SBD/Issue 142/Franchises

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  • Howard Schultz Filing Suit To Rescind Sale Of Sonics To Bennett

    Schultz Seeking To Have His
    '06 Sale Of Sonics Rescinded
    Starbucks Chair & CEO Howard Schultz, who in '06 sold the Sonics to current team Owner Clay Bennett, is "preparing to file a lawsuit against [Bennett] to rescind" the sale, according to Percy Allen of the SEATTLE TIMES. Seattle-based law firm Yarmuth Wilsdon Calfo (YWC) attorney Richard Yarmuth said that his firm will represent Schultz and plans to sue Oklahoma-based Professional Basketball Club, the Sonics' ownership group, in the next two weeks. Yarmuth: "It's not money damage. It's to have the team returned. The theory of the suit is that when the team was sold, the Basketball Club of Seattle, our team here, relied on promises made by Clay Bennett and his ownership that they desired to keep the team in Seattle and intended to make a good-faith effort to accomplish that." Bennett paid $350M for the Sonics and the WNBA Storm, and as part of the deal he "agreed to a stipulation that he would make a good-faith effort to keep both teams in Seattle." However, as reported last week, Sonics investors Tom Ward and Aubrey McClendon in August '06, two weeks after the sale, sent a series of e-mails about moving the team to Oklahoma City "as soon as possible." Yarmuth said that the e-mail exchanges, which also included Bennett, "detail a breach of contract." Yarmuth also cited comments made by McClendon in '07, in which he said, "We didn't buy the team to keep it in Seattle; we hoped to come here (Oklahoma City)." Yarmuth: "The issue is did the Oklahoma group fraudulently induce the Seattle owners, Howard Schultz and the other owners, to sell the team on a misrepresentation of their intentions at the time." Schultz, around the time of the sale, said, "As part of the negotiation, I asked for something that was a deal breaker in negotiation. What I asked for was a side letter to our ownership group and to me ... that said basically [Bennett] would honor the four-year [KeyArena] lease in terms of the 2010 terms, and use his best efforts over the next 12 months ... to get something done." Neither Bennett spokesperson Dan Mahoney nor NBA VP/Basketball Communications Tim Frank could be reached for comment (SEATTLE TIMES, 4/15).

    Stern Says That He Feels Sonics Owners
    Have Been Negotiating In Good Faith
    AN HONEST EFFORT: NBA Commissioner David Stern yesterday said that he "had not looked closely" at the e-mails but added that he "believes Bennett acted in good faith to keep the team in Seattle." Stern: "My sense of it was that Clay, as the managing partner and driving force of the group, is operating in good faith under the agreement that he made with Howard Schultz." Stern also said that "'extraordinary efforts' were made to seek an interested local ownership group to keep the team in Seattle when Schultz sold the team, but none was found" (Tacoma NEWS TRIBUNE, 4/15).

    ROCK THE VOTE: In Seattle, Johns & McNerthney report the NBA BOG Thursday or Friday will meet in N.Y. and is scheduled to vote on Bennett's request to relocate the Sonics to Oklahoma City. A spokesperson for Washington Gov. Christine Gregoire said that she is drafting a letter to the NBA "that will be co-signed by numerous political leaders in the state in an effort to present a case for keeping the Sonics in Seattle." The relocation also is contingent on a trial between the city of Seattle and the Sonics' owners or "some other sort of resolution of the KeyArena lease." Meanwhile, the Sonics yesterday sent a letter to season-ticket holders, indicating that "no renewals will be accepted until the team's future is clarified" (SEATTLE POST-INTELLIGENCER, 4/15). Meanwhile, the Oklahoma House of Representatives yesterday approved a measure that would give Sonics owners "financial incentives" if the team relocated. The state Senate is expected to take up the measure later this week. The bill would "expand the state's Quality Jobs program to include major league teams," which would amount to about $4M annually for the Sonics (DAILY OKLAHOMAN, 4/15).

