BY Art Thiel 04:50PM 04/22/2016

Thiel: NBA quite happy to leave Seattle vacant

Commish says NBA had “a great experience” in Seattle. Huh? Not for Sonics’ last years. But now? Sure. A bigger market without a team only helps the league’s extortion tactics.

Aerial view of Chris Hansen’s plan for the Seattle Arena disclosed Tuesday.

After saying for the umpteenth time that the NBA has no interest in expansion, Commissioner Adam Silver said something modestly interesting Thursday to the Seattle Times — interesting, if you’re willing to read between the lines and not be too emotionally invested in the return of the NBA to Seattle.

The Times sent reporter Geoff Baker to the Associated Press’s annual sports commissioners meeting in New York, where he questioned Silver about whether developer Chris Hansen’s increasing prospects for getting city council permissions to vacate a street to site his arena in Sodo will be enough to move the NBA’s needle toward expansion.

Predictably, Silver said expansion is not a priority, certainly not while collective bargaining is underway with the players’ union, whose deal with the league expires after the 2016-17 season. Until a new deal is struck, the league can’t know what its share of the revenue pie will be, nor whether it will be obtainable without a work stoppage.

So while the NBA will go through its traditional phony ritual with the union of claiming financial vulnerability, expansion can’t be on the table at that point. That is sensible.

The interesting part was how he spoke about not foreclosing on expansion eventually. Because as commissioner, he has an obligation to his bosses, the team owners, to fan the fires of a monopoly marketplace, in order to increase the fees for expansion, which help grow the equity value for each club.

“Organizations do tend to grow over time and I think that we’re no different,’’ he said. “There are some great communities out there that I know would be wonderful NBA homes. Seattle of course is one of those, and we’ve had a great experience there.”

Really? A great experience in Seattle? That is interesting.

At one time, that was true. But not after Howard Schultz bought the club in 2000.

Almost immediately, the baron of bean demanded public money to upgrade Key Arena, even though $100 million in public funds to do that were spent in 1995. Unwilling to pay much privately for the upgrades, a petulant Schultz in 2006 sold the team for a huge profit to out-of-towners hand-picked by then-Commissioner David Stern.

In 2007, anti-pro sports activists won a vote, by a 72 percent plurality, for an initiative in Seattle that required a small annual profit on a public facility leased by pro a sports team. The law remains unique in the American pro sports marketplace and an unparalleled outrage for the NBA, which saw it as a potentially viral threat.

By 2008, Stern gave his blessing to team owner Clay Bennett to sue his way out of town and relocate the team to Oklahoma City. In 2009, a locally produced documentary, Sonicsgate, a withering indictment of the NBA’s actions in Seattle, went national, was a critically acclaimed success and remains to this day a slam deeply resented among some NBA executives and owners because it dared to tell the truth.

So, the NBA had a great experience in Seattle?

Hardly. Unless Silver means . . . now.

The NBA is having a great experience now, because it has used the vacancy in Seattle to extort municipalities elsewhere to help fund new arenas.

Since the Sonics left, tax dollars in Sacramento and Milwaukee are paying at least half of the costs for new arenas to keep teams in town because local politicians were well aware of the eagerness by Hansen and scorned Sonics fans in Seattle to poach and relocate.

As has been written here several times, but somehow missed by some arena advocates, Seattle is to the NBA what Los Angeles was for 21 years to the NFL — a tool for extortion. Only until Rams owner Stan Kroenke unveiled a privately funded plan to create a $2 billion stadium/shrine/campus to pro football, did the NFL reluctantly agree to surrender its weapon and move back the Rams to the nation’s second-largest market.

While arena advocates and opponents in Seattle are wrapped around the incremental developments regarding a street vacation that would advance Hansen’s project, a non-involved reader of the timeline above could reasonably ask: Why bother?

The answer is simple: You never know.

Two words explain it: Donald Sterling.

Culminating a 33-year history of racial bigotry as a real estate developer and NBA owner,  Sterling in 2014 was banned for life, forced to sell the Clippers and fined $2.5 million by the league after his scorned mistress recorded and released racist remarks he made to her.

Whereupon Steve Ballmer, the Microsoft CEO and Hansen’s partner in the failed attempt to poach the Kings from Sacramento in 2013, bolted from the sloth-like Seattle arena process and bought the Clippers from Sterling’s wife for $2 billion cash.

