“We have the money and the wherewithal to get BOTH teams if that’s what Mr. Bonderman decides to do. But we believe we have other friends in the family that very much want to join us in that endeavor.”
That was what Oak View Group CEO Tim Leiweke told Q13’s Bill Wixey in a one-on-one interview when asked specifically about bringing the Sonics back to Seattle. There are several things you can take away from just this one statement.
The first is that it appears David Bonderman may well be the majority owner of both the NHL and NBA teams, if he wants. The choice is his, but he has the means to do it. Bonderman has expressed interest in being a majority owner in the past, bidding on the Golden State Warriors when they went up for sale in 2010.
The second takeaway is that there are other “friends in the family” waiting in the wings to join an ownership group, be it NHL or NBA. It’s left up to speculation who these “friends” or even who the “family” is, but for my money I’d wager the latter is the leagues. In another part of the same interview, Leiweke again used the “friends” term, stating;
“We have friends of mine and friends of David Bonderman that would love to be part of the NBA. By the way, David Bonderman owns a piece of an NBA team. We have an ownership group already and that ownership group is very capable of going out and getting a team.”
What we do know is that OVG is looking for local ownership, and is in negotiations with Ted and Chris Ackerley, sons of late former Sonics owner Barry Ackerley.
“They’ve done a tremendous job of getting their arms around what the requirements are, so that if and when either league looks at the opportunity, they can’t poke holes in it in terms of lacking the complexity and the detail it requires financially,” Ted Ackerley told the Seattle Times’ Geoff Baker.
“You have a world-class developer on the front end putting all the pieces in place,” Chris Ackerley said, adding that teams at KeyArena would have “the ability to pull the levers they need to control to have the asset function for them economically.”
In the same piece, Baker states that “the NBA franchise would be a third-party tenant in a city-owned KeyArena run by OVG.” But Leiweke has some thoughts on that.
In their interview, Wixey asked why an NBA owner would be inclined to drop $2 billion or more to have a secondary tenancy. Leiweke replied:
“I’ll give [an NBA ownership group] a third of our building. I’ll give you a third of it. You’ll be a third owner, the hockey team will be a third owner, we’ll be a third owner and we’ll all own it together. Just like they do in New York or just like they do in Chicago or just like they do in Denver or just like they do in almost every other marketplace in the United States. And then we will make sure that you don’t have to tie that capital up in the building. And then we’ll get additional suite revenue, additional sponsorship revenue, additional naming rights revenue, and additional club suite revenue.”
Wixey asked him if he was saying there was some kind of escalator clause in the contracts he was working on, meaning that sponsors would pay more for an arena with two teams than one with a sole tenant.
“Exactly right. So we’re building all of that into our deals. We’ve already made that understanding and agreement with everyone including the NBA knows what we’re going to do. That’s the way that’s going to work.”
Here's a big question about the proposed arena at Seattle Center: If the NHL moves in first, what would motivate a potential NBA owner to pay a huge fee (around $2 billion) to buy a team, and then move into the arena as a secondary tenant? In an exclusive interview, OVG president Tim Leiweke explains how the NHL and NBA teams would be equal partners in the building, along with OVG.Posted by Bill Wixey on Tuesday, November 7, 2017
A major talking point has been teams having to split revenue with OVG and only getting a percentage of basketball revenue created by the arena. However, Leiweke explains that an NBA ownership group would get one-third of ALL revenue from the arena. They would be an equity partner and would receive money from the building’s naming rights and sponsorships, as well as suite revenue from not just basketball games, but NHL games and concerts, plus any other events held at the arena. Revenue that will be increased with the addition of an NBA team.
It’s possible that the building would be operated by a new LLC that consists of both teams’ ownership groups as well as OVG, similar to how the American Airlines Center is owned by the city of Dallas and operated by Center Operating Company, LLC, a joint venture between the Mavericks and Stars.
Leiweke has also received a vote of confidence from NBA commissioner Adam Silver, who told Geoff Baker that Leiweke has “always delivered in all of my business dealings with him.” Silver also noted that Leiweke has “been involved in the building and operation of more NBA arenas than anybody on the planet” and that he has “no concern that the building proper won’t meet our requirements.”
There’s still a lot to unpack and a lot of work to be done, but by all indications Tim Leiweke is ready to push a new Seattle Center arena over the finish line.