Paycom Center (formerly Chesapeake Arena)

[betts]

The difference between the Hornets and Thunder is that with the Hornets they weren't the city's team, and when the lease was negotiated, we weren't worrying about the long-term financial success of the team. The Thunder are our team, and we have a vested interest in their financial health. That was the mistake Seattle made. The city wasn't interested in whether the team was financially successful and the owners were happy. They negotiated a lease favorable to the city, and in the end, it was the city who lost. They lost their naming rights sponsor, have only a few events a year and reportedly the district around the arena is now struggling. They have two other professional teams and a lot of other attractions you find in a bigger city, as well as surroundings far more conducive to outside activities so perhaps it isn't as big of a deal there. Were the Thunder to leave OKC it would now leave a much bigger hole. Time to accept the fact that most fans don't have a problem with the lease. Even some non-fans can see what the team has brought to the city, and aren't complaining. Sometimes the sum of the intangibles appears far greater than those we can measure.

[Larry OKC]

The difference between the Hornets and Thunder is that with the Hornets they weren't the city's team, ...

Except you forget that they were the Oklahoma City/New Orleans Hornets (at least for the home games). On the jerseys and everything. But maybe you mean we didn't have an ownership stake in the team (even though we had a profit sharing agreement). Guess what? We don't have an ownership interest in this team either. So much for it being "the city's team". Ask Seattle. It wasn't their team either.

...and when the lease was negotiated, we weren't worrying about the long-term financial success of the team.

Again you forget that the financial success of the Hornets was also guaranteed in that lease by the City. The Hornets were given a $40M guarantee that the City & Bennett would pay up to $10M against. After the $40M was reached, there was a profit sharing clause that resulted in the $1M profit (above and beyond the expenses incurred by the City in the relocation, office space, practice facility, housing assistance etc etc etc).

The Thunder are our team, and we have a vested interest in their financial health. That was the mistake Seattle made. The city wasn't interested in whether the team was financially successful and the owners were happy. They negotiated a lease favorable to the city, and in the end, it was the city who lost.

Wow. Where is our vested interest? Yes we paid for the arena and the improvements, but where is the profit sharing? It isn't there. The ownership group went on record that they would be pleased to just break even. Their definition of being financially successful. All of that changed when it came to making the lease deal with OKC. Now the break even philosophy was adopted by the City and abandoned by the Team. Again, Bennett switched sides. Those are the facts.

The Seattle lease as negotiated was in both parties interest. It was the NBA that changed their business model. There were at least 3 renovation plans but forth by Seattle that would have involved various degrees of financial contributions from the owners. The previous owners said "No". That same offer was extended to Bennett et al. The said no to that as well. It was a new arena or nothing. Before the trial Bennett denied agreeing to contribute anything towards a new arena (have have the articles somewhere if you are interested). IIRC, it wasn't until during the trial that he mentioned they would be willing to contribute something.

Time to accept the fact that most fans don't have a problem with the lease.

Most don't have a problem with it because they don't realize what is in it. Ignorance is bliss.

[betts]

I think we will have to agree to disagree. I'm happy with the lease, happy to pay for renovations to the Ford Center, happy to pay a seat tax, deleriously happy we have a team and think our team adds immeasurably to my family and friends quality of life. I love hearing about our team on Sports Center, reading about them in newspapers around the country, am very proud that when I tell people I'm from Oklahoma City, the first thing many of them say is, "Oh, home of Kevin Durant" or "I love the Thunder." This week in Colorado we had a group of 30 from around the country cheering as they defeated the Heat. Again, I'm not able to put a price on that.

[Easy180]

Larry you still stewing over this three years later? Let it go...Does a body good

I agree with Betts...Can't put a price on the pure joy the Thunder brings to a million or more folks around the metro and state

[betts]

In addition, if anyone thinks the Thunder owners are breaking even on the team yet, they are fooling themselves. It cost the owners $30 million to move the team, $45 million to break the lease and imagine the debt service on the $350 million purchase price.

