Sonics Find Home in Renton
The NBA business model is to blame for teams leaving their homes.
Feb 14, 2007
NBA teams are finding it a challenge to stay in one spot these days. First, the Vancouver Grizzlies moved to Memphis in 2001; next, the Charlotte Hornets became the New Orleans Hornets in 2002; and now, the Seattle SuperSonics is thought to be the next team to relocate to a new city.
After being sold to the Oklahoma-based owner, Clay Bennett, many Sonics fans lost hope that their team of forty years would remain in their hometown. In July 2006, Bennett gave the ultimatum that if a deal could not get done within a year to build a new playing facility for the team, he would relocate the franchise. Yesterday, the SuperSonics chose the Seattle suburb of Renton as the site for a proposed $500 million multipurpose arena.
This seems to be a major hurdle crossed by the Sonics, but why are so many teams having so many problems making enough money to remain in their host city? The answer is that the NBA business model is out of control. The market has finally reached the point where fans aren’t willing to pay the cost of players’ increased salaries.
NBA Commissioner, David Stern, called the Sonics’ lease for KeyArena “the worst lease agreement in the NBA.” Yet, when the agreement was signed, no one could have anticipated the ludicrous spike in NBA salaries. As a result, playing facilities must generate money and not simply rely on ticket sales as they once could.
The days where general managers traded players to improve the team's performance. Now, teams trade salaries to give their organization more business flexibility. Trades that make the most sense are the ones that make the most cents. Low-costing draft picks and expiring contracts often hold more trade value than star players. Some players, like Kevin Garnett, are barely even tradable because of their over-inflated contracts.
The NBA market is changing and unless team owners and the players’ union can reshape their business model, the league will face some serious issues regarding how business is done.
