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Wednesday, July 19, 2006 - Page updated at 04:12 PM

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Sonics, Storm on their way out?

Seattle Times staff reporters

The leader of the new ownership group for the Sonics and Storm said Tuesday he wants to "wipe the slate clean" and begin "good-faith negotiations" with local and Washington state politicians on a deal to renovate KeyArena or build a new arena.

Clay Bennett gave the city of Seattle 12 months to get the job done with his Oklahoma City-based group.

Previous owner Howard Schultz's team couldn't strike that deal, and if the new ownership group doesn't have any better luck, the teams could be moving to Oklahoma City — a possibility that some fans and local officials consider very likely.

After threatening for more than a year to sell the Sonics and Storm, Schultz on Tuesday announced he had sold the NBA and WNBA teams for $350 million.

Since purchasing the teams in 2001 from Barry Ackerley for $200 million, said Schultz, the chairman of The Basketball Club of Seattle, his group of 58 investors has lost more than $60 million. The reason for the losses, Schultz said, is a lease deal that requires the group to split luxury-suite and concession revenue with the city.

The new owners said at a news conference Tuesday they wanted to keep the teams in Seattle, but that they need a plan for a new arena or renovations to KeyArena, plus a new lease agreement, in place within 12 months.

We've heard this song before


By selling the Sonics, Howard Schultz joins some select company. Owners of Seattle pro teams who either moved or threatened to move teams to other cities:

Soriano brothers - Pilots

The team lasted just one season, 1969, and then moved to Milwaukee late in the spring of 1970 — on April Fool's Day. The buyer was a used-car salesman named Bud Selig, who had cut a secret deal with the Soriano brothers (Dewey and Max) to buy the team for $10.8 million during the 1969 World Series.

Jeff Smulyan - Mariners

A partnership led by Smulyan purchased the Mariners on Oct. 5, 1989. Smulyan threatened to move the team to St. Petersburg, Fla., before selling the club to Hiroshi Yamauchi and Nintendo on July 1, 1992.

Ken Behring - Seahawks

Behring purchased the Hawks in 1988 from the Nordstrom family. Eight years later, he tried to move the team to Anaheim, Calif., without the approval of the NFL. Paul Allen purchased the team June 30, 1997.

Howard Schultz - Sonics/Storm

The teams' majority owner sold the Sonics and Storm to the Professional Basketball Club LCC, headed by Oklahoma City businessman Clay Bennett, for $350 million.

Schultz said he was unable to persuade city and state officials to help pay for those renovations.

"Over a two-year-plus period, we were unable every step of the way to get the kind of respect and assurance that we would be able to either remodel KeyArena or build a new facility," Schultz said. "Over two-plus years of unbelievable, countless discussions and negotiations where you finally have to realize that we're not going to be successful.

"In view of that, how could we be competitive on the court if we had this kind of burden? The losses were continuing to pile up, and we had to seek another alternative."

Schultz sold the teams to the Professional Basketball Club, an Oklahoma City-based investment group led by Bennett, chairman of Dorchester Capital, a private investment company.

"We're committing to 12 months to receive assurances in the form of a formal agreement ... relative to a successor facility or [renovations] to the current facility that meets current and future NBA standards," Bennett said. "And an accompanying lease that would allow the team to have a vibrant financial future. We think that working within a deadline helps everyone understand where we are."

The New Orleans Hornets, who played in Oklahoma City last season after being displaced by Hurricane Katrina and are contractually obligated to play there again next season, plan to return to New Orleans for the 2007-08 season.

Bennett said the timing was coincidental, although he added that realistically, the negotiating window on an arena deal in this area is much smaller because the state Legislature convenes in January.

The Schultz-led ownership group made two unsuccessful trips to the state capital and offered to pay about $18 million toward a $220 million taxpayer-funded renovation project. But Bennett said "nothing has been determined and everything is open for discussion."

He also said he had no knowledge of the city's counterproposals, which included a $198 million deal in which Sonics owners would pay $49 million, a $149 million project requiring $37 million from the team, or a $50 million renovation at no cost to the team.

Mayor Greg Nickels' office says the Sonics never responded to the three renovation proposals for KeyArena.

What remains unclear is what happens after the 12-month period if the sides fail to work out a deal.

Bennett, the controlling owner of the Oklahoma City group in which five members have a majority share, said his group is contractually permitted to relocate next year. The agreement, however, is with the old ownership group and not with the city of Seattle, which has a lease with the Sonics through the 2009-10 season.

"There's no language in the lease that talks anything about a buyout," Sonics president Wally Walker said.

"We intend to honor the lease," Bennett said. "We just need to work through that as part of a global solution to the overall effort. It's certainly our intentions to fulfill our obligations."

Bennett, a self-proclaimed "proud Okie" who was born and raised in Oklahoma City, graduated in 1981 from the University of Oklahoma and promised basketball fans there he'd lure an NBA team to town, repeatedly said he was open to keeping the Sonics in Seattle.

He said he was committed to the area after a morning conversation with Gov. Christine Gregoire that he described as "very positive."

"The governor indicated that she understood our deal," Bennett said. "She felt it was a fair proposition and that she intended to work diligently and proactively to find a solution."

Political leaders said they were disappointed in the sale but pledged to work with the new owners to see if a deal could be reached to keep the Sonics in the state.

