Earlier today on Twitter, Rick Westhead posted a link to a document on the Scribd website that shows the lease agreement between the Seattle Thunderbirds and the City of Seattle/Seattle Center.
The agreement is 4 years in length and covers the 2003-4 WHL season through the 2006-7 WHL season, inclusive. While we won’t go over the entire agreement in depth, we will hit a few highlights that we found interesting.
(Before we get into our analysis, a disclaimer that we are not lawyers and any interpretation of the agreement is personal opinion and is not based on any law or legal knowledge. Any errors made in interpreting the agreement are not made with the intent to deceive or confuse.)
Scheduling takes a up a decent-sized portion of pages 4-7. The agreement is pretty specific as to when the Thunderbirds would be able to play home games at KeyArena. By February 15th of each year, KeyArena would give the TBirds a list of 51 dates available for them to play home games. At least 1/3 of those dates had to be a Friday or Saturday night and, of those, 8 had to be during the months of January through March, inclusive. Once the Sonics schedule was released, the TBirds would be allowed to select from dates that had been set aside for basketball but not chosen by the Sonics, with certain exceptions.
On page 11, the agreement gives the TBirds the right to refuse approval of KeyArena to be used for any professional, semi-professional, WHL or major junior hockey game that doesn’t involve the TBirds. That clause, however, does not include a non-professional sponsored game such as an NCAA or US Olympic sponsored game.
Page 13 begins the outline of what the TBirds need to pay the city as part of the agreement to play at KeyArena. For the initial season of the agreement, the 2003-4 WHL season, the Thunderbirds would pay 16.5% of gross ticket revenue or $300,440, whichever was greater. The fee would cover all 36 home games of the regular season and the first two games of the playoffs. If you take the fixed fee number and divide it by the number of games it covers, it equals $7906.32 as a per game fee.
We’re going to step out of the agreement analysis for a second and just do a little math here. In the 2003-4 season, the TBirds had an attendance of 160195 in 36 regular season games. The highest ticket cost that season was $18. (Obviously not everyone in attendance paid this price when you take into consideration suites, season ticket holders, etc.) But for worst-case scenario sake, let’s say each of those people paid $18 for their ticket. That would be a total $2,883,510 in gross ticket revenue. 16.5% of that is $475,779.15, or $13,216.09 per game. That’s how much the fee would have been for the 2003-4 season, in a full price scenario. (The TBirds failed to make the playoffs in the 2003-4 season). Even using the base number of $300,440, that means for the length of the agreement, the TBirds would pay a minimum of $1,201,760.
Page 13 also points out that the per-game fee for all playoff games after the first 2 and for any pre-season game was $13,000. As you can see from the number we figured a couple paragraphs back, that’s well above the per game fee for the base price of the season and about equal to the worst case price scenario from the last paragraph. It also explains why pre-season games were never held at KeyArena and instead were held at smaller (and most likely cheaper) rinks around the region.
Page 18 outlines the revenue sharing between the TBirds and the city when it came to concessions. The city would keep all gross concession revenue from the 36 regular season games and first 2 playoff games up to $300,000. Any amount above that would be split equally between the city and the TBirds. That number works out to $7894.74 in concessions per game, for 38 games, to reach $300,000. Not an outrageous number, sure, but remember only when they reached that number would the TBirds start to see any money from that. And then it was a 50/50 split. For the playoff games beyond the first two, the TBirds would receive 10% of the gross concession revenue, which could be applied to the $13,000 fee to use KeyArena.
(Actually, now that we’ve reached the bottom of the agreement, this paragraph needs some clarification. If all you read was page 18, it would seem that our analysis is correct. However, it’s actually much worse. The $300,000 threshold is actually the city’s share of gross concession revenue. The city and the concessionaire split the gross revenue 32% for the city and 68% for the concessionaire. That means there would need to be about $900,000 in gross concession revenue per season (or $23,684.21 per game for 38 games) before the TBirds saw any of the concession money. And again, remember that the TBirds only got 50% of the city’s share that was above that threshold.)
Page 25 seems to indicate that it was up to the TBirds if they wanted to have concession people walking through the stands selling items. It seems like this practice was prevalent in the early days of KeyArena but not so much towards the end.
Pages 27-32 deal with the required insurance minimums the TBirds have to have in order to play at KeyArena. This enters an area in which we have little knowledge and can’t provide assessment. However, it is worth reading if you have an understanding of insurance, costs, coverage, etc.
Page 34 required the establishment of at least one section to be designated as alcohol-free. Would need a schedule from back then or a seating chart to verify, but seem to remember that that section was in one of the corners (103 or 110) and was only above a certain row.
That is a very brief look at the agreement. If you found any of this interesting, we encourage you to take a look at the entire document at the link in the first paragraph. If you like poring over legal documents, this one will be right up your alley.
Given all the numbers we looked at, we can see why an arena in Kent with a much better lease agreement was attractive to the Thunderbirds and why they moved out of the city they had called home since 1977.
One final note. We’ve already seen some people and groups on Twitter latch on to specific phrases used in the agreement to prove that the WHL is a professional league or that the players are not amateur athletes. While we have our own opinions on the matter, we aren’t here to sway you one way or the other. What we will say, however, is that we would assume that language such as “employees” is common for legal documents and would probably exist in a similar lease agreement with another institution such as Seattle University or the NCAA. The term is used generically and is also alongside the word “players”. The presence of that language doesn’t necessarily indicate legal status. Also, with regard to the phrase “Professional Hockey” that is used in one of the section headings, this is also balanced out later by specifically calling the WHL a non-professional league and also indicating that the WHL is a “junior” league. Again, we don’t believe the language of this agreement settles the amateur status of WHL players and to use it as a definitive argument, one way or the other, seems unwise.