Selling out the Sonics

The rising hopes in Seattle that yesterday evening's court decision might allow the Sonics to stay in town were quenched by a sudden downpour: a metaphorical one as the city inexplicably reversed course and allowed the team to buy its way out of the lease only an hour before Judge Marsha Pechman's decision came down, followed by a an actual downpour later in the evening as the weather rose to the occasion and provided the proper mood for the occasion.

This is quite the change in tactics for the city. Prior to this, their entire case had been about how no amount of money could replace the Sonics. Former Seattle Center director Virginia Anderson testified about the team's importance to the city as a cultural instution to the city, local writer Sherman Alexie spoke about what the team means to the fans and a horde of economists on both sides discussed the intangible benefits the team provides (to varying degrees of success). The arguments, the evidence and the witnesses all focused on one thing: no amount of money would replace the Sonics.

The city's position had always been that they were only interested in specific performance and didn't care about the money, which is why they rejected Clay Bennett's $26.5 million offer back in February. At that time, city attorney Tom Carr (one of the principals in this new settlement) told The Seattle Times, "The city's intent is to hold them to the lease." Well, when it looked like the city had a good chance of doing just that, they folded faster than a collapsing deck chair or a poker player holding a 2-7 offsuit.

A key culprit here is Seattle Mayor Greg Nickels, who made perhaps the boldest reversal. As he revealed in his own testimony, when his staff were approached by PBC in July 2007, he said, "My instructions [to the staff] were that we were not interested in the buyout of the lease." My, how his tune has changed.

The most bizarre thing about this is the timing. If the city had perhaps waited an hour for Judge Pechman's decision, they may very well have found out that they won specific performance. That would have left them in a much stronger position to either hold the team to their lease or unequivocally demand a rock-solid guarantee of a replacement team before letting the Sonics leave. Even more importantly, it would have meant that Howard Schultz's lawsuit for all the marbles (to overturn his sale to Bennett based on violation of the "good-faith" clause) would have been in pretty good shape, as the case will be heard before the same judge and focuses on many of the same issues and much of the same evidence.

If Judge Pechman had ruled in favour of the city on this case, there would have been a strong chance that she might have ruled in favour of Schultz on the next one. That's not a guarantee, but keeping the team here for two more seasons would have helped with the timing of Schultz's lawsuit (it takes away the need for a restraining order), and even if Schultz's effort had failed, it would have brought even more of Bennett's dirty laundry out of his closet, er, his e-mail inbox and led to more negative publicity for both him and the NBA, perhaps increasing the pressure on him to sell to local ownership. Enforcing the lease for two years also would have allowed for more time to secure a KeyArena renovation, which would have taken away one of Bennett and the NBA's main cards to play in calling for a franchise relocation.

Even a loss in this case wouldn't necessarily have been the end of the road: the city certainly still would have received considerable financial reparations if PBC was allowed to break the lease, Schultz still would have had a strong case, and there still would have been the potential for a reversal upon appeal. Instead, Mayor Nickels, who proclaimed on the stand, "The longer that this team is here, the more possibilities might open up to keep this team here for the long term," decided to cut that term far shorter than it might have been in favour of some quick cash and a vague promise from the NBA that they'll let Seattle know when a team becomes available. That and $5 might get you a cup of coffee at Schultz's Starbucks, especially considering that there will be plenty of interest in any team that comes up. It's ludicrously stupid to abandon a case where you probably have a better-than-even chance of winning outright and keeping your team in favour of a settlement that only guarantees you a few lousy millions in cash, allows the buccaneers to walk off with your beloved franchise, and perhaps affords a 15-20 per cent chance at best of ever getting another franchise (note: percentages given are based solely on my analysis of the situation).

