Area, more than arena, is selling point

By Bill Shaikin

Nov. 7, 2006 12 AM PT

Times Staff Writer

With a round of applause and a unanimous vote of approval, NBA owners welcomed Clay Bennett into their fraternity last month. The Seattle SuperSonics are in the hands of Bennett, off the market and, in a year or two, possibly off to Oklahoma City.

Henry Samueli, the Orange County technology billionaire who owns the NHL’s Ducks, did not grow up on skates. Samueli loves basketball, plays the sport recreationally and wants an NBA team he can call his own. But he did not bid on the SuperSonics, so another basketball season tipped off last week without an NBA franchise playing in Anaheim, or headed there.

In an era when 30 years counts as a life span for an arena, the Honda Center -- formerly the Arrowhead Pond -- opened in 1993. Samueli faces the choice of buying an NBA team, at a cost that could reach $500 million, or persuading an owner in search of a new home that his best option is a used arena.

“If they want a brand-new arena, we will lose in the competition,” said Michael Schulman, chairman of Anaheim Arena Management, the company formed by Samueli to operate the building.

“But if they’re basing it on economics and demographics, I think ours will be better than any other prospective city that doesn’t have a team now. This is a very strong community. It’s a very large community. The other cities don’t compare.”

The NBA has no current plans for expansion, and any move must be approved by league owners. Anaheim is not alone in wanting a team, and the list of potential targets is short.

The Philadelphia 76ers are for sale, but the league has no interest in abandoning the fourth-largest market in the country. The Milwaukee Bucks have been on and off the market for years and their owner, Sen. Herb Kohl (D-Wis.), demands that any buyer keep the team in town.

The Portland Trail Blazers have been on and off the market this year, but their arena agreement ties them to the city through 2025. The Sacramento Kings are not for sale, but owners Joe and Gavin Maloof could consider moving the team if voters there reject ballot measures today to fund a new arena.

The Orlando Magic appears close to an agreement for a new arena, but without one the team could be sold or moved. So could the New Orleans Hornets, depending upon their economic success when they return from Oklahoma City next year.

“When you get a team that wants to move and can move, we want to be in the game,” Schulman said. “If it’s for sale, we’ll consider buying it as well.”

That prompts the question of why Samueli did not bid on the SuperSonics. In July, reportedly after considering bids from potential buyers interested in moving the team to Kansas City, Mo., and San Jose, the SuperSonics accepted $350 million from a group of Oklahoma investors led by Bennett.

If the SuperSonics cannot secure a new arena in Seattle within a year, Bennett said then, the group plans to move the team to Oklahoma City. The SuperSonics’ lease expires in 2010.

“We looked at it,” Schulman said, “and we weren’t interested in running a team in Seattle and moving it three or four years later. I don’t know how somebody is going to make that work. It’s not fair to the Seattle fans.”

If the SuperSonics’ owner “is ready to move, even though he’s from Oklahoma, I think he would be remiss not to see our studies. I think Anaheim is a far better basketball town than Oklahoma City.”

In Oklahoma City, the arena is 4 years old and does not have an NHL team. In Anaheim, the 13-year old arena has the Ducks as primary residents.

Since Samueli took control of the arena three years ago, the company has spent millions on repainting the building and renovating luxury suites, office space, a restaurant and a media workroom, Schulman said.

And, more significantly, the company spent $75 million last year to buy the Ducks from Walt Disney Co. The Ducks’ lease enabled Disney to control revenue from advertising, naming rights, luxury suites and club seats.

After checking out the Anaheim facility in 2001, the Vancouver Grizzlies moved to Memphis, Tenn., where they got a new arena and the power to run it.

“We weren’t interested in just being a tenant unless the tenant deal was so spectacular that you’d be crazy not to say yes. That wasn’t the circumstance in Anaheim,” said Andy Dolich, the Grizzlies’ president of business operations. “I think it’s a much stronger circumstance because of the current structure.”

Samueli runs the arena and runs the Ducks, so he can cut whatever deal he wants with an NBA owner. That one-stop negotiation wasn’t an option for the Grizzlies or the Charlotte Hornets, who spurned Anaheim for New Orleans in 2002.

But Samueli is not alone in his pursuit.

Samueli, co-founder of Broadcom, is worth $1.8 billion, according to Forbes. But Oracle co-founder Larry Ellison, who is worth $17 billion and builds basketball courts on his yachts, wants an NBA team for San Jose. AEG, the company that built Staples Center and the Home Depot Center, wants an NBA or NHL team for its new arena in Kansas City, scheduled to open next year.

Seattle, New Orleans and Oklahoma City are playing musical chairs for two NBA teams, so the city left without a team could bid on another one. Samueli bought the Ducks at a deep discount, during the NHL lockout, and he bought the Honda Center management contract out of bankruptcy. With the SuperSonics sold for $350 million and the Sixers reportedly priced at $450 million, would Samueli spend that much to buy an NBA team?

“We haven’t gotten there yet,” Schulman said.

If an NBA team moved to Anaheim, whether its owner moved with it or sold to Samueli, the league could assess a relocation fee.

The Lakers and Clippers could not stop another team from moving to Anaheim, but they would join the other 27 teams in divvying up the relocation fee. The NBA assessed the Hornets $30 million to move from Charlotte, N.C., to New Orleans, and that tax could rise significantly with a move into a major market already occupied by two teams.

At the urging of Honda Center executives, Anaheim officials have identified three city-owned sites for an NBA team practice facility. The city could spend about $10 million on construction, perhaps recouping that investment by including sports-related shops and businesses in the project.

“Part of our challenge,” said Anaheim Mayor Curt Pringle, “is to make sure money comes out of the deal in some fashion.”

The city does not plan to spend additional money to lure an NBA team. Although the city of Anaheim owns the Honda Center, Pringle says the responsibility of attracting a team rests with Samueli and his arena management company.

“We supported bringing in a private operator there,” Pringle said. “They can do a better job addressing that than we can.”

[email protected]