BY Art Thiel 03:03PM 07/01/2011

Thiel: A fine time for Seattle to be without NBA

If Seattle had the Sonics under Ballmer’s ownership, he would be trying to get out of KeyArena, but unable to get a new building partly because he’s locking out players. Yeesh.

The long-planned lockout by NBA Commissioner David Stern is underway. This time, Seattle gets to sit out this dance. / Noel Vasquez, Getty Images

Whew.

Close call.

Imagine if in the summer of 2008 the city’s political leadership played its winnable hand in court and kept the Sonics and Clay Bennett in town for the remainder of the KeyArena lease.

Now where would the city and team be?

When the financial crisis hit three months after Seattle folded its winning hand and released the Sonics for cash, Bennett and his oil/gas cabal that owned the franchise were in serious money trouble. They could well have bailed out and sold the team to Microsoft CEO Steve Ballmer for around $400 million.

The Sonics would have continued on the past three seasons with NBA leading scorer Kevin Durant, and probably would have provided compelling basketball – while losing money annually.

But today the franchise and city would be facing an entire season without 41 home games and playoffs, and would not be much closer to building a replacement for KeyArena, whose one-time plan for a $300 million model financed partly by Ballmer would have collapsed under an avalanche of public resistance.

Bennett and pals would be laughing ($4 a gallon), and Ballmer would have been even crankier than he was at Seattle Rotary this week, because he’d be wishing he’d let Bennett finish the hijacking.

Fanciful scenario? Only a little.

From the fans’ standpoint as well as civic prestige, it would have been better to have kept the Sonics. But the financial peril would have put Ballmer and pals in position to be bad guys (not that Ballmer isn’t used to it). The lockout launched Thursday by the NBA would have put another gaping wound in the Seattle Center budget that would be hard pressed to get covered by a municipal government that is shaking change from parking meters to make ends meet.

The NBA’s economic travail is far more grim than the one in the NFL.

The football owners had no travail; they were all operationally wealthy, and sought huge give-backs from the players because the league presumed it had diabolical leverage to exploit in a showdown with the union.

The owners knew they could bully the TV networks, ravenous for football programming, into subsidizing a strike fund by paying from future earnings.

They were right about the TV nets melting like a popsicle on Texas asphalt. They were wrong about how a court would view the tactic. As much as anything, that is why NFL owners and players are working fast to solve a problem they didn’t really have.

The NBA has a problem.

A bad collective bargaining agreement, obtained in part from the lockout in 1998-99, has Commissioner David Stern claiming piteously that 22 of 30 teams lost money during what was considered by most a highly entertaining season.

Whatever the dollar truth of their hand-wringing, here is just one example of the hideous system that should not even be given a cigarette and blindfold before being shot: The expiring NBA system permitted teams to call players out of retirement and pay them millions to sit on a bench in order to achieve aggregate-salary levels to make trades. Figuratively speaking, that means the players are worth more dead than alive.

Anyone see a problem here? Thought so.

Without delving further into the merits and demerits of the labor issues (I know, the NFL fine print was so compelling that it seems a shame to pass on another good read), the big picture looks like this: The basketball owners are sufficiently desperate that they long ago prepared for the 2011-12 season to be sacrificed for their greater good.

How do I know? Bennett told me so, over dinner in the first month of his ownership in 2006, before he grew the full set of horns and a tail in Seattle. To make the Sonics purchase, Bennett had to know from Stern the long-term plan.

Since I still believe Bennett, at purchase, thought he could be a big fish in a big pond, he imagined the scenario playing out in Seattle. But wherever the team was, Stern knew the system long ago was broken. He also had to be honest with a potential newbie owner. So he committed to fix it starting in the summer of 2011 – at whatever the price.

What Stern didn’t foresee in 2006 was financial collapse in ’08, which has made economic life perilous for many and more pressurized for discretionary entertainments like the NFL and NBA. But it also made easier his decision to abandon Seattle. Stern knew then and now that his sport has a better chance in one-horse towns like Portland, San Antonio, Salt Lake City and Oklahoma City, rather than in bigger markets with competition from MLB, NFL and even the NHL.

His continuing, almost child-like demonization of the state and city politicians over the Sonics departure is an easy way to distract from the truth of the NBA’s economic vulnerability in numerous markets. It may well be the biggest reason he granted a one-year stay of execution for the Kings in Sacramento: The risks are high in crowding the Los Angeles market with a third team, while Sacramento is a one-horse town that has clearly embraced the NBA when done right.

But ranking with that reason is the obvious fact that attempting to fire up a new franchise in Anaheim is easier with a welcoming parade rather than a dead season.

Getting back to the scenario in Seattle where the city wins its court case and keeps the Sonics, had Bennett sold to Ballmer, the economic crisis also likely would have thwarted the proposed remodel of the Key.

Ballmer offered to split with the city the $300 million cost of another Key re-do that almost certainly would have died for lack of public money. While that would have freed him to pursue a privately funded arena, it was obvious in his Rotary comments this week that he intends to keep his fulltime job and expects others, such as the commercial real-estate community, to take the lead in any arena development.

Despite rumblings about an arena plan for Bellevue, it seems logical that when Stern in the summer of ’08 talked with Ballmer about his potential ownership, he had to be as candid with him as he was with Bennett about the planned-for lockout and potential loss of an entire season, and obvious consequences to a project that would need one and possibly two anchor tenants.

Even though the three-year absence of the Sonics, particularly given the quality of subsequent performance in Oklahoma City, remains galling and agonizing for Sonics fans, now that the long-anticipated lockout is here – for a good while – an economic argument is easily made that sitting out the dance until the NBA figures out the music, lights and buffet menu is not the worst thing.

