it's case. Bennett couldn't show he tried in good faith to get a new or upgraded arena and instead turned a medicore team into the worst team in basketball. Of course he's going to lose money if he puts a losing team on the floor. What makes anyone think had we built this new arena he would have actually improved the team through trades and the draft? Absolutely none. Seattle too is not without fault, particularly the mayor and Slade Gorton. The mayor for his disengenous attempts to negotiate with PBC, and Gorton for violating the confidentiality agreement.

So here we are. If the judge sides with the city, we end up with a substandard team for two years unless the PBC sells to local investors. Then we can watch the new owners beg for a new more profitable arena to be able to afford better players. If the judge sides with the PBC and Bennett, we can wave goodbye to the team and laugh as they improve the team, but collapse along with the NBA and cry to the city and state for more money to make them profitable again.

The NBA represnts professional sports at it's worst. Nothing good will happen till the sport as a whole cleans up its act.
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Dio · Jul 2, 2008

Rumors are starting to swirl about a settlement...

Partial Qualifier · Jul 2, 2008

some settlement non-news: http://www.newsok.com/article/3264955/

oh well; guess we have to wait another couple hours

Collier11 · Jul 2, 2008

Trying not to get too excited but it is looking more and more like we will have a team next yr

Dio · Jul 2, 2008

Looking a lot like it:

http://seattletimes.nwsource.com/html/localnews/2008030229_sonitrial02.html

BigRedJed · Jul 2, 2008

It's done. Schultz was the holdup. Clay and Co. wouldn't settle until Mr. Starbucks dropped his suit, which he has now agreed to do. The negotiations began in earnest after the beatdown the city got in court.

I'm still not sure on the terms. There was talk of the same amount the Sonics offered several weeks ago (which was summarily turned down by Seattle), LESS the nearly $3 million the Sonics had to spend to defend this ridiculous suit. However, I think they may have relented on that, and in fact might be giving even a little more cash to offset more of the debt service on Key.

NormanPride · Jul 2, 2008

Thanks for keeping the discussion going while NP and I are on vacation (It is wonderful, btw).

I just saw the news on the settlement. If I had to vBet with vCash on it, I'd say one more year in Seattle and an early opt out of the lease. Basically, a lame duck Seattle year, then coming to OKC a year early (or a year late, depending on how you look at it).

In any event, it makes me curious how the judge would rule in such a case without a settlement. Mr. Starbucks really needed to drop his suit, as it is apparent that his business is going south (not literally - Starbucks apparently is closing 600 stand-alones this year because more fast fooders, like Mickie D's, is embracing cheaper coffee, so that leaves Starbucks out).

In any event, I need to get back to vacation, but thanks again for keeping the discussion going. If only the good news came earlier (or later), I would have gotten little bells and whistles to celebrate the NBA coming to the state.

Ah well At least you know your Starbucks boycott worked wonders

BigRedJed · Jul 2, 2008

Uh... ...you're welcome?

And frankly, a settlement most likely means hoop in OKC this year. A lame-duck season does NOBODY any good, and only means more heartache and bad feelings for the next year in Seattle. Clean break. Also, Seattle is settling in part because they know it's their best chance of at some point bringing a team back to their city, and they'll need to get to work on that.

Big Red Ron · Jul 2, 2008

75 mill seemes like a lot to play here next year.

Collier11 · Jul 2, 2008

Not a law expert but I would guess that it is over a long period of time and can be reduced if the NBA goes back to Seattle. Im sure Stern said you lost the trial and if you ever want a team again, settle this now

birddog · Jul 2, 2008

i still don't see how schultz could build a java empire but not have the business sense to see what was coming when he sold the team.

****off dip****.

BigRedJed · Jul 2, 2008

He should have seen what was coming, considering at the time of the sale, he smilingly shared a news conference with the new owner who said, IN SAID NEWS CONFERENCE, "get something going on a new building or we're moving."

BigRedJed · Jul 2, 2008

Well, I had bad info on the Schultz suit. Still kicking. But they definitely don't think much of it, obviously.

RedStripe · Jul 2, 2008

We did it our way babyyyyy!!!!

illinisooner · Jul 2, 2008

http://www.nba.com/sonics/#/news/archive/article_faq080702

They're coming to OKC in the fall; new colors and name.

BigRedJed · Jul 2, 2008

888-618-HOOP to get on the list for ticket contact.

GrapevineSooner · Jul 2, 2008

For any lifelong Sonics fans, I feel bad for you.

But don't direct your blame at Clay Bennett. Direct it towards your idiotic city leaders that couldn't see the forest through the trees, never really worked with the Sonics to secure funding for a new arena, and when the writing was on the wall, tried a last ditch scorched Earth policy that failed miserably to the point that they accepted a buyout that doesn't even guarantee that they'll get another team.

reevie · Jul 2, 2008

Here's David Stern's press release

NEW YORK, July 2, 2008 -- NBA Commissioner David Stern has issued the following statement:
“We are pleased that the Sonics and the City of Seattle have settled their litigation. While the decision has been made to relocate the Sonics to Oklahoma City, the NBA continues to regard Seattle as a first-class NBA city that is capable of serving as home for another NBA team.

In order for this to occur, a state-of-the-art NBA arena must be funded and constructed in the Seattle area, a subject that has been extensively debated -- but not ultimately acted upon -- by local political and business leaders over the past four years. We are pleased that the City remains committed to addressing this fundamental requirement for the return of NBA basketball to Seattle and we hope that other elected officials critical to a solution will support the City’s efforts.

We understand that City, County, and State officials are currently discussing a plan to substantially re-build KeyArena for the sum of $300 million. If this funding were authorized, we believe KeyArena could properly be renovated into a facility that meets NBA standards relating to revenue generation, fan amenities, team facilities, and the like.

Assuming the funding can be committed, the league is willing to work with the City on the design and construction of the re-build to facilitate this result. Under these circumstances, if an opportunity arose in the future for an NBA team to be located in Seattle, we would support that team playing its home games in a re-built KeyArena, if it wished.

However, given the lead times associated with any franchise acquisition or relocation and with a construction project as complex as a KeyArena renovation, authorization of the public funding needs to occur by the end of 2009 in order for there to be any chance for the NBA to return to Seattle within the next five years.

We are pleased that Steve Ballmer has expressed the continuing willingness of his group, Seattle Center Investors, managed by Seattle developer Matt Griffin, to be a part of the solution for returning NBA basketball to Seattle. The NBA will keep SCI and the City informed if opportunities arise in the next five years for franchise sale, relocation and/or expansion. Under the circumstances outlined above, the NBA would be happy to return to the City of Seattle.”
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