Oklahoma City officials today announced an agreement with the Seattle SuperSonics on a letter of intent to enter into a lease for the use of the Ford Center. The lease, which is expected to be finalized before the NBA Board of Governors vote on the Sonics relocation application next month, will have an initial term of 15 years and will begin no sooner than the 2008-09 season and no later than the 2010-11 season.
The letter of intent is here. A couple of key points…..
* At the end of the initial 15-year lease, the team will have the option to extend the lease for five additional three-year periods.
* The team must pay the city $28,000 in game day expenses and additional rent of $12,000 per game
* The team will have priority to the Ford Center’s schedule for all preseason, regular season and postseason NBA games as well as priority for up to 10 non-game day events.
* The team will receive 40% of the first $2.5 million in concessions; 42.5% of next $2.5 million and 45% of the balance. The team will receive 25% of first $1.25 million in suite revenue; 27.5% of next $500,000 and 30% of the balance. The team will receive 10% of clubs and restaurants revenue and 15% of bar revenue.
* The team will have the right to negotiate a new naming rights deal, but the team must pay the city the $409,000 annually that it currently receives under existing deal with the Oklahoma Ford Dealers.
* The team must pay the city $100,000 per year for use of the practice facility. The city must pay for all capital repairs and replacements at the practice facility.
* The team can opt out of the arena lease, the food and beverage agreement and the practice facility lease at the end of six years and at one or more other undetermined point in time during the initial 15-year lease if the average of team ticket revenue for the preceding two years fall below 85% of a benchmark of average ticket revenues in the first two full seasons following completion of arena renovations.
We will have much more coverage on NewsOK.com and in Saturday’s editions of The Oklahoman.