While that story is familiar to many, take a step back and consider those two paragraphs and the degree of absurdity they contain. If you foresaw any of those developments, please tweet me your stock market views.

Can’t make up this stuff.

Another example: In the fall of 2008, shortly after the Sonics relocated to OKC, the economy tanked. The Great Recession hit the natural gas market so hard that Bennett’s moneybags partner in the poaching of the Sonics, Aubrey McClendon, was forced to sell a big chunk of his premium collection of wines just to stay afloat.

Speculation then was that if the city had had the guts in July 2008 to stay with a winning hand in the lawsuit to keep the Sonics, and the judge compelled the Bennett-owned club to stay in Seattle for the final two years of the KeyArena lease, the broke Okies reluctantly would have sold the club to Ballmer.

Stuff happens.

Minds change. Owners sell. Markets disrupt. Teams relocate. Leagues get greedy (make that greedier).

But unless Hansen advances his project to the acquisition of a master use permit (MUP) that authorizes construction, he will be in no position to take advantage of the unforeseeable.

It’s true that his chances of success even with a MUP seem small, but those chances are zero if he isn’t clear to break ground upon acquisition of a team.

Meantime, all it’s costing the city is the central staff’s time to investigate and modify a heavily privatized deal that could create a valuable addition to Seattle — but not before a team is assured of coming.

Since the signing of a memorandum of understanding among Hansen, the city and King County in 2012, Hansen has committed more than $100 million in capital improvements and public benefits to the project to satisfy environmental and safety laws, as well as  requests of the Seattle Design Commission and the Seattle Department of Transportation.

He’s even on the hook for an unspecified portion of cash for the Lander Street flyover, normally a city infrastructure expense that the Port of Seattle, Mariners and Seahawks have not seen fit to match for a road improvement project 13 years postponed.

The public ask from Hansen for his NBA team is $120 million in a bond loan, to be paid back out of annual operations. No new taxes, nor diversion of current taxes.

The deal has sufficient risk on the private side that, perversely, the commitments could be used by NBA owners privately as a reason not to support it: Bad precedent.

But for now, they’re already having “a great experience” with the Seattle situation just as it is.

 


YourThoughts

  • Tom G.

    Still think hockey needs to come first though. Preferably in SODO with the street cancellation granted and some kind of future “NHL-first” agreement and not the suburbs (Bellevue, Tukwila) or KeyArena, but I think hockey is what gets this built.

    • Jamo57

      I’ve felt that way for a long time too. Detractors look at that scenario and say there are too many obstacles for that to happen but in the spirit of Art’s column, it would continue the theme of “who could have predicted that?”

      • Tom G.

        The way I look at the NHL is this: Gary Bettman is an American commissioner, Bettman was hired to grow the pie by making hockey more of an American sport, the NHL seems to be in an expansion mood AND there’s 16 teams in the East, 14 in the West.

        Thus, the NHL is primed for 2 more western teams and adding a team in the Pacific Northwest as opposed to Quebec City (even though they have FANTASTIC fans) would be a logical and superb way for the NHL to grow the pie.

        The NBA, on the other hand, seems to think of us the same way the NFL thought of LA for MANY years. We’re basically “Leverage City” to them until proven otherwise.

        That’s why it just makes a lot more sense to me to go for the NHL right now even though the passion and history in this town resides on the NBA side.

        So my HOPE is Hansen gets to work on an “NHL-first” amendment upon getting the street cancellation instead of groveling to Adam Silver, but we’ll see.

        • art thiel

          I’m not saying it can’t happen, but the NHL knows a partnership with Hansen is second-hand. They know he wants hoops first. Before he convinces the city to rewrite the MOU, he has to convince NHL, and NHL has to find him a billiionaire who will accept Hansen’s arena deal.

          • Tom G.

            That’s fine. But the street cancellation has to be a part of this.

          • art thiel

            Of course. Not in dispute.

          • LarryLurex70

            Paging Victor Coleman!

    • Its onlySports(DavidWakefield)

      And it would bring together the mass multi~National pro sports fans by luring business from across the borders of British Columbia/Alberta to the Emerald City in offering fans eager to embrace a Vancouver Cannucks/Seattle Killer Whales hockey team to fruition…. huge cash in on that one.

      Or whatever the hockey name ends up being….

      • art thiel

        Yes, there’s Canuck bucks in the mix. But can anyone prove there’s enough American bucks?

