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Minute-by-minute: Day 1 at Seattle vs. Sonics trial
05:30 PM PDT on Thursday, June 26, 2008
KING5.com is providing minute by minute coverage of the lawsuit by the City of Seattle vs. the Professional Basketball Club, LLC (The Seattle SuperSonics).
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4:07 p.m. - After some debating over another piece of evidence is presented, objected to and debated over for several minutes, Judge Pechman says testimony is over for the day. Clay Bennett will not be taking the stand today, so expect him to take the stand early tomorrow after testimony with Singh finishes up. The City's attorneys say they expected to be a little further along than they were now. After Bennett, the attorneys plan to call Aubrey McClendon by video, expert witness Andrew Zimbalist, Sonics CEO Danny Barth and others. Court is in recess until Tuesday.
3:51 p.m. - Singh says when KeyArena was upgraded and reopened in 1995, it got lots of praise from the Sonics and others. The City wants to present the video of NBA Commissioner David Stern in a 1995 interview praising KeyArena. The defense objects as heresay. Judge Pechman asks why she needs to see it since Stern is not here to respond -- it's basically a relevancy question. The interview was done by Mitch Levy of KJR Sports Radio, who was not allowed to be a witness in the trial. The objection is sustained and the video is not played.
3:45 p.m. - Narver asks Singh if anything has changed at KeyArena since PBC bought it in 2006 (Is it smaller? Is the locker room not as nice? Is there structural problems?) Singh answers no. Singh the sound, lighting and suite level and other items have been upgraded either at the Sonics and NBA's request or with the help of the Sonics
3:35 p.m. - After a brief re-direct, Anderson is done. Now on the stand is Jyo Singh, Director of Commerical Facilities and Events for Seattle Center.
3:32 p.m. - Taylor goes back to the task force report and the finding that even if the Sonics sold out a season, it would still be making $6 million less than the NBA average. Anderson responds, saying that doesn't take into account other forms of revenue besides attendance. She also says that doesn't mean the Sonics would lose money, but she couldn't go into detail about the rest of the financing.
3:30 p.m. - Anderson testifies that revenue could double if the Sonics were a playoff team, in terms of advertising, attendance, concessions, etc.
3:21 p.m. - Anderson says it was former Sonics owner Barry Ackerly who didn't want to make KeyArena larger than it is because he predicted there would be a downturn in revenue. Taylor then asks Anderson about why 30 percent of season ticket holders aren't using their tickets (He does not say where he got this number from). Taylor goes into questions about the excitement the Sonics are supposed to bring to the city, including some refernce to Starbucks leaving, but Anderson deflects the questions. Taylor gets off the line of questioning.
3:17 p.m. - Anderson agrees that both sides took risks under the KeyArena lease. She admits both sides are now losing money, but won't agree to Narver's assertion that both sides have lost in the deal.
3:10 p.m. - Anderson testifies that in 1999, revenue at KeyArena started going down. This is the same year Safeco Field opened. "We believe we saw a significant impact when Safeco Field opened." Anderson admits luxury suites had something to do with it. This was followed by Qwest Field opening, the Everett Events Center opening and a recession.
3:03 p.m. - Back from recess. Anderson continues to testify about how the KeyArena renovation was paid. Taylor then asks Anderson if the KeyArena lease was going well until Safeco Field arrived, which Anderson agreed.
2:48 p.m. - Court in afternoon recess. Back shortly after 3 p.m.
2:40 p.m. - Cross-examination by Paul Taylor for the PBC. He's asking Anderson about the financing for the remodel of the old Coliseum into KeyArena that was done after lawmakers failed to approve public money. Part of it was the sale of luxury suites and club seats. Taylor says the Sonics have paid upward of $115 million to pay for part of that renovation,
2:36 p.m. - Anderson and Narver going over the renovations of the Coliseum into KeyArena. Showing photos of all the work that was done.
