New Hope in Seattle?

Hayesfan · Apr 15, 2008

Invisible Fan said:

So why did Starbuck sell his team in the first place?
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Because he was losing 10 million dollars a year and wanted a shiny new stadium like the rest of the Seattle franchises have gotten.

ScriboErgoSum · Apr 15, 2008

Invisible Fan said:

So why did Starbuck sell his team in the first place?
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He was losing money, or at least he wasn't making much money. Even a renovated Key Arena is not bringing in that lucrative.

I think he was frustrated by the new arena deal failing, and he wasn't willing to move the team himself. It's a lot easier to let someone else blackmail your home city and possibly move the team you idolized as a child.

Clay Bennett also offered him way more than the Sonics were worth.

Schultz really would have been a fool not to sell.

Mailman · Apr 16, 2008

What's happening to Sonics fans is exactly what happened to Oilers fans.

If the Sonics were a playoff team, this wouldn't be happening. Moving a franchise with that kind of history would be a terrible move. The fans in Seattle deserve better.

doublebogey · Apr 16, 2008

The Seattle fans have no one to blame but Howard Schultz who prefered to sell the Sonics to out of state owner and sell it fast. Now, the Seattle fans see Schultz as the saviour of the Sonics? Poor souls.

Article Link

Sports and the Law: Don't Cry Over Spilled Coffee; Schultz's Sonics Sale Will Not Be Rescinded
Wednesday, April 16, 2008 7:50 AM - By Marc Edelman

For several years, Starbucks chairman and CEO Howard Schultz threatened to move or sell the Seattle SuperSonics, unless the city of Seattle increased his share of arena revenues. Then, on July 18, 2006, Schultz lived up to his word, selling the Sonics to an ownership group based in Oklahoma City, OK. Yesterday, however, Schultz -- mired in bad PR from selling the Sonics -- announced plans to sue the Oklahoma-based purchasers to get the team back, arguing that even though the ownership group fully paid Schultz his requested $350 million sale price, the new owners breached the purchase agreement by failing to make a "good-faith effort" to keep the team in Seattle as they promised to do in the sale agreement. This case seems like a clear loser for Schultz, unless, of course, he is able to benefit from a home court advantage (pun intended)...

Nevertheless, even if keeping the Sonics in Seattle would benefit public welfare, Schultz's proposed lawsuit to rescind a contract on which he was paid two years ago falls severely short in its legal merit. Although certain emails seem to indicate that the Sonics' new ownership group may have been privately planning to move the team to Oklahoma City from the very beginning of negotiations, this behavior alone does not likely provide grounds for complete rescission of a sale-of-franchise contract for lack of a "good faith effort." Not only is the issue of what constitutes "good faith" under this sort of clause vague, but, even more importantly, the doctrine of "substantial performance" states that performance is considered complete once the essential and material obligation is accomplished, and any shortfall from full performance thereafter is compensable only by monetary damages. The essential obligation of the new Sonics ownership group was simply to pay Schultz the full purchase price for the team, and the new ownership did that, paying a premium to boot. Under Washington state law, "if more than one promise is made [in a contract], each promise does not have to be substantially performed. Overall, substantial performance is sufficient." Mortimer v. Dirks, 57 Wash. 402, 107 P. 184 (1910). In other words, breach of a secondary promise not vital to the core of the contract itself is insufficient to rescind the contract in full.

Although one way potentially around the doctrine of substantial performance may involve bringing a separate claim based on fraudulent inducement, a fraud claim under Washington law similarly is a nonstarter. Under Washington law, Schultz would have to show convincing evidence of "(1) a representation of existing fact, (2) that is material, (3) and false, (4) the speaker knows of its falsity, (5) intent to induce another to act, (6) ignorance of its falsity by the listener, (7) the latter's reliance on the truth of the representation, (8) his right to rely on it, and (9) consequent damage." Pedersen v. Bibioff, 64 Wash. App. 710, 723 n. 10 (1992). Even without knowing all of the facts, proving element nos. 2, 3, 4, 6, and 7 each would likely present some difficulty for Schultz.
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Some more opinions

Article Link

Legal experts call Schultz suit a long shot
Battle over Sonics could take years to resolve in court
By CLAUDIA ROWE
P-I REPORTER

(Editor's Note: This story has been updated since it was first published. The school at which Marc Edelman teaches was misidentified in the original version.)

It is audacious, almost unheard of and unlikely to succeed, yet sports and legal experts around the country said they will be watching with interest if Howard Schultz sues the new owners of the Sonics in an effort to force them to keep the basketball team in Seattle.

Despite its quixotic overtones, Schultz's expected attempt to prove that Clay Bennett and his partners acted in bad faith when they promised to try to keep the team in the Northwest could set up years of courtroom litigation -- less a legal slam dunk than an exhausting chess match.

"It's a long shot, practically speaking," said Mike Hunsinger, a lawyer with long experience representing Seattle sports interests. "But if I were advising Bennett, I'd be telling him to prepare for trial. I would think that Mr. Schultz will probably take this pretty seriously."

Typically, Hunsinger said, such suits are seen as an attempt to squeeze more dollars from a buyer, but Schultz will be asking for a judge to rescind the agreement itself -- meaning that nothing short of a complete reversal would satisfy his request for damages.

"That's what makes this potentially unique," Hunsinger said. "This is not a shakedown lawsuit."

A series of e-mails discovered last week appears to indicate that Bennett and his partners always intended to move the team out of Seattle, and that disclosure seems to be fueling Schultz's claim.

"There are many definitions of what constitutes good faith and bad faith, and this might be an important enough aspect to the court," said Timothy Davis, author of "Sports Law and Regulation" and a professor at Wake Forest University. "It's not as spurious as you might think."

From New York to the Northwest, attorneys agreed that such a finding might be grounds for breach of contract, though they differed in their opinions of an ultimate outcome.

"This is absolutely bizarre and almost certainly a loser," said Marc Edelman, who teaches sports law at New York Law School. "I would be shocked if any court would rescind a contract where there's been substantial performance -- in this case, payment -- for failing to perform a small condition, which is subject to many interpretations anyway."

Even if a judge entertained the case -- and then made the bold move to void Bennett's contract -- the NBA itself could foil Schultz's plan by refusing to take him back as an owner.

Steve Calandrillo, who teaches contract law at the University of Washington, acknowledged that undoing the contract -- even with a breach-of-contract finding -- is highly unlikely.

And Lester Munson, an attorney and legal analyst for the ESPN sports network, said that in two decades of studying sports and sports law, he had never seen a move quite like Schultz's.

Returning the team to Seattle would be "drastic, melodramatic and rare to the point of being nonexistent," Munson said.

Yet he was reluctant to outright dismiss the coffee entrepreneur and his high-flying legal team. In certain areas, he believes, Bennett may be vulnerable.

"The NBA, obviously, is a monopoly, so antitrust rules apply and that may give Schultz some leverage here," Munson said. "Sports leagues hate antitrust actions because they really are a monopoly, a cartel."

He added that Richard Yarmuth, the attorney representing Schultz, has significant experience litigating antitrust issues. "That gives them kind of a nuclear weapon if they can figure out how to make this into an antitrust case. And he's just the guy to do it."

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