      • LarryLurex70

        I wouldn’t count on on THAT much business from BC. You’re forgetting how expensive a proposition it is to even attend an NHL game. Now, you’re adding a border crossing on top of that, which surely would also likely include an overnight hotel stay. I think the majority of Canuck fans in the lower mainland would ultimately find it far more practical to stay in Canada and watch the home team on the telly. I mean, really, how much of a spike did Canadian NBA fans provide Ackerley’s Sonics before the expansion Grizzlies arrived?
        I don’t think it bodes too well nor looks too favourable if Seattle’s NHL chances of survival depend, even slightly, on visiting Canuck fans tired of seeing their home team continually lose during the rebuild process.

    • art thiel

      Maybe, but the mayor, council and staff are skeptical of hookup with a sport unproven in the market. Hell, the NBA after 41 years failed in the city.

      • Gary

        The NBA did not fail, the ownership and gm failed catastrophically. The self proclaimed king lined up his buddy and the bean head sold out the city in a act childish of spite. So I guess you are right, you can never rule out which Three Stooges episode will play next! The sad thing is you can’t even get away from the slime anymore just going to a high school game!

        • art thiel

          The NBA was a big part of the failure, claiming Key was state of the art in 95, then having a lockout in 99 that failed to fix its broken economics, and daring by 02 to say the Key was too financially obsolete to sustain the NBA.

          The NBA failed Seattle. Never believe otherwise.

          • Gary

            Exactly! The Boston Gardens for years was the absolute worst arena in basketball, never heard threats to move that team.

          • LarryLurex70

            And, to that end, why was a remodeled Coliseum in the form of Key Arena ultimately deemed not viable as an NBA gym? Yet, cities with remodeled/refurbished gyms in Oakland and NYC were never given the same build-it-brand-new-or-else ultimatum from David Stern that Seattle did?

  • 1coolguy

    Excellent column Art – Extremely informative.
    As to Schultz, the “baron of bean” is a perfect moniker. The reason Schultz will forever be scorned in Seattle, whether a person is a Sonics fan or not, is as a billionaire, he had the juice to keep the Sonics until an owner was found that would commit to keeping them in Seattle. Instead he flexed his unabashed greedy self and knelt to making a profit, suffering fan amnesia attack that caused him to forget that local sports team owners are not only business owners but essentially are in a “trustee” position, whereby the local asset is never relocated. His selling to OKC was essentially a dishonest double-cross and will follow him forever. To think he couldn’t put together an ownership group to sell to is a bridge too far: As a local example, a call to Allen could have given him a whole list of probables.
    Also, there is absolutely no long term motivation by the NBA owners to expand in exchange for a one-time pop for an expansion fee. They would be not only splitting the pie forever, they would also have more teams to compete with for talent, further diluting a weak league, player-wise.
    I never knew about “Sonicsgate” and will pull it up to watch. Here’s the link”
    http://documentaryheaven.com/sonicsgate-requiem-for-a-team/

    • SeaRaays

      The only thing most people leave out was that Shultz was a minority owner and his vote would not matter because the majority of owners were pressing hard for sale. It was probably because of losses in the market…and from the team?

      • 1coolguy

        Actually he may not have been the majority owner, BUT he had control. The operation, including the sale, was HIS, under his control.
        This is an excellent article by the News Tribune’s sports writer Frank Hughes to read:
        http://espn.go.com/nba/columns/story?id=2525634&columnist=hughes_frank

        • bugzapper

          His ego had control. He’s Seattle’s quintessential SuperSchmuck, and any Sonics fan who still goes into a Starbucks for anything other than taking a dump should move to OKC.

        • SeaRaays

          I thought that Shultz and the 10 other partners bought the team in 1998? Per the story of 2001. That story was basically an emotional hit piece. But thank you. You tried to dig up some information. It was a true hit piece with out any information other then the writer emoting all over the place. Trying to understand what happened. Personally I think the trade for of Peyton was a good one for Ray Allen. The NBA is a mess. The only true profit machine in pro sports is the NFL. The rest you have to have a strong owner group and stadium and tv deal to stay put for a long time.

          • art thiel

            Schultz and 57 partners bought the team from Barry Ackerley in 01. Hughes’ story was not a hit piece. It was a dead-on explainer.