2:27 p.m. - Several exhibits regarding the lease and the ordinances leading up to it are now being presented. In the lease itself, it says the SuperSonics shall play exclusively in KeyArena until September 1, 2010. Anderson says the City wanted a 20 year lease, but the Sonics (owned then by the Ackerly group) only wanted 10 years, so they compromised at 15 years. Anderson agrees there is no opt-out clause if the NBA business model changes or if another stadium is built in town,
2:20 p.m. - Anderson expands on how she believes the Sonics are important to KeyArena and therefore important to Seattle Center as a whole. On a side note, KING 5's Chris Daniels just returned from Mayor Nickels' press conference after his testimony. He took no questions, basically just saying that the City wants to enforce the lease and that the Sonics are trying to break it.
2:16 p.m. - Narver presents exhibit 40 - a memo from Anderson to then-Mayor Norm Rice. The memo mentions the fact that KeyArena (then known as the Seattle Center Coliseum) was small for an NBa facility (14,500 seats) and was showing its age (it was originally built for the World's Fair). The memo says the goal was to rebuild the Coliseum into a state-of-the-art facility,
2:10 p.m. - Next witness is Virginia Anderson, president of the Safeco Insurance foundation and the former director of Seattle Center, where KeyArena is based. She is being questioned by Greg Narver for the City. She's giving a basic layout of what the Seattle Center is and how it operates.
2:07 p.m. - Re-cross by Keller. Keller asks if being optimistic is a good thing but losing $60 million is a bad thing. Nickels says yes. Nickels agrees that between the City and the PBC, the legislature has been approached four times in recent years and no arena legislation has passed. Nickels leaves the stand.
2:05 p.m. - Nickels admits again he was against a Renton arena due to the competition it would bring KeyArena, but he says he did not lobby against it. Nickels also says the reason he wants the KeyArena lease upheld is to increase the chances legislation cam be found to keep the team here. When asked why he is still fighting, Nickels responded "I am an eternal optimist."
2:00 p.m. - Nickels testifies he would be willing to renegotiate the KeyArena lease with anyone, whether it's Bennett, Schultz, Griffin or anyone else, as long as there was a return for the public. Nickels says Bennett has never offered to contribute any money to renovate KeyArena, but Nickels says he'd engage in discussions for a renovation if Bennett contribued money. Nickels agrees there is nothing in the lease that says the team can leave if the NBA business model changes, the Sonics lose money, the new owners don't like the lease or if a new football or baseball stadium is built.
1:52 p.m. - Keller's done. Redirect by Lawrence. He's bringing up the KeyAren subcommittee report from February 2006 which Nickels acknowledges shows that KeyArena needed improvements to be financially viable. Lawrence makes the point that this report was available several months before PBC bought the team.
1:45 p.m. - Keller is now challenging the City's assertion that the Sonics are a civic benefit. He's also asking why the city had to file an ordinance on the eve of filing the lawsuit saying it would fight to uphold the KeyArena lease. Keller shows a Seatle PI article from August 2007 quoting Deputy Mayor Tim Ceis, who called the ordinance basically window dressing.
1:40 p.m. - Back on the stand, Nickels is questioned by Keller about the $300 million KeyArena renovation proposal in which the city was asking the state to give King County permission to approve $75 million in - a plan the state never brought to the floor. He asks Nickels if the city could have handled that $75 million itself, which Nickels responded yes, theoretically. Keller also asks Nickels about the history of voters approving Seattle sports stadiu Nickels says voters approved Qwest Field but rejected Safeco Field and that lawmakers found another way to do Safeco Field.
12:02 p.m. - Court is in recess for lunch. Back at 1:30 p.m.
11:58 a.m. - Nickels admits under questioning that the last two Sonics games he went to were a playoff game and when Gus Williams' jersey was retired about seven or eight years ago. (That time frame was presented by Keller. Williams' jersey was actually retired in 2004). Keller then goes into a string of questions about the Mayor's efforts to attact business to Seattle and whether any potential businesses said an NBA team was an important reason for coming, to which the mayor basically said no. When asked if Seattle would still be a first class city without the Sonics, the mayor said yes.