The Seattle lease was horrific. The city gave the team no revenue from the arena. Howard Schultz started his ownership happy and excited about the team. Embittered by his dealings with the city of Seattle and state of Washington, his tenure was short. Did you notice no one in Seattle wanted to buy the team when he put it on the market, despite the presence of many more billionaires in the region? No one from Seattle has tried to buy the Kings or Hornets.

[Kerry]

In addition, if anyone thinks the Thunder owners are breaking even on the team yet, they are fooling themselves. It cost the owners $30 million to move the team, $45 million to break the lease and imagine the debt service on the $350 million purchase price.

The Seattle lease was horrific. The city gave the team no revenue from the arena. Howard Schultz started his ownership happy and excited about the team. Embittered by his dealings with the city of Seattle and state of Washington, his tenure was short. Did you notice no one in Seattle wanted to buy the team when he put it on the market, despite the presence of many more billionaires in the region? No one from Seattle has tried to buy the Kings or Hornets.

One thing you left out Betts is that they also have a $329 million asset. They aren't as far in the hole as you may think. Billionaires in the Seattle area did express interest in the team but they had the same problem Bennett and Schultz had - no place to play that could generate enough cash flow. If I remember correctly Steve Ballmer (CEO of Microsoft) considered buying the team as part of the Schultz lawsuit but even he realized owning an NBA team in Seattle was a serious money losing venture and backed out. Also, there is no debt service on the $350 million purchase price. NBA owners are not allowed to borrow money to purchase the team (although some do get loans directly from the NBA to keep teams afloat, but these are probably zero interest loans). Their investment has to come from personal wealth. That way some bank doesn't end up owning NBA teams if the owner defaults.

[dcsooner]

Betts,
As is your norm, well stated. I am one of those fans that DOES NOT have any problem with the lease agreement, the food and beverage agreement, the arena upgrades, the practice facility, and everything else that allows these owners to remain profitable and by extension this team to remain in OKC. If the Thunder left OKC it would leave a big hole now, I don't even want to imagine after 15-20 years or more. And although I do not currently live in OKC so I am not directly taxed, I have bought season tickets and merchandise every year they have been in OKC and hopefully I will be able to continue to do so. I LOVE this team and nothing the Larry's of the world can say will change that

[megax11]

In addition, if anyone thinks the Thunder owners are breaking even on the team yet, they are fooling themselves. It cost the owners $30 million to move the team, $45 million to break the lease and imagine the debt service on the $350 million purchase price.

The Seattle lease was horrific. The city gave the team no revenue from the arena. Howard Schultz started his ownership happy and excited about the team. Embittered by his dealings with the city of Seattle and state of Washington, his tenure was short. Did you notice no one in Seattle wanted to buy the team when he put it on the market, despite the presence of many more billionaires in the region? No one from Seattle has tried to buy the Kings or Hornets.

So Bennet was lying then, when he said if the team were forced to stay in Seattle, they would be losing money, rather than moving that year and making a 19 million dollar profit, for the 2008-2009 year, then?

I would think Bennet has no reason to lie about how much profit would be made in its first year, to people he doesn't even have to give that info to.

[betts]

If you borrow $350,000 to buy a business, spend $75,000 on repairs of your building and you make $20,000 profit the first 2 years you are in business, are you breaking even? It depends on your debt and the interest you're paying on your loan. Looking at Forbes data, I don't think Bennett's "profit" includes debt repayment and certainly doesn't factor in moving expenses and lease buyout. Regardless, you're not getting rich. Now the value of your business might be $425,000, but that money is only yours if you sell your business for $825,000. If you sell it for $425,000 you're left with your $20,000 profit, minus taxes. Maybe thats a bit of perspective, in dollars we can understand.

[MikeOKC]

It's been great for everyone involved. No question about that. It's just ironic that it can happen in this conservative city. Because make no question, it's been accomplished through taxes and municipal socialism. There really can't even be serious disagreement with that. Facts are facts. This is a publicly financed enterprise in so many different ways. But it's a great thing for our city - no question.