    REAX: In Seattle, Jerry Brewer writes Schultz's "dire attempt to right his wrong is the longest of all shots. And though he probably won't admit it, he's motivated in part by a desire to suppress fan anger. If Seattle becomes an NBA ghost town, he doesn't want to walk around fearing for his coffee beans" (SEATTLE TIMES, 4/15). Suns President & COO Rick Welts, formerly Sonics Dir of PR, said of the Sonics' situation in Seattle, "It breaks my heart, but at the same time I understand it. But even if the team leaves, I believe there will be another NBA team. It would be the most attractive (U.S.) city not in the NBA." Welts added: "If an arena is built, I just think the market would be incredibly attractive for another NBA team. But that's my heart talking. There's not much I can do about it professionally." Welts said of Stern, "It's a subject I don't discuss with him because it's too personal for me" (SEATTLE POST-INTELLIGENCER, 4/15).

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  • Bobcats Owner Asks Local Businesses For Increased Support

    Johnson Says Charlotte's Business Community
    Not Giving Bobcats Enough Support
    Bobcats Owner Bob Johnson yesterday said that Charlotte's business community "has fallen short in its support" of the Bobcats, leading him to ask execs across the region to "pony up more money for tickets, suites and sponsorships," according to George, Bonnell & Oliver of the CHARLOTTE OBSERVER. Johnson: "I am absolutely concerned. I am doing everything I can to make this team work, including writing a lot of checks." But some Charlotte business and government leaders have said that a losing team is a "tough draw, that the Bobcats face more competition for entertainment spending than the [Charlotte Hornets] and that Johnson hasn't been highly visible as an owner." Johnson said he has lost "significant money" since purchasing the team in '03. Johnson has spent "several days in Charlotte this month, using that time to personally appeal to the heads of major companies ranging from Wachovia to Harris Teeter." Johnson said that he "wants more 'real, hard financial support'" from businesses as several private suites and club seats are up for renewal this year in the newly named Time Warner Cable Arena. Johnson's "big stake has left him making up the difference in team deficits." Johnson: "I didn't expect to be making money at all, but (I expected) not to lose as much." While Johnson declined to say how much he has lost, a source familiar with the team's business operations "placed those losses at $50[M] or more." Charlotte City Council member Warren Turner: "[Johnson's] got to put a product on the court. Charlotte's not going to support a losing anything." Former Bank of America Chair & CEO and Bobcats investor Hugh McColl said that he will "keep buying tickets, and he hasn't seen any significant signs of anemic business support." McColl: "If anything, I think enthusiasm is building. Hopefully next year we'll have a playoff contender, and we'll see things pick up" (CHARLOTTE OBSERVER, 4/15).

    PEANUT GALLERY: In Charlotte, Tommy Tomlinson writes of Charlotte business leaders letting Johnson down in terms of team support, "The short answer is, [Johnson's] right. The long answer is, Charlotte ain't the town it used to be." Tomlinson: "Now we've been burned. The Hornets left us. Building a new arena turned into a knife fight. Those big companies are shedding jobs. And a lot of those gleaming new houses are under foreclosure." He added: "Very little of that is Bob Johnson's fault. It's just bad timing" (CHARLOTTE OBSERVER, 4/15).

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  • Knicks Offer Free Food, Drinks At MSG For Fan Appreciation Night