11:55 a.m. - Keller presenting evidence showing former Sonics President Wally Walker meeting in July 2007 with a member of Nickels' administration. Keller says it's in regards to a potential plan in making things financially difficult for the PBC through litigation. Nickels admits that when the City hired law firm K&L Gates, it was setting aside $1 million for the case. But, Nickels said there was no agreement with Walker to make the PBC financially bleed through litigation. Nickels says he was just trying to uphold the lease.
11:45 a.m. - Nickels testifies that he supported a potential sale to the Ballmer/Griffin ownership group, but did not work toward it. Now a video is being shown in earlier testimony in which he indicates he was working toward that.
11:37 a.m. - Defense exhibit 527 presented, which is a letter signed by Mayor Nickels and the Seattle City Council to Gov. Christine Gregoire on April 17, 2006. The letter shows that the mayor and council telling the governor that a new facility built outside Seattle would hurt KeyArena. Nickels agreed that even as PBC was lobbying for a new arena, the mayor and council did not change that stance.
11:31 a.m. - Keller now asking Nickels about the spring 2007 efforts by the PBC to get an arena in Renton. When asked if that would be a bad thing for KeyArena, Nickels testifies "It would be a bad thing for KeyArena." Keller asks Nickels about wanting to tack on an additional $30-$40 million to the cost of the $500 million arena in order to pay off the KeyArena debt. Keller making the point that the extra money on the price tag would make it harder to pass the Renton arena through the legislature. Nickels testifies he did not think it would have a negative impact on lobbying,
11:26 a.m. - Keller now making the point that when KeyArena was remodeled in 1994, there was no other stadium in town with luxury facilities. Safeco Field and Qwest Field didn't exist yet. Keller says that those new stadiums added competition to KeyArena.
11:21 a.m. - Keller now presenting into evidence a 2006 report from the Mayor's Task Force on Seattle Center. On page 48, the task force report finds that KeyArena needed work and money to become a viable NBA facility. Nickels concurs that's what the report said.
11:15 a.m. - Nickels admits that KeyArena is not a good long term deal for a team.
11:10 a.m - Keller presenting evidence of a City task force report showing the Sonics had lost $58 million between 2001 and 2006. Nickels says he knows the City's revenue was not good, but didn't know the Sonics had lost t that much. Keller is also presenting evidence of a study showing KeyArena has must less revenue potential than other NBA arenas. Nickels says he agrees that KeyArena is lagging behind other arenas. A chart of the study shows KeyArena ranked second to last in revenue compared to comparable NBA arenas.
11:05 a.m. - Sonics attorney Keller asking Nickels if the City's proposal to the Schultz ownership group to redo the financial aspects of the KeyArena lease as a sign that the City knew the team would lose money. Nickels basically says the reason to redo it was to make sure there would be a long-term tenant in KeyArena. Keller pushes, asking if that meant the mayor knew it was a bad deal for the Sonics, to which Nickels finally responds that it was.
10:45 a.m. - Back in session. Nickels testifies that the KeyArena lease should be upheld because anything can happen in two years.
10:30 a.m.- The court is in recess. Back at 10:45.
10:27 a.m. - City presents into evidence a letter from the owner of the Sport Bar and Grill to the Mayor asking for efforts to keep the Sonics. The defense objects, saying it goes to the Mayor's state of mind and the objection is sustained.
10:20 a.m. - Nickels responds to Bennett's announcement in May 2007 about engaging in buyout talks. A few months later, Bennett expressed he want to meet with Nickels. Nickels said he was interested in talking about the future of KeyArena. Bennett then said publicly that KeyArena was not an option, in which case Nickels responded publicly that Bennett shouldn't spend money on a plane ticket to Seattle for a meeting.
10:17 a.m. - Nickels testifies he was disappointed when he heard in 2006 that the Sonics were not sold to local ownership. He first met Bennett a few days later and said he was excited in talking to Bennett about KeyArena, but that Bennett didn't have "much of a reaction."
10:10 a.m. - The City calls its first witness, Mayor Greg Nickels. He is now testifying about options presented to former Sonics owner Howard Schultz about renovations to KeyArena.
10:05 a.m. - Keller brings up that some of the City's argument such as civic pride and intangibles are not in the current KeyArena lease. He also mentions Initiative 91 was passed by voters which prohibited taxpayer-funded subsidies for pro sports teams. Keller is also claiming some season ticket holders not only don't go to games, they don't even give their tickets away.
