The Kings currently play in the outdated Sleep Train Arena and the Maloofs have entertained offers from municipalities like Anaheim and Virginia Beach that would see the team play in a more modern facility. In Seattle, several leading local and Am Law 100 firms have put in place a $490 million deal for the construction of a new arena where the Kings-turned-Sonics could play within the next few years, according to our previous reports.
Koewler, who stepped down as managing partner of 130-lawyer Downey Brand last year, is well aware of the economic challenges facing Sacramento. He says real estate has traditionally been the region's biggest industry, but acknowledges business has slowed over the past few years. (Downey Brand, which opened a San Francisco office three years ago, picked up more than 20 lawyers in 2010 following the collapse of leading local firm McDonough Holland & Allen.)
Nonetheless, Koewler says that Sacramento is resilient, and he's determined to keep the city's sole major professional sports franchise from fleeing elsewhere. To do so he'll need to overcome the strong bid put forth by Hansen and Ballmer, which reportedly includes a nonrefundable $30 million deposit on the Kings that will be lost if the NBA rejects their proposed purchase of the team.
The NBA itself has only once in its history moved to block the sale of a team. The league scuttled a $152.6 million acquisition of the Minnesota Timberwolves in 1994 by boxing promoter Top Rank and its Harvard Law School–trained founder Robert Arum, who would have moved the team to New Orleans. The decision sparked a brief court fight that ended with the T-Wolves remaining in Minnesota.
Koewler proclaims to have no idea whether Sacramento might pursue litigation in the event the Kings are sold off and repurposed by Hansen and Ballmer as Sonics 2.0. "I'm a transactional guy," adds Koewler. "The only time I've been in the courtroom is to fight a parking ticket."
Before they left Seattle in 2008, the Sonics themselves were known for flirting with other cities in an effort to secure a new arena deal of their own. Eric Rubin spent 18 years as a lawyer for the team during his role as general counsel of a communications company owned by late Sonics owner Barry Ackerley, who threatened to move the franchise to San Diego in 1989 unless renovations were made to the team's arena. Seattle acquiesced. (Rubin, now a name partner at Washington, D.C.'s Rubin, Winston, Diercks, Harris & Cooke, did not respond to a request for comment.)
Now Sacramento is faced with a similar situation—put up public money to help finance a new arena or have its team torn away. The inability of Seattle to hold on to the Sonics stemmed from the Emerald City's unwillingness to pick up the tab on a new building to replace KeyArena, the same facility renovated in the mid-nineties.
The Sonics eventually left Seattle after the city reached a $75 million settlement with the NBA that allowed the team's name to remain behind. The ownership group selling the franchise to Oklahoma businessman Clayton Bennett was led by Starbucks CEO Howard Schultz, but was also composed of several prominent local lawyers, according to a report at the time by the Seattle Times. After the dot-com bubble went bust in 2001, the newspaper reports it took 58 people to come up with the $200 million necessary to buy the Sonics from Ackerley.
Besides Schultz, the team's new ownership group at the time included other Starbucks employees, technology investors, and Fast Break Partners‚ a group of Perkins Coie lawyers led by business practice chair Stewart Landefeld, labor and employment partners Valerie Hughes and Michael Reynvaan, litigation partners Ronald Berenstain, Harry Schneider Jr., and V.L. Woolston, and corporate partner Patrick Simpson. (Former Perkins Coie life sciences partner Roger Tolbert, who joined Fenwick & West in 2008 but is no longer with the firm, was also part of the group.)
Landefeld, who advised on the acquisition of the Sonics by Schultz's group in 2001 and the subsequent sale of the team in 2006, did not respond to a request for comment. Nor did Stanley Barer, of counsel with Garvey Schubert Barer in Seattle, who also owned a piece of the franchise.
