Leverage is a dynamic tool in business, that critical element in negotiations where one side assumes it has the most to lose by refusing to consent.
The tactic has made Clay Bennett rich and powerful. It also is why Las Vegas today should be more suspicious of his intentions than a store clerk of any customer wearing a ski mask.
Bennett is nobody’s fool. You don’t become chairman of a private investment firm and later head a group to purchase the NBA and WNBA franchises in Seattle for $350 million without being familiar with the strategies of boardroom combat.
In telling a group of Seattle business and civic leaders this week that Las Vegas would be a more attractive destination for his franchise than his hometown of Oklahoma City, Bennett understood such comments wouldn’t be confined to those walls.
The fact that he backpedaled from such remarks on Friday faster than any defensive back that might be selected in today’s NFL Draft could is of no grand importance. Bennett achieved his primary objective. He fired the proverbial first shot across the relocation bow.
The SuperSonics and Storm have as much chance of remaining in the Pacific Northwest as a startup coffee company does overtaking Starbucks for consumer interest and — assuming Bennett can negotiate himself out of a lease at KeyArena through 2010 — could move following next season.
Where will they settle?
Wherever the guy in charge strikes the sweetest deal.
How to do so?
Play different cities off each other.
Bennett is like any major league sports owner seeking a better situation, meaning his to-do list begins with securing a state-of-the-art facility for which he pays nothing and yet from which he receives all revenue.
The arrangement is nice and immensely lucrative if you can get it, but he isn’t likely to obtain it here.
Pat Christenson has done the research. He has seen the numbers. The president of Las Vegas Events who led a task force in studying the feasibility of building an arena estimates most new venues that house major league teams are funded with 68 percent of some form of tax.
“I’m sure the general public will ultimately determine whether a (new arena) is or isn’t equitable,” Christenson said. “We stopped short of recommending how much funding should be public or private.”
Some will be public. It always is, be it simply for infrastructure or to help construct the building itself.
This was Bennett’s $500 million arena proposal for Renton, Wash., which legislators rejected: The state would put up $300 million and the suburb of Renton another $100 million and Bennett another $100 million. He would receive all generated revenue, including hundreds of millions in naming rights. In short, he’d get his arena and make a ton of money.
The task force here estimated a new arena would cost $404 million — not including the land or parking structure — if built by 2010. Proposals for funding the project went out recently, around the time the NBA announced it was forming a committee to further study bringing a team here.
On that point, forget the gambling issue as it relates to a team making Las Vegas home. David Stern clearly is the best commissioner in sports, but he doesn’t run the NBA. His owners do, and by them insisting the league research this city even further, the main concern they have clearly is when a new facility can be raised.
It obviously has Bennett’s attention.
He is intelligent enough to realize Las Vegas does special events as well as anyone this side of Los Angeles or Manhattan and that the potential upside for revenue streams are far greater in a building here compared with Oklahoma City. Maybe the prospective of such earnings from non-NBA events would convince him to throw in more money up front than he offered in Renton. Maybe only 30 percent to 40 percent of the deal would have to come from taxes.
It’s all negotiable, which returns us to that idea about leverage. You might have thought Oscar Goodman broke out into the Chicken Dance up and down Stewart Avenue upon hearing any NBA owner mention the possibility of relocating to Las Vegas, but the mayor responded with one of the more rational thoughts:
“The whole world knows Las Vegas thirsts for a NBA franchise,” Goodman said in a statement. “But we’re not going to put ourselves in the position where we could be used as a pawn because people know our desire.”
Bennett might have his eyes on Las Vegas today, but I have to wonder: Are they peeking out from behind a ski mask?
Ed Graney’s column is published Wednesday, Thursday, Saturday and Sunday. He can be reached at 383-4618 or firstname.lastname@example.org.ED GRANEYMORE COLUMNS