10:01 a.m. - Keller says even without the Sonics, Seattle will still be a world class city.
9:53 a.m. - Keller says that the City is trying to hold the Sonics here hoping the financial losses will be so bad that the owners will be forced to sell. He brings up the investor group led by Microsoft CEO Steve Ballmer as potential buyers. Keller uses the words "forced bleeding" as he mentions a powerpoint presentation about the idea involving Ballmer, Matthew Griffin and others. Keller says the "bleed them 'til they sell" plan began months before any litigation.
9:50 a.m. - Keller says KeyArena has one-third the revenue-generating power of other NBA arenas.
9:47 a.m. - Keller bringing up previous findings by both the City and the Sonics that the business model for KeyArena was broken.
9:41 a.m. - Keller says an arena must promote fan experience and have special amenities such as luxury suites. He is going through a checklist now of what an NBA arena must have which KeyArena is missing, such as proper square footage (700,000 square feet), wide concourses and access to concessions.
9:40 a.m. - Judge Pechman tells someone in the courtroom to sit down. Not sure who it was. The camera is trained on the judge and attorneys. Rules in the court are very strict about nobody moving around or leaving the courtroom.
9:37 a.m. - Keller now talking about the failed efforts on the state and local level over recent years to remodel KeyArena again, including a failed effort last year to build a $500 million arena presented by the Sonics. Makes a reference that legislators were telling the Sonics they would have to "play in my sandbox."
9:33 a.m. - Keller brings up the fact that attendance is down and that the Sonics lost $20 million last season.
9:27 a.m. - Keller says it's not the City of Seattle's or the Sonics' fault that KeyArena is no longer economically viable, but that the situation has changed and that the agreement "no longer works" and that both parties "should go their separate ways."
9:24 a.m. - Sonics lawyer Brad Keller begins opening statement. He says part of the original KeyArena lease was that the building was supposed to be an economically viable arena, which he says it is not anymore.
9:20 a.m. - Lawrence making the point that if the Sonics stay, a lot can happen in two years. He points out that the KeyArena lease was negotiated and signed in a two year period, and that the Sonics went from a sub-.500 team to NBA champions between 1977 and 1979, He's making the point that if the Sonics stay through the end of the lease, something could happen to keep them in Seattle.
9:17 a.m. - Lawrence bringing up McClendon's interview where he said the team was bought with the hope to move to Oklahoma City, followed by an e-mail to Bennett expressing the same thing.
9:15 a.m.- Lawrence just brought up the "I am a man posessed" e-mail chain with co-owners Clay Bennett, Aubrey McClendon and Tom Ward. Lawrence reminding the court that Bennett later said he was talking about keeping the team in Seattle. Lawrence says the evidence shows Bennett was posessed to get the team to Oklahoma City.
9:12 a.m. - Lawrence says the PBC is claiming undue hardship as a reason for getting out of the lease, but they went into the agreement knowing the team was losing money.
9:11 a.m. - Lawrence goes on to say that the PBC should know the value of a contract and that the Sonics are an intangible benefit to the community of Seattle.
9:02 a.m. - Paul Lawrence, attorney for the City of Seattle, gives opening statement, highlighting the benefits of the $84 KeyArena renovation in 1994 and the lease that went with it through the end of the 2009-2010 NBA season.
9:00 a.m. - Judge Marsha Pechman calls the trial to order.
8:55 a.m. - To give you an idea of what we are seeing, some members of the media are in the courtoom itself on the 14th floor. Many of us are in an overflow room in Courtroom 18A. We have monitors showing us both the courtroom and the evidence to be presented. There is no video permitted outside the closed circuit feed, so don't expect to see any video testimony.
8:50 a.m. - Save Our Sonics chief Brian Robinson takes a stroll through the Media Overflow Room.
8:36 a.m. - Mayor Greg nickels arrives at the courthouse. He is greeted joyfully outside by Sonics fans.
8:15 a.m. - Sonics majority owner Clay Bennett was just spotted walking through the courtroom
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