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O’Neil: Howard Schultz’s excuses for selling Sonics range from misleading to outright lies

Howard Schultz, who sold the Sonics in 2006, is considering a run for President. (AP)

As far as sorries go, Howard Schultz provided a pretty good one on Thursday night.

Protest gathers outside Howard Schultz event in Seattle

“I’m responsible for what took place,” he said, “and I think the lesson is that when you have power and responsibility like I did with the Sonics, you must demonstrate restraint. It’s a very hard lesson. I have to live with that lesson, and it’s a mistake that I made, and I apologize.”

Unfortunately, that apology was tacked on to the end of a 7-minute monologue that ranged from misleading to disingenuous to outright lies about the issues that led to the sale of the Seattle SuperSonics in the summer of 2006 to a group that moved the team out of town two years later.

This was the Seattle stop of a national book tour, which is doubling as Schultz’s trial balloon for a presidential bid. I sat three rows from the back of the Moore Theater on Thursday night where Schultz was on stage in one of two dark green leather chairs. An end table was situated between the two chairs, a copy of his new book propped up in front of two glasses of water from which no one ever drank. A man in a suit stood just off stage to Schultz’s left, a squared-off security figure whose hands were clasped in front of him, elbows bent at 90 degrees with his eyes on the crowd. I assumed another security guard stood off-stage to Schultz’s left, obscured by the curtain.

The Sonics were the subject of just one question in the 90-minute appearance. Schultz spent 7 minutes explaining the difficulties facing the team, from the terms of the KeyArena lease to the intransigence of the city and the pressure that led him to ultimately sell the team. And when I say “great lengths,” what I really mean is that he mischaracterized, he exaggerated and in a couple of cases he outright lied. Here’s an inventory with the quotes being a verbatim transcription of what Schultz said about the sale on Thursday night at the Moore Theater:

1) Outright lie: Schultz said, “I was convinced that if an out-of-town buyer were to buy the team that the city of Seattle, the mayor and the city council, would understand that an out-of-town buyer bought the team, and if he doesn’t renegotiate the lease and get the lease that he deserves, he’s going to take the team and move. And the city of Seattle basically said, ‘No. We don’t care if it’s an out-of-town buyer or not. We’re not renegotiating.’”

In actuality: The lease was never a question once Clay Bennett purchased the team in 2006. He demanded a new arena or “successor venue,” in corporate-speak. In fact, the idea that a renegotiated lease would have satisfied even Schultz in 2006 before the sale is absurd. The team was already seeking a new or at least renovated arena before Bennett ever bought the team.

2) Outright lie: Schultz said, “For five years, we went forward. The team did well one year, not so well the other four. And each year we were not only losing money, but we were losing more money than the year before.”

In actuality: The team made the playoffs twice in Schultz’s tenure as owner, 2002 and 2005. The team’s overall record in the five full seasons he owned it was 209-201, but what makes Schultz’s poor-mouthing of the team’s record so disingenuous is that he, himself, advocated this big talk about a five-year plan at the end of which the team would be a contender. At the time, he saw the early mediocre seasons as a necessary step in rebuilding the team.

3) Mischaracterization: Schultz said, “The Seattle SuperSonics probably had the worst professional-sports lease, not only in basketball, but perhaps in any other sport. And I knew that going in.”

In actuality: The lease may not have been favorable to the Sonics. It also wasn’t the real issue because what Schultz and the owners really wanted was an overhauled arena. That was a tough sell considering that KeyArena was less than 10 years old at the time, but there were elaborate pitches about how the 1990s renovation was done on the cheap, and how much Seattle really needed an overhaul to be competitive in the league. The team even went to Olympia to lobby for it, yet while Schultz mentioned the lease six times on Thursday night, he never mentioned that desire for a new building on Thursday night, which is at best disingenuous and at worst a lie of omission.

4) Mischaracterization: Schultz said: “Every year, the owners had to give more money back into the team to keep the team going. Well, since I was the person, I started getting a lot of pressure from many of the owners.”

In actuality: He’s right, the ownership group was frustratingly large. There were more than 50 different individuals composed into a number of voting groups. But Schultz makes it seem like it was others who were agitating for a sale against his wishes when in fact he wanted out, too, as badly if not moreso than other owners. He admitted as much later in his apology: “I said, ‘I’m willing to sell my part of the team if somebody else wants to buy the team from inside the group and we’ll just leave and we’ll take our money for what we put in.’ No, nobody inside the ownership group of either side wanted to buy the team primarily because we were losing so much money.”

5) That brings us to the single biggest mischaracterization Schultz made: Financial losses. He mentioned losing money five different times in the 7 minutes he spoke.

In actuality: Any discussion of financial losses is misleading if you don’t put it in the context of the overall investment. In 2001, the Seattle SuperSonics were purchased for a reported $200 million by the group led by Howard Schultz. In 2006, the franchise sold for $350 million to the Oklahoma City group. Any year-to-year operating losses the franchise incurred were more than covered by the profit that was realized upon sale. It’s absolutely unbelievable to think Schultz can get on stage and talk about losing money because he owned the Sonics.

What Schultz did to Seattle’s oldest pro sports franchise is not unique. The past century is littered with rich owners of sports franchises who completely disregarded and/or hosed the very supporters that made those teams viable. Just ask Cleveland about Art Modell. Or Baltimore about Jim Irsay. Or Oakland about the Davis family, which is in the process of pulling the Raiders out of Oakland for the second time in the span of 35 years.

What’s different here is that Schultz now has the gall to pop up more than 10 years later, apologizing to Seattle only now that he’s asking the country if he should run for president.

And in that way, his apology on Thursday night was perfectly appropriate. Because once he actually delivered it after 7 minutes of worming around his responsibility, I wasn’t really all that interested in hearing it.

O’Neil: A farewell to Howard Schultz, the man who sold out the Sonics