"I have to take them at their word," Nickels said of the new owners' statement that they want to keep the Sonics and Storm in Seattle if possible.

In a written statement, Gregoire said she was "encouraged that the new owners want to stay in the state."

Both Gregoire and Nickels said they had pledged to continue talks to keep the teams in Seattle.

Others said they didn't believe the teams will stay.

"I think they're gone," said Rep. Hans Dunshee, D-Snohomish, a vocal critic of the Sonics' requests for a taxpayer-funded arena expansion.

He said now that the Sonics have been sold, the cost to taxpayers of keeping the team here will be even higher than before. "It was a bad deal before," he said. "Now we'd have to give them our firstborn, a new car and the house."

Seattle City Council President Nick Licata, who had angered Sonics owners with statements that the team's departure would have little impact on Seattle, said the sale was not the fault of local politicians.

"This was a corporate decision that we couldn't influence," Licata said. "The owners had to decide whether to stay or take the profits, and they chose to take the profits."

Dunshee predicted the new owners will want to make it look like there's a chance they might stay in Seattle.

"If they do anything, they're just going to use us to leverage a better deal out of Oklahoma City. They'll just dance with us to mess with them," he said.

On the move


The Sonics haven't moved to Oklahoma City yet, but if they do, they won't be the first NBA team to leave town. Other NBA franchise moves:

1951: Tri-Cities Blackhawks moved from Moline, Ill., to Milwaukee and became known as the Hawks.

1955: Milwaukee Hawks moved to St. Louis.

1957: Rochester Royals moved to Cincinnati.

1957: Fort Wayne Pistons moved to Detroit.

1960: Minneapolis Lakers moved to Los Angeles.

1962: Philadelphia Warriors moved to San Francisco.

1963: Chicago Zephyrs became the Baltimore Bullets.

1963: Syracuse Nationals became the Philadelphia 76ers.

1968: St. Louis Hawks moved to Atlanta.

1971: San Diego Rockets moved to Houston.

1971: San Francisco Warriors moved to Oakland and became the Golden State Warriors.

1972: Cincinnati Royals moved to Kansas City and Omaha, carrying the name Kansas City-Omaha Kings. The team ceased Omaha operations in 1975.

1973: Baltimore Bullets moved to Landover, Md., and became the Capital Bullets. Name changed to Washington Bullets in 1974. In 1997, they move to Washington, D.C., and become the Wizards.

1977: New York Nets moved from Uniondale, N.Y., to East Rutherford, N.J., and became New Jersey Nets.

1978: Buffalo Braves became the San Diego Clippers.

1979: New Orleans Jazz moved to Salt Lake City and became the Utah Jazz.

1984: San Diego Clippers moved to Los Angeles.

1985: Kansas City Kings moved to Sacramento.

2001: Vancouver Grizzlies moved to Memphis.

2002: Charlotte Hornets moved to New Orleans. In 2005, forced out of New Orleans by Hurricane Katrina, the team played in Oklahoma City as the New Orleans/Oklahoma City Hornets.

Schultz said the teams had declined more lucrative offers, preferring to sell to a group that was committed to keeping the teams in Seattle. Sources indicated he received a $425 million offer from Oracle CEO Larry Ellison, who was expected to move the franchises to San Jose, Calif.

The Schultz group also had talks about relocating the teams to Bellevue or Renton and was unable to find a local group to purchase them.

Forbes magazine listed the Sonics' value at $234 million in a recent ranking of NBA franchises.

Edward Evans, chairman of Syniverse Holding and a controlling member of the Oklahoma City group, was the lead negotiator in the deal. He led an unsuccessful attempt to purchase the Washington Nationals and lure the Major League Baseball team to Oklahoma.

The Sonics contacted him 10 days ago and the deal quickly fell into place once Bennett, who was instrumental in Oklahoma City landing the Hornets, came on board.

Members of the new ownership group, along with Evans and Bennett, include prominent Oklahoma City businessmen Aubrey McClendon, chairman and CEO of Chesapeake Energy; G. Jeffrey Records, chairman of the board and CEO at MidFirst Bank; and Tom L. Ward, chairman and CEO at Riata Energy. The group also consists of several minority investors.

Walker will remain with the Sonics for about a year, said Bennett, who doesn't plan any major changes in the day-to-day operations of the team anytime soon.

The deal is tentative pending approval from the NBA Board of Governors, which expects to ratify the agreement in October.

Schultz, the chief global strategist of Seattle-based Starbucks, said he was aware of the potential backlash.

"It was not my intention to be in this position when we purchased the team five years ago," he said. "We were naïve in some areas but mostly optimistic."

As he left Tuesday's news conference at the team's practice facility, Schultz was greeted with a chorus of boos from fans.

Seattle native Aaron Morris, 18, held a sign that read: "39 years out the window." His friend Ben Conway, 18, of Seattle, carried a sign that read: "Don't sell my childhood to Oklahoma City."

"He's letting them potentially take the team away, which is a huge part of the community and this is a guy who is a Seattle icon," Conway said. "Now if they move, they can claim they had nothing to do with it when they had everything to do with it."

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

Staff reporters Yamiche Léone Alcindor, Ashley Bach, Sharon Pian Chan and Ralph Thomas contributed to this report.

Copyright © 2006 The Seattle Times Company

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