City Attorney Mac McCarley sent these answers to commonly asked questions about the city's involvement in the arena:
Q: How long is the agreement with the Bobcats?
A: Through the end of the 2029-2030 NBA season.
Q: What happens if they’re sold?
A: The new owners would be subject to all the same restrictions and guarantees.
Q: Can the team leave?
A: No. The city may seek an injunction to force the team to honor the commitment to play here, or can enforce liquidated damages of $200,000,000 in the first 5 years (2005-2010), $150,000,000 in years 5 – 10, and a declining balance going from $85,000,000 in year 11 down to $7,000,000 in year 25.
Q: What protects the city from the team leaving?
A: The liquidated damage provisions are guaranteed by the team and by Bob Johnson personally.
An Observer story Friday said Bobcats owner Bob Johnson is looking to sell the team.
The city agreed in 2002 to build the $265 million arena where the Bobcats play. Part of the deal was that the NBA team would operate the facility and keep most of the revenue from it.
Click here to read the city's final arena agreement.
- Julia Oliver
Friday, May 22, 2009
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11 comments:
And those contracts become null and void if the team were to declare bankruptcy.
No, I don't think that's likely - but would you really put it past Bobcat Johnson?
Anon, I'm not a lawyer, but I think more precisely the city would have no one to collect from in the event of a bankruptcy of Johnson's team owning arm.
This is why moving is not the threat -- it is having the franchise simply go poof in precisely the manner that the Sting did.
Bottomline -- and Mac knows this -- the city cannot force Bob Johnson to lose money forever. Taxpayers could therefore be left holding the bag in a number of nasty ways -- such as amending the operation of the arena to provide greater subsidy to any new owners.
Don't think for one minute that any arena deal will keep them in town. I am commenting from Seattle. We had a deal with no buyout clause at all. no way to escape the lease. Introducing the Oklahoma City Thunder!
Let the team leave. Charlotte doesnt have the market for bball. Send them to Durham or Raleigh and bring the hurricanes here. Thats a fair trade.
Piss on Bob, and his Cats!
There is currently a tussle with the Phoenix hockey team and RIM wanting to move them to Canada; the team wen bankrupt, nullifying the contract. Currently the NHL is oppose to this as well as the city.
If they are allowed to move, I think we just found out how a team can leave a city with a contract that says NO.
You guys wishing the Bobcats to leave only hurts Charlotte for further sports franchising if the do leave!Now that's plan dumb!!
Sorry no trade Charlotte for the Canes in Raleigh. We would not take the Bobcats AND the Panthers (yes I am a fan) together for the Hurricanes. Now if you threw in Nascar we might reconsider but that is a big IF.
BTW Eastern Style BBQ is better than that Western stye BBQ you put ketchup on.
Ray in Raleigh.
This is not a surprise - they sold the Coliseum off Tyvola which was a larger facilitya nd had adequate parking for a huge loss.
The City of Charlotte leaders made the decisions to sell Coliseum and spend taxpayer dollars against taxpayer wishes to build the arena that they still cannot sell out.
So City of Charlotte leaders are just "reaping what they have sewn"
And just think if Pat McCrory had been elected governor what shape our state would be in! He is the one who pushed through the arena deal AFTER 57% of Charlotte residents voted AGAINST using tax dollars to build the arena. I think Pat and his friends in the Charlotte media, espcially channel 3, should foot all bills related to the arena, and leave the tax payers alone!
Thanks you. Very good post.Unless they can offer a really compelling reason for users to come back, it will be the next Bebo, MySpace
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