    Knicks Offer Unlimited Free Food
    During Fan Appreciation Night
    The Knicks last night hosted Fan Appreciation Night at MSG for the team's final home game of the season, giving all fans unlimited free food and non-alcoholic drinks starting one hour before tipoff, according to Peter May of the BOSTON GLOBE. The giveaway was a first at MSG, and team merchandise also was on sale with discounts up to 30%. MSG Senior VP/Sports Marketing Howard Jacobs said the promotions were announced "to find a meaningful way to show our fans our appreciation" (BOSTON GLOBE, 4/15). On Long Island, Neil Best reports MSG "drastically beefed up staffing and supplies," though Jacobs would not say by how much. The Knicks are 23-58 on the season, and Jacobs said, "We know it's been a difficult year on the court, but tonight is really about saying thank you." All normal menu items were available, and Jacobs added that he believed the giveaway was "unprecedented in major pro sports" (NEWSDAY, 4/15). In N.Y., Marc Berman notes the lines were "speedy and fans behaved with decorum." One fan said of the giveaway, "It's like a bar mitzvah with an NBA game as dessert" (N.Y. POST, 4/15). The N.Y. TIMES' Howard Beck writes the Knicks thanked "their irrationally loyal, perpetually tormented fans." Though the team called it Fan Appreciation Night, the fans "surely would have traded the food for a higher-ticket item, namely the termination" of Knicks coach Isiah Thomas (N.Y. TIMES, 4/15).

    CHECKETTS WEIGHS IN: Blues Owner and former MSG President Dave Checketts in a radio interview yesterday said of Thomas: "The bottom line is that with the highest payroll in the history of the game for years and years, he doesn't have a playoff win to show for it. That's how you make that evaluation." Checketts added the Knicks do not have an "environment that demands winning, that expects winning and the kind of character guys that want to win" (1050ESPNRADIO.com, 4/15).

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  • New Ballpark Has Yet To Deliver Increased Attendance for Nats

    Nationals Failing To See Attendance
    Bump From New Ballpark
    The Nationals this season through seven home games at the new Nationals Park have a paid attendance average of 28,214, which is about 5,400 less than the team averaged at RFK Stadium in '05, its inaugural season, according to Barry Svrluga of the WASHINGTON POST. Sports marketing experts indicated that the attendance, which ranks 20th out of the 30 MLB teams, "reflects the difficult challenges the Nationals face in a crowded market.'' Leffler Agency President Bob Leffler: "Sometimes, (a fan base) just doesn't come because you're new or have a new stadium." Since '92, 16 existing MLB teams have moved into new ballparks, and "none has drawn a smaller crowd for its second home game than the Nationals," which on April 7 drew 20,487 fans for a game against the Marlins. Svrluga notes the Presidential Seats, located behind home plate "aren't sold out, creating a striking view of empty seats from the center field" TV camera. Nationals officials said that the team has sold about two-thirds of the ballpark's 78 suites. But Nationals Owner Mark Lerner said, "I think so far everybody's having a great experience when they're here" (WASHINGTON POST, 4/15).

    TROUBLE? In DC, Mark Zuckerman noted it is "evident that the organization overestimated how much fans are willing to spend to sit in the lower decks of a stadium, brand new or not." The Presidential and Diamond club seats, priced at $325 and $170, respectively, "didn't appear to be even half-full for any game" last week. Nine other MLB clubs have opened new ballpark's since '00, and five of the teams, the Giants, Cardinals, Phillies, Padres and Astros, all averaged more than 35,000 fans per game in their park's first season. The four clubs that drew less than 35,000 per game, the Brewers, Padres, Reds and Tigers, all had losing records. Zuckerman wrote for the Nationals, a "more reasonable goal this season would be 2.4 million, which roughly equates to 30,000 a game." But Zuckerman added all the "paranoia over parking and traffic appears to have been overblown." Few of the fans "who bought parking passes near the ballpark, or took Metro to the Navy Yard station or took advantage of the free RFK Stadium shuttle have offered up significant complaints" (WASHINGTON TIMES, 4/14). In Baltimore, Jeff Barker reported industry observers are "stunned" by the low attendance at Nationals Park so far this season. Former Maryland Stadium Authority Chair John Moag: "The folks in DC have experienced a new baseball stadium, and that's Oriole Park. So the novelty of a new park isn't so novel." In DC, however, Moag added, "It's really early, and it's tough to make conclusions" (Baltimore SUN, 4/12).