          • SeaRaays

            Explainer ok.. is it true he only owned about 12 percent. Was it also or could be true…that he had to deal with all the owners complaints and try to run the team as the majority owner. He wrote the hardest part of doing the Sonics was keeping the Owners happy with showing a profit and bright future. That he was constantly pressured to sell by most owners. He was not prepared to take losses and deal with so many different voices. If he had to do it over again not to have it as a business to take up all his time dealing with so many owners that he had to make complacent. Just have a couple of partners with a long term commitment. Becoming rich in the 90s …everyone believed investments should multiply. This one were spiraling down like a bad over fat dot.com.

        • art thiel
      • art thiel

        No one was a majority owner, but Schultz had the most, a little more than John Stanton. And Schultz took the lead in getting out, most of his partners happy to avoid another cash call to cover annual operating losses.

    • rosetta_stoned

      Schultz lost me when he promoted Wally Walker instead of firing him.

    • art thiel

      Schultz proclaimed often that he was a mere steward in public service of a valued civic asset. Then when he couldn’t work his charm on a state legislature that rightly wanted to his skin in the game, his true character came forward.

  • Jamo57

    I had some great experiences with my ex-wife too. Then we got married….. ;-)

    • Peggywharris3

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    • Its onlySports(DavidWakefield)

      I wrote my 2 cents worth and then I read your offering…..well said. Good Show, mate.

      That SEA/NBA relationship was showered with a World Championship in 1979…still one of the best Rags to riches sagasin all of pro sports….perhaps the best David /Goliath small market success that pure NBA History has to offer. Great tie in on that one.

      • art thiel

        The late Seventies, the entire NBA was a small market.

        • 1coolguy

          Pre-Bird/Johnson

          • LarryLurex70

            And pre-David Stern

      • Jennifer Knighton

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    • art thiel

      Not a bad analogy, Jamo. NBA can’t get over some dark things in the relationship.

  • MrPrimeMinister

    And there you have it folks. The one angle which no sonic fan dare not speak for. The one item so verboten, that not even Art Thiel himself would dare address. The one block on which the house-of-cards argument stands on but which is now ready to come tumbling down in a heap. To paraphrase, Phil Silver is now on public record as stating the Key Arena–good ol Seattle Center Coliseum–CAN IN FACT be made hospitable enough to house a future NBA team.

    • 1coolguy

      Apparently you, unlike me, were never a Sonics season ticket holder. Every commute to the game was a NIGHTMARE, unless we got off work early then drove over to lower QA for an early dinner (there weren’t many options). And the team sold in 2006: Do I have to go into how much WORSE traffic is now?
      Also, if you have been in a modern arena, the footprint and square footage of the Key are so small, it limits the site for any expansion, which is what is needed to build a 21st century, competitive arena.
      To even MENTION the Key as an NBA site is like saying the Kingdome compares as a baseball stadium to Safeco: Not even in the same universe.

      • MrPrimeMinister

        hey, I didn’t say it, silver did.

    • bugzapper

      Put down the crack pipe.

    • Jeff Shope

      silve never said that the tool geoff baker spun it that way. And for the 80th time NOBODY wants to put money into to Key so its a DEAD issue

      • MrPrimeMinister

        Silver just brought it back to life. It would appear the master(stern) has taught the student well. I am stocking up on popcorn, things are going to get very interesting in this town.

    • Kirkland

      Problem is, NHL Commissioner Gary Bettman says the Key is a non-starter for hockey. Small building (some seats make you look BEHIND to see one of the goals), and small capacity (13,000). I don’t see how you can improve on that with a remodeled Key, given the tiny footprint. Building just one arena to accommodate both sports makes better sense, and that’s SoDo.

      • MrPrimeMinister

        I don’t think phil silver cares about NHL or whether or not hockey will work at the key arena. he is not concerned about hockey. he runs the NBA. if you or i says keyarena won’t work, big deal. If the commissioner of the NBA proclaims that keyarean will work, then people have to listen. I am not sure people are understanding the significance of what he said. It blows up any current pending deals or arrangements.

        • Kirkland

          Two errors: 1) If there’s nobody who wants to rebuild the Key, his so-called proclamation is useless. Even Bellevue had more concrete plans than the Key, undesirable for a developer because of its public land location and infrastructure issues. Until some billionaire offers a credible financing and architectural plan, they Key is a non-starter. 2) You misspelled his last name; it’s Phil “Silvers”. Didn’t you watch the credits of “McHale’s Navy”? :P

          • MrPrimeMinister

            Oops, got my silvers mixed up. But big picture-wise, does his name really matter? We all know what he is going to do to seattle basketball fans.

          • art thiel

            You have more than your silvers mixed up.