[Rover]

It's been great for everyone involved. No question about that. It's just ironic that it can happen in this conservative city. Because make no question, it's been accomplished through taxes and municipal socialism. There really can't even be serious disagreement with that. Facts are facts. This is a publicly financed enterprise in so many different ways. But it's a great thing for our city - no question.

Municipal SOCIALISM. Seriously dude? Must be a tea partier. Like firefighting is a socialist activity. Why should we all pay...I haven't had a fire.

[mcca7596]

Yet we can't come around to all paying for others' health care... I haven't had a serious accident.

Firefighting and Police service should be privatized if you believe that health care should be.

Just my rant... back to topic.

[MikeOKC]

Municipal SOCIALISM. Seriously dude? Must be a tea partier. Like firefighting is a socialist activity. Why should we all pay...I haven't had a fire.

Excuse me. Firefighting and law enforcement is a municipal responsibility. Subsidizing professional BASKETBALL is not.

[rcjunkie]

Excuse me. Firefighting and law enforcement is a municipal responsibility. Subsidizing professional BASKETBALL is not.

But building a greater, more financially rewarding tax base is, and that's exactly what having the Thunder has, and will continue to do.

[MikeOKC]

But building a greater, more financially rewarding tax base is, and that's exactly what having the Thunder has, and will continue to do.

Again....I support it! It's a great thing for the city. But, let's be honest about what it is. Taxpayer-subsidized private enterprise is usually called 'socialism' on this board. Just because this at the local level - it's all of the sudden "building a greater, more financially rewarding tax base" (which could come out of the mouth of Barack Obama or Bernie Sanders if it was a national program). Propping up private business with taxpayer funds is hardly a 'conservative' position. That's all I'm saying, but I think it's a good investment. Sometimes, spending at the national level can be just as rewarding. Notice I said sometimes. It's just ironic - that's all!

[Rover]

I love how conservatives always see that the government supporting things they believe in as being responsible, but supporting things they don't understand as being commie. What myopia!

[MikeOKC]

I love how conservatives always see that the government supporting things they believe in as being responsible, but supporting things they don't understand as being commie. What myopia!

I'm not sure you see that I agree with you.

[ABryant]

In fact, if you go way back, it was quite common in ancient cities to have state(city) sponsored games and not have a city sponsored fire department.

Not taking sides. I just don't agree when people claim one thing is a municipal responsibility and another is not. There is historical precedence for both arguments.

If you are interested to learn more, I recommend reading: http://goo.gl/jXFUx

The best ancient representation of how private industry is not always good at running fire departments is Marcus Licinius Crassus

http://en.wikipedia.org/wiki/Marcus_Licinius_Crassus

He made most of his wealth with his private fire department buying property as it was burning, and then after the deal refurbishing and "flipping" houses. He made enough to vie for the position of emperor (he did fail).

[Larry OKC]

In addition, if anyone thinks the Thunder owners are breaking even on the team yet, they are fooling themselves. It cost the owners $30 million to move the team, $45 million to break the lease and imagine the debt service on the $350 million purchase price. ...

Won't go into what Kerry has already expressed other than to say, that is indeed the case. We have had this talk before, and as I pointed out the cost of buying the team etc, was an investment by the ownership group. No, they haven't made back the $350 million yet and they aren't going to...until they sell the team. EVERY previous owner of the Sonics turned a profit. EVERY one of them. Even Shultz with his multi-million/year losses made back every penny and a nice profit when he sold the team. Now it might take Bennett et al a little longer to make back their purchase price (since they reportedly paid $100M more than what the team was worth), but history is definitely on their side.

As pointed out previously, they have easily surpassed their "conservative" estimates by their own consultants with the move. The estimates were around $10M profit. Did the math on it at one time, but they made a $30M/year difference between what they were losing in Seattle and what they are making here.

I know you are perfectly happy with the way everything turned out. You even stated at one point, you would give Bennett everything he asked for just so you could have something else to do 41 nights a year. You have no problem giving your tax money over to support it, and I respect that. By all means, sign over every paycheck directly to Bennett if you want to. Am sure he would be happy to cash it.

