The idea of moving the Sonics to Oklahoma is idiotic
 

http://sports.espn.go.com/nba/news/story?id=3091416

Have these people ever been to Oklahoma?

I say let them move, and let them also reap the whirlwind. Literally.

It's not exactly a shot in the dark. Oklahoma has hosted a basketball team for the past two years and done just fine.

If Salt Lake City (<200,000 people) can host a basketball team, surely Oklahoma city (>500,000 people) can.

They would be going from the 15th biggest market to the 45th biggest. It's fraught with risk.

If they move to OKC, there is likely a stipulation that they get very preferential rent.....or, in the alternative, the arena is privately owned. Either way, there are likely to be luxury suits, something currently missing in Key Arena.

The luxury suite revenue has been the main issue all along with this team. They operated at Key with an unfavorable lease and no luxury revenue, yet only lost 17MM. Imagine if they had luxury suite revenue rolling in as well as a cheaper lease payment.

Staying in Seattle is fraught with financial risk, not moving to OKC.

if you have a two year view.

I think the luxury suites will be there for more than 2 years, so the revenue should continue to come in for that.

My personal view is that whether the Sonics are in Seattle or OKC, nobody will care about that team on a nationa level.

In owning a team, you really only need about a 5-year view because of the tax advantages. The tax code is set up so that you can actually write off the team purchase as depreciation over a few years (thanks, Bill Veeck) so the goal is to buy, get a new arena or big name player or something catchy (writing off the initial purchase price along the way), and then sell the team at a higher price. Along the way, you're paying yourself, paying family working for you, lowering your taxes and maybe enjoying games and schmoozing.

While we may love to hate the Boss up in New York or Stern hates Cuban, these guys look like they own a team because they love the sport and want to see a winner, not just to make a buck.


(TD!!! Hall to Collie!!!! 21-3 Cougs!)

How do you depreciate a sports team? Are you talking about amortizing the associated goodwill? What is the useful life of a sports team?

You can deduct certain aspects of transactions costs associated with the deal (while capitlizing others). Is this what you mean? transaction cost recovery?

what about TV? I imagine that the Seattle local TV deal would be worth more than the Oklahoma TV deal?

The NBA already engages in revenue sharing associated with television broadcasting to help offset the large market/big market issue. If anything, Seattle is GETTING revenue sharing bucks from the league, not paying in. OKC would be the same.