            The idea of a KeyArena remodel is an artifice to keep Hansen’s project tied up past the MOU expiration.

        • SeaRaays

          Either league needs giant subsidies to stay afloat. It would be one black mail after another. Just look at the history it is always doomed to repeat. You can blame anyone you want if you have to rely on public funds to pay for entertainment and sports that pay multi millionaires to play and billionaires crying poverty.
          It is a hard sale for the thinking public that are not emotionally connected to enjoy sitting and watching a sport. Someone said religion is the opiate of the masses( Marx). Well so is the mob effect of supporting team sports ….it gives you the same tribalism effect with other fanatics of that sport. Turns you into fast allies or bitter enemies.

    • Playhouse

      Adam “Phil” Silver also admitted he hadn’t read the AECOM report about KeyArena and really knew nothing of the specifics of any remodel. So, speaking from an uninformed position, he gave as basically lawyerly an answer as he could possibly give: Let Seattle sort out its own arena situation. If that’s a new arena, good. If they can sort out a new arena solution at the old site, good on them. We’re not advising one way or the other so as to be legally accountable in any fashion.

      • MrPrimeMinister

        But he did say, again, based on what we know was reported, that contemporary stadium refurbishments are vastly improved over ones from 20 years ago. Which could be percieved a couple different ways.

        • art thiel

          Silver is playing both sides against the middle. Like any commish seeking to pit fans against electeds.

    • art thiel

      If you mean comedian Phil Silvers, Sgt Bilko is dead.

      If you mean the other comedian, Adam Silver, he said no such thing. He admitted he had no idea.

  • 3 Lions

    Add to the ‘can’t make this stuff up’ column McClendon’s suspicious death in March after being indicted by a federal grand.

    • art thiel

      I was going to mention that. His death is shockingly weird, but not a direct tie to events of 08.

      • 3 Lions

        According to the Reuters article McClendon was in the process of transferring business interests from his company Cheseapeak Energy to Clay Bennett’s company Dorchester Capital shortly before McClendon’s death. It certainly makes you wonder about that relationship over the years given the nature of McClendon’s business dealings. Meanwhile, the NBA seems to have avoided much scrutiny about the OKC ownership group.

  • rosetta_stoned

    NHL franchise? Yes.
    NBA? Nope. Never.

    I said I was done with the NBA in 2008, and I meant it.

    • Its onlySports(DavidWakefield)

      And the Joker throws his villainous head back while spewing out incessant laughter to all of those fans carrying that grudge with them…..

    • art thiel

      You should have spoken at one of the arena hearings. No one has offered that viewpoint in that forum.

  • Its onlySports(DavidWakefield)

    The incessant laughter of the Joker when Dealing with the Batman character comes to mind…a nemesis that most likely will never be written out of the Batman series script….yet the Question from the good guy(s) is always invoked with…. Is this “REALLY” worth the pain and agitation? And follow up is(Batman’s family doctor warns of massive stress to come so please weigh in on the ramifications please).
    Does anyone in town(ok~Gotham) remotely enjoy his personality or tactics?How do we manage to “rid the region” of this heartache in disguised warpaint with whom we could never ever trust again?
    Meanwhile the man always seems to meet you with Narcissistic views of his world and unrealistic demands often with blackmailing style overtones.
    What a lovely bunch those NBA sorts are…..

    • art thiel

      We get loyalty from our pet dogs. The NBA, as with all pro and college leagues, gets loyalty from money.

  • Paul Harmening

    Hmm…Seems the City and County are pretty good extortionists as well as the NBA. $100 million from Hansen in capital improvements and public benefits with more promised? Hansen seems like a pretty smart dude with all that he’s accomplished in the financial arena but…this? Somethings missing that’s not being said.

  • Bryan Wachter

    This is why the NBA is not allowed on TV in my house! Furthermore, I think it should be banned from the Seattle market. Blackout the games, don’t show it in bars and don’t report on it in the newspapers. I don’t read it anyway.

  • Sonics79

    This paragraph breaks my heart, because I believe that’s exactly what’d have happened if Mayor McCheese didn’t take the $40M to drop the lease..

    “Speculation then was that if the city had had the guts in July 2008 to stay with a winning hand in the lawsuit to keep the Sonics, and the judge compelled the Bennett-owned club to stay in Seattle for the final two years of the KeyArena lease, the broke Okies reluctantly would have sold the club to Ballmer.”