Should Arena Deals Include Lockout Clauses?

Right up front: this is a sticky issue. I am, first and foremost, a Sacramento Kings fan. Nothing in sports hurt me like the final night of last season, to think that the Kings were playing their last game in this city we call home. Nothing in sports has made me more happy than the May 2 announcement that the Kings were staying in Sacramento, even for just a year. If the Kings do leave, it was devastate me. I want nothing more than the Kings to stay.

But as I consider the circumstances of this lockout, the plight of cities whose residents and businesses have paid for NBA arenas and the future of basketball ... something just isn't right.

When public entities enter agreements with sports teams that allow those teams to profit, shouldn't those public entities have some protection if those teams, through their league, decide not to play because of a labor impasse? Should arena deals that involve the public contain lockout clauses?

Consider Memphis. The city has bonds against FedEx Forum; those bonds are paid off with revenue from FedEx Forum events. There are at least 41 fewer events -- high-revenue events, mind you -- going down in FedEx Forum if the season is cancelled. The city of Memphis could be on the hook for millions of dollars in bond payments with far less revenue coming in ... so that NBA owners can extract their pound of flesh from players.

Memphis might sue the Grizzlies and NBA, but that's a long, arduous process, and who knows whether the city -- struggling to cover basic obligations like police coverage -- will use resources on litigation, especially considering the in-flux nature of the stoppage. The city of Orlando, whose taxpayers helped build the new Amway Center, won't sue. No other cities that have taken public considerations or lease a public facility (as would be the case in Sacramento) have piped up yet.

This is an inelegant solution. Memphis doesn't need money a few years into a lawsuit, it needs money now. Cities who have ponied up the capital are being held hostage by the league, and there's seemingly nothing to protect them. It's just not right, right?

My proposal would be that cities signing new agreements with NBA teams -- whether it be a lease agreement as in Sacramento, or a co-owning situation -- hold those teams responsible for funding their allotted amount whether they play or not. If a given city is set to receive 30 percent of the team's gate, and an NBA lockout shortens a season to 50 games, cancelling 16 home games, teams should be on the hook to pay the city the missed revenue (in this case, 16 games times 30 percent of average per-game gate from the previous season). This should be done on the same schedule as laid out in the city's agreement with the team. (So if a team pays the city on a monthly basis, and the NBA cancels all of November's games, costing 10 home games, the team should be forced to fork that over on schedule.)

If the owners want to use a lockout to break the union, that's within their legal rights, assuming the union doesn't decertify. If the owners don't care about the impact on their relationships with TV partners, that's something for the TV partners to consider the next time contracts come up. But cities are often negotiating 25-year contracts. These are phenomenally big deals. Cities ensure that they have relocation clauses, often including prohibitive fines. Ensuring that revenue flows whether leagues are locked-out or not seems just as reasonable.

But is it feasible? We know better than most fans that getting or keeping a team is a competitive game. If Sacramento demands a lockout clause in its deal with the Kings, but Anaheim doesn't, does it behoove Sacramento to drop its clause to keep the team? Lord knows the NBA wouldn't volunteer to assign itself this financial burden. Someone has to be the first to do it, and honestly, it could put Sacramento at risk to take that bullet.

This oversight among NBA cities is only going to get fixed if cities stick together and make a stand. That's, frankly, never happened. As I said, this is competition. But now is the time for cities to rally around Memphis and demand that their needs and expectations be respected as the owners fight with the players. Personally -- and I'm not speaking on behalf of Here We Stay or anything, this is just Tom Ziller talking -- I urge the city of Sacramento to investigate and draft a lockout clause in any agreement with the Kings and/or the eventual operator of the new entertainment and sports complex. If the NBA owners pull this stunt in another 13 years, we don't want the basketball-haters showing up at City Hall yelling about taxpayer risk. We don't want to see the city on the hook for costs that should be met by NBA games. We deserve to get what we pay for. It's that simple.

(I can be convinced that other methods are more suitable.)

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