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Saturday, November 13, 2004 - Page updated at 12:00 A.M.

Sonics
Stern speaks out for Sonics

By Percy Allen
Seattle Times staff reporter

David Stern
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NBA commissioner David Stern met yesterday with civic leaders, including members of the mayor's office, to lobby on behalf of the Sonics as the team attempts to renegotiate its lease for KeyArena, which expires after the 2009-10 season.

Both sides admitted that the current deal isn't fiscally viable for the city or the Sonics, but no one has presented a workable solution.

"There seems to be pretty good understanding on the part of the city government about what the issues are and the recognition that ownership is determined to work toward a win-win solution to keep this team here, in the Key and perhaps a newer and better Key," Stern said. "And that's a recognition for everybody. There have been some changes."

Those changes include new publicly financed stadiums for the Mariners and the Seahawks, Stern said.

"Now there are these two subsidized teams, which changed the climate for selling suites and club seats and sponsorships," he said. "And we've had a collective-bargaining agreement, which drives up salaries based upon the revenues in other cities."

On opening day of training camp, principal owner Howard Schultz estimated the Sonics' losses since he led a local group that purchased the team in 2001 for $200 million at "tens of millions." According to Dwight Dively, director of the city's Department of Finance, KeyArena lost $2.2 million in 2002, $1.4 million in 2003 and is projected to lose $1.7 million this year.

The losses in large part are because of the Sonics' recent dropoff on the court as well as the growing popularity of the Mariners and Seahawks, Deputy Mayor Tim Ceis said.

"We recognize that some of these major corporations are now diverting their sporting dollars into Safeco and Qwest Field and that's been a problem for them," he said. "At one time, there was only KeyArena in terms of luxury suites. ... That's not the case anymore. There's more competition."

Renovations to the former Seattle Coliseum, which was remodeled and renamed in 1994, were financed with a $73.4 million bond that is scheduled to be retired in 2014 through the sale of suites and premier club-seat sales.
 
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"I think that in both of those cases, it's clear that they need to rebuild an arena to compete," Stern said. "In this case, I think what they need in the short run is maybe a better economic relationship to allow them to compete and in the long run, perhaps a reconstructed building."

The request hasn't fallen on deaf ears, but Seattle Center, which owns and operates the arena, faces a $9.4 million deficit at the end of the year, according to a City Council report. Ceis said renegotiating the city's KeyArena lease and using public dollars to remodel KeyArena hasn't been entirely popular among council members, who believe that the Sonics could reverse their fortunes by consistently reaching the playoffs as they did in the 1990s.

"If we sold every ticket and every suite to every game this year, we would lose money, a very significant amount, and be significantly below the NBA average next season," Sonics CEO Wally Walker said. "What has changed since 2001 is players' salaries have continued to escalate at a greater rate than we can generate revenue."

Informal discussions with the mayor's office, Walker said, began months ago and are ongoing. He said the team needs a clear understanding within one year about where it will play after 2010. Walker also acknowledged the Sonics have been approached by several developers about plans to move out of KeyArena.

The Sonics, according to sources, have also considered moving outside the city, including a possible move to South King County.

Stern, the featured speaker at the Sonics Tip-Off Luncheon, benefiting the Sonics & Storm T.E.A.M. Foundation yesterday, said moving the team out of Seattle is an unfavorable option that has not been discussed.

"We're the Seattle Sonics and we'd like to remain the Seattle Sonics," Walker said. "That's our plan."

Percy Allen: 206-464-2278 or pallen@seattletimes.com

Copyright © 2004 The Seattle Times Company

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