[Larry OKC]

I love how conservatives always see that the government supporting things they believe in as being responsible, but supporting things they don't understand as being commie. What myopia!

It all goes back to what you think is the role of government?

[betts]

Won't go into what Kerry has already expressed other than to say, that is indeed the case. We have had this talk before, and as I pointed out the cost of buying the team etc, was an investment by the ownership group. No, they haven't made back the $350 million yet and they aren't going to...until they sell the team. EVERY previous owner of the Sonics turned a profit. EVERY one of them. Even Shultz with his multi-million/year losses made back every penny and a nice profit when he sold the team. Now it might take Bennett et al a little longer to make back their purchase price (since they reportedly paid $100M more than what the team was worth), but history is definitely on their side.

As pointed out previously, they have easily surpassed their "conservative" estimates by their own consultants with the move. The estimates were around $10M profit. Did the math on it at one time, but they made a $30M/year difference between what they were losing in Seattle and what they are making here.

I know you are perfectly happy with the way everything turned out. You even stated at one point, you would give Bennett everything he asked for just so you could have something else to do 41 nights a year. You have no problem giving your tax money over to support it, and I respect that. By all means, sign over every paycheck directly to Bennett if you want to. Am sure he would be happy to cash it.

Larry, when Schultz sold his team, everyone who was selling a house was making a killing too. The Blazers were for sale and Allen couldn't find a buyer. The Grizzlies have been for sale for years and no buyer has emerged. Same with the Hornets. Michael Jordan bought the Bobcats for about $100 million less than Bob Johnson paid for them. George Shinn was in so much debt from running the Hornets he had to sell the team back to the league. The Maloofs are in so much debt from owning the Kings they have to move the team, because they need the $100 million loan the city of Anaheim is giving them if they move. As I said at the time the Sonics were sold, there is no guarantee any of the Sonics/Thunder owners will make a profit selling the team. There is no guarantee they will continue to make a "profit", which is again not truly a correct term, because that $30 million you are quoting is the difference between their losses in Seattle and money made after salaries and team operations expenses are paid. Yes, they are happy they are not still losing $20 million a year, which is what happened in the city that gave them absolutely no financial support and took away all arena profits to pay for arena renovations. But, they are still far behind if you add in moving costs, lease buyout and debt on the purchase.

And no, I didn't want to give them whatever they wanted so I could have something to do 41 nights a year, although that is part of it. I could go to Barons games if all I cared about was filling up nights. I wanted the team, as well, because of what I thought they would bring to the city: name recognition, a sense of community pride, a team that would unite people in our community with all different backgrounds and income levels. I hoped, and I think there is some chance that hope is true, that having a team would keep more of our college graduates here, would help with the revitalization of our downtown, would help the merchants in Bricktown, the hotel owners.

[BDP]

Propping up private business with taxpayer funds is hardly a 'conservative' position.

Correct, but it is the MO of the Republican party. Oklahoma is not conservative, it is Republican.

[king183]

Using public subsidies for private enterprise has been the "MO" of both the Republican and Democrat Parties in Oklahoma.

That's because both parties in Oklahoma are neither really conservative or liberal. There's an Oklahoma-centric strain of populism that's pervaded our state's politics since statehood, which has helped both parties (and the people) support such subsidies.

[BDP]

That's because both parties in Oklahoma are neither really conservative or liberal.

Can't argue with that.

[Rover]

Using public subsidies for private enterprise has been the "MO" of both the Republican and Democrat Parties in Oklahoma.

That's because both parties in Oklahoma are neither really conservative or liberal. There's an Oklahoma-centric strain of populism that's pervaded our state's politics since statehood, which has helped both parties (and the people) support such subsidies.

Using incentives and public infrastructure development and state promotion is good governance and can be done correctly or abusively by both parties.

To ignore the absolute rightist extreme conservative leanings of the Republican party here is having one's head in the sand. Oklahoma is one of the most right leaning states in the country and IS the most Republican.