Don't let Sonics go, Gregoire tells NBA

Gov. Christine Gregoire and other state and local political leaders Tuesday urged the NBA to reject or postpone a request by Sonics owners to move the team to Oklahoma City.

In a letter to NBA Commissioner David Stern and all 30 team owners, Gregoire said the recently disclosed e-mails between Clay Bennett and fellow Sonics owners reveal they "were never, in fact, acting in good faith to keep the team here in Seattle."

The letter came a day after former Sonics owner Howard Schultz announced plans to sue Bennett to try to undo the 2006 sale. Schultz's lawyer said Bennett broke his promise — contained in the Sonics-sale contract — to make "good-faith best efforts" for at least one year to land an arena deal that could keep the Sonics in the Seattle area.

The NBA Board of Governors is set to meet Thursday and Friday to vote on Bennett's request to move the Sonics to Oklahoma City as early as next year. NBA spokesman Tim Frank had no comment on the latest developments. Dan Mahoney, a spokesman for Bennett, also declined to comment.

The letter from Washington state politicians touts Seattle as a larger and more lucrative market for the NBA, arguing, "Any move of the team away from Seattle would be a breach of faith with the fans, breach of contract with the previous owners, a violation of the lease with the city and contrary to the league's stated intentions regarding franchise relocation."

In addition to Gregoire, the letter was signed by state House Speaker Frank Chopp, D-Seattle, Senate Majority Leader Lisa Brown, D-Spokane, King County Executive Ron Sims and Seattle City Council President Richard Conlin.

Although the letter touted "united support for NBA basketball in Seattle," Seattle Mayor Greg Nickels refused to sign because it included no pledges to pursue a KeyArena renovation.

In a written statement, Nickels said, "Words are one thing, action is another." The city will return to Olympia next year, he said, "to hold legislative leaders to their promise to keep KeyArena as the region's venue for cultural, entertainment, and civic events — and for NBA basketball."

Lawmakers for four straight years have rejected taxpayer funding for various Sonics arena proposals. Last month, legislators declined to authorize King County to raise local taxes for a $300 million KeyArena expansion, despite an offer by private investors led by Microsoft CEO Steve Ballmer to cover half the cost.

Meanwhile Tuesday, the Oklahoma State Senate approved a tax-incentive package to help lure the Sonics to Oklahoma City. The measure, approved Monday by the state House, would give tax breaks to the Sonics worth an estimated $60 million over 15 years.

Nickels said he expects NBA owners to approve the Oklahoma City relocation. He said the city will continue to pursue its federal lawsuit to hold the team to its KeyArena lease through September 2010. A trial in that case is set for June.

Schultz's threatened lawsuit, which his attorney Richard Yarmuth said will be filed within two weeks, would be based on the contract signed two years ago when Schultz's Seattle-based group sold the Sonics to Bennett's Oklahoma City investors for $350 million.

Other members of Schultz's former ownership group could also join the lawsuit. One other former member of that group — wireless entrepreneur John Stanton — already has expressed interest in buying the team back from Bennett as part of the Ballmer-led investor group. Stanton declined to comment Tuesday.

In the purchase and sale agreement, dated July 14, 2006, Bennett's group promised to "use good-faith best efforts" to negotiate an arena deal in King, Pierce or Snohomish counties as "a successor venue to KeyArena."

Although it can be hard to define terms such as "good faith" and "best efforts," a University of Washington contract-law expert said the recently revealed e-mails among Sonics owners could give Schultz ample ammunition.

"It flies in the face of common sense to say you are going to keep the team in Seattle when you are exchanging e-mails discussing how quickly to move the team to Oklahoma City," said UW Law Professor Steve Calandrillo.

Schultz intends to cite those e-mails to ask a court to "unwind the transaction" that resulted in the Sonics sale, his attorney Yarmuth said this week.

While judges rarely approve the "unwinding" or "rescission" of a business deal, Calandrillo said "there is a ground for rescission if you enter into a contract based on the fraudulent representations of another party." The final say could come down to a judge or jury who would rely on "community standards" to define good faith, he said.

If Schultz follows through with his threat, it would be the third lawsuit facing Sonics owners. In addition to Seattle's lease lawsuit and Schultz's potential claim, the team faces a class-action lawsuit by season-ticket holders who claim they were defrauded because they wouldn't have bought tickets had they known of Bennett's intent to move the team.

U.S. District Judge Richard Jones ruled Monday the ticketholders' lawsuit can proceed with respect to claims about the 2007-08 season, rejecting a request by Sonics' lawyers to put the case on ice until the city's lease lawsuit is resolved. But Jones did put on hold any claims about damages related to future seasons until the city's lease case is finished.

The Associated Press contributed to this report. Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com