Share “Seattle's 'poison' NBA plan”

By Chris Casteel Published: June 21, 2008
SEATTLE — A group of prominent local businessmen, including an attorney representing this city, discussed a "poisoned well” plan aimed partly at forcing the Oklahoma City-based owners of the SuperSonics to sell the NBA team rather than move it to their hometown.

Testimony in federal court here Friday also revealed that Wally Walker, a former star player and executive for the team, was given the duty of driving a "wedge” between the NBA and the Sonics' owners before a critical vote by NBA owners on whether the team could relocate to Oklahoma City.

Attorneys for the owners kept Walker and local real estate developer Matt Griffin on the witness stand for hours as part of their strategy to show Seattle had "unclean hands” when it filed suit against the owners to force the Sonics to play out the last two years of the team's lease at a city-controlled arena. The attorneys sought to show the city was involved in a plan to keep the Sonics here for two years to "bleed” the owners and put the lead owner, Oklahoma City investor Clay Bennett, "in a box.”

The link made by the attorneys to the city was former U.S. Sen. Slade Gorton, who was hired by the city last fall after the Sonics sought arbitration to get out of the lease.

At a news conference after Friday's testimony, Paul Lawrence, an attorney for the city, told reporters that the city didn't have unclean hands and had never been involved in the plans discussed in court. Lawrence said the city had made clear right after Bennett bought the team in 2006 that it wanted the lease, which runs through the 2009-2010 season, honored. Lawrence said the city didn't file suit until after Bennett's group took action to get out the lease.

The trial over whether the Sonics must stay here for another two years is set to resume on Thursday, for one day, for more testimony and closing arguments. U.S. District Judge Marsha Pechman is not expected to rule that day.

The ‘poisoned well' plan
Gorton was present at a meeting at Walker's house last October when Mike McGavick, a former executive at the Safeco Insurance Co., presented a plan called "The Sonics Challenge: Why a Poisoned Well Affords a Unique Opportunity.”

Also present at the meeting was Microsoft Corp. executive Steve Ballmer, who had been asked to consider heading up a local ownership group to buy the team and keep it in Seattle.

Parts of the plan shown in court said:

•"For the best likely outcome, two things have to happen next: Oklahomans have to be willing to sell and the public folks have to do the right thing.”

•"The critical path is to separate the NBA from the Oklahomans, while increasing the exposure of both.”

•"The city (of Seattle) has taken the first of several steps and is about to take the second. First, they hired Slade Gorton and used the misstep of an out-of-state arbitration filing to file suit, increasing the prospect of locking (the owners) into losses in Seattle; This also exposes the league to embarrassment in a market they like.”

•"So it is a pincer movement — increasing the Oklahomans' costs in an unpleasant environment while increasing the league's belief that an alternative solution gives it a good new owner and keeps it in a desirable market.”

Owners' attorneys showed other e-mails from Griffin to Ballmer and from Gorton to Griffin and others talking about the option of bleeding Bennett as a way of forcing him to sell.

In an e-mail from Gorton to Griffin and others, the former senator wrote: "Bennett will sell at a reasonable price only if pressured by the NBA or if he faces an expensive and unpleasant legal future.”

In that same e-mail, sent last December, Gorton said, "Bennett owns the team, wants it in Oklahoma City and sees relatively clear sailing to the NBA approval except for our lawsuit, which at best can delay his move and make it more costly.”

Brad Keller, an attorney for the owners, questioned Griffin, a civic leader here, about the e-mail:

"You didn't have a lawsuit pending did you?”

"No,” Griffin said.

Keller asked, "So when he said ‘our lawsuit' you knew he was referring to the city's lawsuit, right?”

"Yes,” Griffin said.

Griffin said he had discussed the "poisoned well” plan when he met with Ballmer about representing the Microsoft chief to look at options regarding the Sonics, including buying them from Bennett.

Keller asked about the line in the "poisoned well” plan about locking in losses for the Oklahoma City owners.

City of Seattle's 'poisoned well' documents

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Friday in the SuperSonics trial:

•Attorneys for the Oklahoma City-based owners sought to prove a key point in their legal strategy: That Seattle had "unclean hands” when it filed a lawsuit to force the Sonics to play out the last two years of the lease at outdated KeyArena. The attorneys' contention: That the city refused to take a buy-out of the lease because it wants to bleed the owners and force them to sell the team to a local group, possibly one headed by Microsoft Corp. chief Steve Ballmer. "Unclean hands” is a defense that can be used in a contract dispute.

•Former Sonics star player and front office executive Wally Walker testified that he hosted a meeting at his house in October to discuss a "poisoned well” plan that said: "For the best likely outcome, two things have to happen next: Oklahomans have to be willing to sell and the public folks have to do the right thing.”

•Real estate developer and civic leader Pat Griffin testified that he wrote an e-mail to Ballmer saying, "Bennett needs to sell at a reasonable price; Litigation to stay and forced bleeding of about $20 (million) per year will help.”

•Seattle City Councilman Nick Licata testified that he advised state legislators in 2006 against supporting a plan committing city funds to a renovation of KeyArena. Licata also testified that he doesn't think professional sports teams have the economic value to cities that some argue.


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