Sonics argue team has little economic impact on Seattle

A sports economist hired by Sonics owners testified Thursday that the departure of the team would have "no detectable economic impact" on the greater Seattle area.

Brad Humphreys, economics professor at the University of Alberta, even suggested Oklahoma City might be financially worse off if the Sonics move there.

His testimony — which was disputed by Seattle's lawyers and experts — came during the fourth day of a six-day federal trial over whether the Sonics can abandon KeyArena before their lease expires in September 2010.

In a bizarre role reversal, the Sonics are arguing precisely the opposite of what professional sports teams usually want the public to believe — that they significantly boost the local economy.

In Oklahoma, for example, the team commissioned a study that showed the Sonics' arrival would contribute more than $170 million a year to the state economy. The study was used to persuade Oklahoma lawmakers to approve $60 million in payroll-tax rebates for the team.

In Seattle, though, Sonics owner Clay Bennett is trying to convince U.S. District Judge Marsha Pechman that the team makes zero difference to the Seattle economy. If successful, that could reduce the amount of damages the team would have to pay to break its KeyArena lease.

A city expert, economist Lon Hatamiya, offered his analysis Thursday that the Sonics contribute $188 million a year to the local economy through payroll, ticket sales and other consumer spending.

If the Sonics leave, that spending "may go away," Hatamiya said. "There is no certainty that money will continue to be spent here... Much of that impact would shift to Oklahoma City."

But Humphreys, the Sonics' expert, countered that such economic-impact studies grossly exaggerate the benefits of sports teams and do not pass muster for peer-reviewed economics journals.

Humphreys said he has studied the relocation of every major professional sports team over the past 40 years, and discovered no discernible harm to the local economy of the cities that lost teams.

"When a team leaves, they don't take that consumer spending with them ... it simply gets spent on other entertainment activities," he said.

Seattle's lead attorney, Paul Lawrence, aggressively questioned the relevance of Humphreys' conclusions to the KeyArena lawsuit.

He noted that Humphreys' calculations were based on looking at all of King, Pierce and Snohomish counties. The city of Seattle itself, Lawrence suggested, might very well lose money if Sonics fans from Bellevue, for example, spent money in that city instead of driving across the lake to see a Sonics game.

"And so whatever testimony you have given here today does not tell us what the net economic impact on the city of Seattle is from the departure of the Sonics, correct?" Lawrence said.

"Yes," Humphreys acknowledged.

Lawrence also pointed to published research by Humphreys that claimed that sports teams might actually harm local economies.

Humphreys agreed it is possible that Seattle is hurt by the presence of the Sonics, Mariners and Seahawks, because spending on sports teams tends to "leak" dollars out of the local economy when compared with other businesses.

"In your view, Oklahoma City might be worse off for having the Sonics move there?" Lawrence asked.

"Yes," said Humphreys.

The Sonics on Thursday also called Mitchell Ziets, a consultant who explained how he arrived at the team's estimate it would lose more than $60 million over the next two years if forced to finish out the KeyArena lease.

Ziets, president and CEO of MZ Sports, said his estimate was based on similar experiences of two other professional sports teams with similar "lame-duck" periods in which fans and advertisers knew the team was leaving town.

One was the NFL's Houston Oilers, after the team in 1995 signed an agreement to move to Tennessee. The team did not move until after the 1996 season. The other was the NBA's Charlotte Hornets, which moved to New Orleans in 2002, two years after it was first announced the team would leave.

Ticket sales, advertising and other revenue plummeted in both Houston and Charlotte during their teams' "lame-duck" periods, Ziets said.

Based on those cities' experiences, Ziets predicted Sonics ticket sales would drop at least 40 percent during the next two years when compared with the 2006-07 season. KeyArena advertising sponsorships would drop by 30 percent, he said, and suite sales by half.

Seattle attorney Jeffrey Johnson cast some doubt on Ziets' projections.

In 2006, Johnson noted, Ziets had written up a report for Bennett so he could get NBA approval to buy the Sonics.

That report predicted the Sonics would turn a $1.5 million profit the next two years at KeyArena, though it assumed the team would stay in the Seattle area, well on the way to getting a new arena.

"A team can make money" at KeyArena, Ziets conceded. "Everything has to go right."

Thursday afternoon, the Sonics brought in a polling expert to discuss her findings that most people in Seattle won't care if the Sonics leave.

Deborah Jay, president and CEO of Field Research — whose Ph.D. led Sonics attorney Jim Webb to her as "Dr. J" — testified about a January poll of more than 400 Seattle-area adults. The poll found that 58 percent of those surveyed said the team's departure would make "no difference" to them, and 7 percent said they'd be "better off." Only 31 percent said they'd be "worse off." (The remainder had no opinion.) The Sonics paid $100,000 for the poll.

The trial resumes today, with the Sonics expected to call to the witness stand former team President Wally Walker, Seattle developer Matt Griffin and Seattle City Councilmember Nick Licata.

There will be a break in the trial next week, and it is scheduled to wrap up Thursday.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com