    CHARITY CASE: Meanwhile, in DC, Brigid Schulte reported the Washington Nationals Dream Foundation Saturday at Nationals Park unveiled the Wall of Dreams, a collection of 1,026 gold-, red-, blue- and green-stitched baseballs in the center field plaza in an "effort to raise money to help the community." The color of stitching on the ball corresponds to the amount of the donation, ranging from $250 for red to $5,000 for gold. The funds from the Wall will be used to help build a kids' baseball academy in Ward 7 in DC, a new pediatric diabetes wing at Children's National Medical Center, and to support a local Boys & Girls Club and nonprofit Earth Conservation Corps, both located near the ballpark (WASHINGTON POST, 4/13).

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  • NHL Franchise Notes: Canadiens' Game Atmosphere Praised

    Writer Lauds Canadiens For
    Recent Game Presentation
    In Boston, Kevin Paul Dupont wrote: "One thing is certain, the Canadiens know how to stage a hockey game like no one else, and they deserve nothing less than an A-plus-plus for event presentation." Last week's Bruins-Canadiens matchup attracted a sellout crowd of 21,273 at the Bell Centre as the team used "light and sound to blend their storied past with their present, mixing songs by U2 with heroics" by Hockey HOFer Maurice Richard. The team was "more engaging to the home crowd, and the underlying truth always will be that nothing gets people excited more than winning." Dupont: "Hockey has always been king in Montreal" (BOSTON GLOBE, 4/13). Meanwhile, in Montreal, Mike King reports the demand for team pennants is “outpacing the supply” from Hunter Canada. Pending Canadiens flags orders through April 21 are 65,000. Hunter Canada VP/Sales Anita Chandan said that the flags "will account for 80[%] of April sales” (Montreal GAZETTE, 4/15).

    FLAMES: Flames officials have "started punishing scalpers in-house," meaning they are banning people who sell their seats for a profit. Flames VP/Ticket Sales Rollie Cyr: "This past season, we canceled 32 season tickets after we found out they were scalping tickets at a significant premium." In Calgary, Michael Platt reports last week "another handful of playoff tickets were declared null and void, as Flames' management investigated the sale of seats at prices way above face value." Cyr said that the '07-08 season "found the Flames dealing with a new form of ducat devilry: Forgery." Because tickets purchased online are "of the self-print variety, there's nothing to stop a con artist from making multiple copies." Once a bar code on a ticket is scanned at the Saddledome, "further copies will be rejected" (CALGARY SUN, 4/15).

    Islanders Finish Last In Attendance
    For Second Time In Last Three Years
    ISLANDERS: The Islanders this season finished last in NHL attendance for the second time in three years.  ESPN's published attendance records for '08 show the team averaging 13,640 fans at home games this season, and "25th in terms of attendance as percentage of capacity." Islanders Senior VP/Sales, Marketing & Operations Chris Dey, however, said that the team "reached its highest paid attendance" since the '02-03 season and ranks "third in the NHL in paid attendance increase, third in group sales," and doubled the amount of sellouts this season from six to 12 games (NEWSDAY, 4/15).

    CAPITALS: Capitals Owner Ted Leonsis, in a Q&A with the WALL STREET JOURNAL's Justin Scheck, said of Forbes magazine reporting the team is worth $145M, or 28th out of 30 NHL teams: "The Forbes numbers are the biggest (expletive) joke I've ever seen. But we bring it upon ourselves because we don't publish our numbers. A banker who did our numbers, based on comparables, said our value would be [$225-250M]." When asked what the league can do to get a better TV deal, Leonsis replied, "My belief, and what I've been advocating, is we've lost the TV war. ... We wanna be, and we're becoming, the leader in growing digital media" (WSJ.com, 4/10).

    CANUCKS: In Vancouver, Iain MacIntrye reports the Canucks fired GM Dave Nonis yesterday, and the dismissal “changes everything and will almost certainly lead to other major changes.” Nonis’ “chief failing this season was that his defence couldn’t stay healthy.” Meanwhile, Canucks coach Alain Vigneault’s job also is likely in “jeopardy as Nonis’s successor will presumably want to hire his own coach” (VANCOUVER SUN, 4/15).

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