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Originally published June 9, 2008 at 12:00 AM | Page modified June 11, 2008 at 11:07 PM

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Sonics

Seattle vs. Sonics: Trial starts next week, if there's no settlement

Next week a judge must try to untangle a dispute that has grown only more complex since the city sued the team nine months ago.

Seattle Times staff reporter

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When the city of Seattle filed a lawsuit against the Sonics owners nine months ago, legal experts said the case would never see the inside of a courtroom, that it would end in a financial settlement long before a trial.

But chances of a pretrial resolution appear slim just one week before the start of a trial that will begin to decide if Seattle's oldest professional sports franchise will move to Oklahoma City, home to the group that bought the team from Howard Schultz in 2006.

Seattle Mayor Greg Nickels is determined to hang onto the Sonics, who began playing in Seattle in 1967. If the team leaves now, the NBA is unlikely to return in the near future.

The Sonics, whose move has been approved by the NBA, want to begin play in Oklahoma City next season.

The issue for U.S. District Judge Marsha Pechman, in a six-day bench trial in federal court in Seattle: Will the Sonics be forced to honor the remaining two seasons on their lease at KeyArena?

If the Sonics win, the moving vans will begin warming up — although an appeal by the city could slow down the team's plans.

If the city wins, the Sonics would be stuck in Seattle for two more seasons. Or, the city could try to leverage a better deal out of the Sonics to allow them to leave early.

The dialogue between the team and the city had been terse. And that's when they were even talking — they haven't engaged in meaningful negotiations since February.

"It's always a good idea to talk," Seattle City Attorney Tom Carr said. "It's usually a failure if a case ends up getting to trial. Generally, there's a solution to every problem."

Carr would not speculate on the prospects for a pretrial settlement; nor would Dan Mahoney, spokesman for Sonics chairman Clay Bennett.

In April, Bennett urged civic leaders to make a counterproposal after the city rejected his $26.5 million offer to buy out the final two years of the lease and move the team to Oklahoma City next season.

At the time, Nickels said, "We're focused on keeping the team here," and the lack of dialogue between the city and the Sonics owners since then suggests both sides are prepared to begin arguing their cases in front of Pechman next Monday.

Four-way conflict

ESPN legal analyst Lester Munson said a settlement in lease disagreements occurs "90 percent of the time." But this case is unusual because it involves several parties, including Schultz, who is also suing Bennett. And Oklahoma City is threatening to sue Schultz if he wins his suit and the team doesn't move there.

"The people in Oklahoma City sent a [nine-page] letter in May taking a very strong position that they expect a team," Munson said. "With them taking that tough a position, I don't see how this case can settle now. It makes it more difficult for the city of Seattle, for Bennett, even for Schultz, with Oklahoma City now trying to intervene.

"A dispute that had three parties [the Sonics, Seattle and Schultz] now has four. It becomes very complicated. Everybody is making these demands. They're all thinking they are proceeding on matters of high principle. When you see the posturing and the language and the legal positions, the idea of settlement is vanishing into the horizon."

Several factors have hindered settlement talks. For starters, Nickels is unequivocal in his desire to have an NBA team in Seattle far beyond the end of the Sonics' lease in 2010, despite resistance by state lawmakers to helping fund renovations to KeyArena. (Bennett's $500 million plan for a new arena in Renton also got nowhere in Olympia.)

The city's lawsuit unearthed embarrassing e-mails from the team's ownership, which angered Bennett and NBA commissioner David Stern, who described the city's tactics as "scorched-earth policy."

Sources with the team suggested last week that Bennett would keep the Sonics name, history and colors if he's forced to play two more years at KeyArena and incur an expected $60 million in losses. He previously had expressed a willingness to leave the name behind for a possible future Seattle team.

New team unlikely

At the NBA Board of Governors meeting in April, Stern said league owners are not in favor of expansion domestically, and that relocating another team is an imperfect science.

Stern also said he'd lose any desire to help Seattle secure another team if the city continues with its lawsuit and the team leaves.

"Commissioner Stern is not going to guarantee a team for Seattle," Munson said. "Even if he had the authority to do it, he is not inclined to do it. He is very angry and very unhappy with the Seattle market because it provided for football and baseball and did not provide for the NBA. He is taking a very unforgiving position on that."

However, during a news conference Sunday at the NBA Finals, Stern did not rule out returning to Seattle. "We don't have any specific plans for replacing the team," he said. "But that doesn't preclude us from revisiting Seattle at a later date."

Munson likened the standoff to a high-stakes game of chicken: "We're in a real stare-down here. That's what it is, although it's not so much that somebody is trying to make the other side blink. It's that all four think they have righteous positions."

Expecting a deal

Steven Pyeatt, co-founder of the Save Our Sonics group, said last week he believes a settlement will take place before the trial ends.

"I think a settlement will happen before anybody from the NBA has to go on the witness stand," Pyeatt said. "The point of the settlement is to avoid the embarrassment of anybody going on the stand and talking about the NBA's broken business model."

Carr, however, said history isn't likely to repeat itself. "It's very rare for a case to settle during the trial," he said. "But then, this is the most unusual trial that I've been associated with, so anything is possible."

If the trial proceeds to conclusion and Pechman makes a ruling, Munson said the loser is likely to appeal the verdict, which could take a year or longer to resolve, and virtually guarantee the Sonics will play another season in Seattle.

"I expect the city to prevail in the trial, but after that I'm not sure what's going to happen," he said. "We can expect Bennett and his group to appeal that decision, and that will take a while. Then Schultz and his case, which is a real landmark, take over."

Schultz is suing Bennett for breach of contract, contending the Sonics owners did not make a good-faith effort to keep the team in Seattle. Schultz is seeking to rescind the sale.

"In that one, anything can happen," Munson said. "If Schultz should win, then you have Oklahoma City wondering if it's going to sue everybody."

A victory for the city means Seattle would be tied to a lame-duck team for two more years. Or the city could have more leverage for a possible post-trial settlement.

Carr said that a win for the city would also buy civic leaders more time to find a funding solution for KeyArena renovations, which might entice the NBA to remain in Seattle.

A Sonics win — putting Bennett a step closer to taking the team to Oklahoma City — could be the biggest loss of all in franchise history.

USA Today reported Stern's Sunday comments. Percy Allen: 206-464-2278

Copyright © 2008 The Seattle Times Company

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