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June 19, 2008 2:41 PM

Sonics' witness details expected financial losses

Posted by Percy Allen

MZ Sports President and CEO Mitchell Ziets said the Sonics will suffer considerable financial losses in the next two years if the team is not allowed to break its lease. MZ Sports is a financial advice firm, catering to the sports industry.

Ziets, testifying for the Sonics, says he draws that conclusion from comparing teams in similar situations. He found nine teams that were one-year lame ducks. Those teams are: Los Angeles Rams, LA Raiders, Cleveland Browns, Montreal Expos, Minnesota North Stars, Quebec Nordiques, Winnipeg Jets, Hartford Whalers and Vancouver Grizzlies.

Ziets said the NBA's Charlotte Hornets and NFL's Houston Oilers were two-year lame ducks like the Sonics. In fall 1995, the Oilers signed an agreement to relocate to Nashville. The team moved after the 1996 season and moved to Tennessee in '97.

Ziets said during the two-year lame duck period, the Oilers' ticket revenue declined 40 percent. He estimated the team had a 1994 ticket revenue of $18.1 million. He said in a normal situation (i.e. if the team hadn't announced it was moving) the Oilers should have $20 million in ticket revenue in 1996. The actual 1996 ticket revenue was $11.8 million, a 40 percent decline.

Ziets said the Charlotte Hornets began relocating to New Orleans in 2000. The team moved following the 2001-02 season. Zietz said during the Hornets' lame duck seasons, the team averaged 11,990 fans in 2000-01 and 9,546 in 2001-02. The attendance declined 42 percent.

In his calculations, Ziets said the Sonics are expected to suffer a 40-48 percent decline in tickets. He said concessions follow tickets. He predicted a 30 percent decline in sponsorship revenue and a 50 percent decline in suite revenue. That's a $14 million to $16 million decline in those categories, Ziets said.

Ziets projected the total losses during the lame-duck years between $60.9 million to $64.9 million.

Sonics attorney Paul Taylor closed his questioning and Seattle attorney Jeffrey Johnson began cross-examination.


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2007 "Poisoned Well" document (PDF)
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Trial coverage from www.newok.com
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