Stern long ago planned for this high-risk, high-reward strategy. Were the Sonics and Ballmer part of the fracas, they would find themselves openly trying to create a way to abandon a debt-ridden KeyArena, while supporting a lockout that further damages local businesses as well as a financially crippled city government by denying a season’s worth of revenues and debt payments. The risks would be even higher here, and the ugliness more profound.

Not saying all of these consequences equates with the loss of the Sonics. But when a league and its union engage in major financial blood-letting, there is great virtue for markets to be spectators rather than participants.

Stern, Bennett,  et al, get to figure this one out without the help of Seattle.

You go, boys.


YourThoughts

  • Tian Biao

    . . . with howard schultz walking away as a big winner.

  • Tian Biao

    . . . with howard schultz walking away as a big winner.

  • Jerry

    When I really miss the Sonics is, of course, during basketball season when the Huskies are the only show in town.  But with each year that loss seems to fade a bit more.  This winter, if there is a lock out, I will be almost glad they are gone.
      Oh Thank you. Stern, Schultz and Bennett,  and Merry Christmas to you all.

  • Jerry

    When I really miss the Sonics is, of course, during basketball season when the Huskies are the only show in town.  But with each year that loss seems to fade a bit more.  This winter, if there is a lock out, I will be almost glad they are gone.
      Oh Thank you. Stern, Schultz and Bennett,  and Merry Christmas to you all.

  • http://manywordsforrain.blogspot.com/ Mr Baker

    Or… The politicians that have since given me the “chicken-egg” arguments would have been figuring out (in public) how to keep a new arena from sprouting up in Bellevue (like they are now) and could use the Seattle 2% of the convention center sales tax credit (passed last year, part of the Tim plan) and the Seattle portion of the Hotel tax (from the bill passed 6 weeks ago) as the “public portion of the Key Arena remodel that would take 24 months if the building is occupied, or 16 months is it is empty (as it currently is). Ballmer would have to front load that funding until those other two would be available for the payment schedule.

    Both funding sources Tim Ceis was lobbying for passed in separate bills, in different years. An unoccupied building could be remodeled much quicker, with not Tacoma Dome season.

    What we would have “avoided” if Nickels hadn’t taken a dive was a new arena and NHL hockey, maybe in Bellevue. Wow, that was a close one.
    We are all playing the hind sight game today.

    • Jerry

      The day Wally Walker talked Schultz into selling the franchise to Clay Bennett was the day Seattle lost the Sonics.  Where were all the local hi-tech billionaires then?  Or, did Walker and Schultz even bother to contact any of them?
      Nickels took a dive all right,  but only after all the other key players in the fiasco had laid claim to  the softest spots on the canvas.  

      • http://manywordsforrain.blogspot.com/ Mr Baker

        Jerry, watch Sonicsgate free at Sonicsgate.org

        (Art is in it)

  • http://manywordsforrain.blogspot.com/ Mr Baker

    Or… The politicians that have since given me the “chicken-egg” arguments would have been figuring out (in public) how to keep a new arena from sprouting up in Bellevue (like they are now) and could use the Seattle 2% of the convention center sales tax credit (passed last year, part of the Tim plan) and the Seattle portion of the Hotel tax (from the bill passed 6 weeks ago) as the “public portion of the Key Arena remodel that would take 24 months if the building is occupied, or 16 months is it is empty (as it currently is). Ballmer would have to front load that funding until those other two would be available for the payment schedule.

    Both funding sources Tim Ceis was lobbying for passed in separate bills, in different years. An unoccupied building could be remodeled much quicker, with not Tacoma Dome season.

    What we would have “avoided” if Nickels hadn’t taken a dive was a new arena and NHL hockey, maybe in Bellevue. Wow, that was a close one.
    We are all playing the hind sight game today.

    • Jerry

      The day Wally Walker talked Schultz into selling the franchise to Clay Bennett was the day Seattle lost the Sonics.  Where were all the local hi-tech billionaires then?  Or, did Walker and Schultz even bother to contact any of them?
      Nickels took a dive all right,  but only after all the other key players in the fiasco had laid claim to  the softest spots on the canvas.  

      • http://manywordsforrain.blogspot.com/ Mr Baker

        Jerry, watch Sonicsgate free at Sonicsgate.org

        (Art is in it)

  • 3 lions

    Certainly more insightful than Steve Kelly’s spiel… The Sonics will be back one day, we will just have to get it figured out. If the Sounders can be viable how can’t we put a deal together for the NBA, Stern withstanding?
    That being said, I don’t look forward to seeing Ballmer in a green t shirt courtside screaming at the ref. Sports arena’s need to be privately financed, we should know that now.

  • 3 lions

    Certainly more insightful than Steve Kelly’s spiel… The Sonics will be back one day, we will just have to get it figured out. If the Sounders can be viable how can’t we put a deal together for the NBA, Stern withstanding?
    That being said, I don’t look forward to seeing Ballmer in a green t shirt courtside screaming at the ref. Sports arena’s need to be privately financed, we should know that now.

  • http://www.derekmyoung.com Derek Young

    I miss the Sonics of yesteryear, but the NBA lost me over the course of the last decade.

  • http://www.derekmyoung.com Derek Young

    I miss the Sonics of yesteryear, but the NBA lost me over the course of the last decade.

  • G. Robert

    Awesome article.  You go, Art!

  • G. Robert

    Awesome article.  You go, Art!