There are still a couple rays of hope that glimmer, but they're faint. The only way this decision isn't moronic is if you read between the lines of its wording, which referred to a statement by NBA commissioner David Stern as a prior condition for the memorandum of understanding drafted in the settlement case. Stern's statement basically says that the NBA is happy to see the case settled and would consider allowing a new franchise to play in KeyArena if it was renovated quickly according to the Steve Ballmer/Matt Griffin group's plans.

Yes, that doesn't mean much on the face of it, but it's a considerable turnaround from Stern's comments the last time that plan was brought up in March, when he shot down any renovation scheme. We all know Stern is slippery, and that change of proposal may not mean too much in the long run, but it also may be significant. In fact, there's a good chance it offers substantial insight into what actually went down here.

Here's my construction of how this settlement came about, based solely on educated guesswork building off some of the facts:

Facts: The team and the city were at absolute loggerheads to this point. They pulled out all sort of evidence attacking each other in the trial and fought a dirtier battle than most mud-wrestling championship matches. They refused all previous settlement proposals, and were ridiculously far apart on a potential end-game scenario: the Sonics proposed paying $10 million, while the city was determined to stick to specific performance.

Guesswork: There's nothing in there to suggest a settlement was coming any time soon, especially at this late hour. Thus, the key question to ask is "what changed?" As I see it, there are only two potential options.

First, David Stern decided that he was sick of all the negative publicity around this case and especially didn't want to see the battle go on any longer. In this scenario, he phones up the city and PBC, essentially promises the city a replacement team if they agree to settle and go away and if they're able to get the requisite funding for a new arena. For some reason, this assurance cannot be specifically put into the memorandum of understanding, but it can be hinted at. Possible reasons for that could include Stern not being willing to commit to anything until the arena financing comes through (anything but a certainty, given Seattle voters' current aversion to publicly funding stadiums), Stern being his usual slippery self and leaving an exit so he can say he never actually promised, or Stern's desire to avoid the perception that Seattle's long legal fight deserves a reward.

Facts that support this premise include the similar situations that happened with the Seattle Mariners and Cleveland Browns, where litigation was resolved in favour of "replacement team" settlements, the language in the memorandum about the NBA statement being a necessary precondition for the settlement (although NBA.com's timestamp has it being released to the public 40 minutes after the start of the press conferences) and the city's abrupt and sudden reversal of their previous policy: it would be great to think that they got some more substantial assurances than were contained in the actual document before deciding to roll over and play dead.

The second possible option is much worse. In this one, there really is little to no hope. The Seattle leaders either were deceived by slick promises of franchises with little to substantiate them, figured their constituents might be, or decided that it would be better to try and avoid a big loss rather than going for the big win. In this scenario, they figured it was more advantageous to take the available money and run instead of running the risk of losing much of their leverage. That may at times be an acceptable strategy in the wider world of life, but it doesn't often work in the world of sports: it makes zero sense to kick a field goal on the last play of the game and lose by a respectable three instead of going for a end-zone Hail Mary that could either get picked off or win you the game.

At the moment, we don't know which of the scenarios is the real truth. Personally, I certainly hope it's the first one. I hope the city knew what it was doing, and I hope that this is much better thought out than it appears. I can't shake the suspicion that it's really the second scenario that went down, though, and that Seattle's leaders sold the Sonics for a mere $75 million (and possibly only $45 million) and a bag of empty promises. It's not a good time to be a Seattle sports fan: in addition to the Sonics tragedy, the Mariners recently fired their manager and GM and have the worst record in the American League to go with the sixth-highest payroll in the majors and the Seahawks recently cut one of their most famous players, meaning things don't look great for them either. Perhaps the only bright spot for Seattle would be the new MLS team, which hasn't even begun play yet. The rest of the Seattle world is also depressing: Bill Gates has left Microsoft, Starbucks is axing jobs and Boeing's getting fined. In any case, the depression and gloom might lead to renewed prominence on the national music scene: if Nirvana found so much to be unhappy about in 1990s Seattle, just imagine what a band in today's Seattle could complain about!

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