Super Sonic Lease Case Study

Decent Essays
The new Seattle arena will play host to many visitors, but the major tenants will be with a professional NHL and NBA team. The NBA team, presumably which will be named the Super Sonics, will be primary tenant. The leasehold agreement with the Super Sonic will be include be comprehensive and extensive. However, the key provisions of the lease will likely include: term, rent, ticket revenue, concession revenue, parking revenue, naming rights, merchandising revenue, staffing, insurance, maintenance costs and responsibilities, and non-relocation. The Basics: Term and Rent First, and most important, will be determining the term of the lease. It is very plausible that the lease will be for twenty (20) years, not considering any extensions or amendments to the lease. A twenty-year lease would be on par with other leases currently in existence in the NBA. Take, for example, the 15-year base lease Oklahoma City Thunder lease for the Chesapeake Energy Arena. Additionally, it is likely that the lease will contain a number of optional renew terms of a short duration. The optional renewal terms will likely be either three (3) or five (5) years. The…show more content…
However, payment and responsibility to provide for the maintenance will be covered by the City of Seattle. This cost will be covered through the ticket surcharge of $2 noted above after all construction overruns are covered. The Super Sonics will, however, be charged for upkeep for any facilities or offices that they maintain at the arena year round. The lease will also contain a provision requiring the City of Seattle to maintain the arena to certain standards. For example, Miller Park is required to maintain the stadium on par with the top 75% of stadiums in MLB. Similarly, the provisions will require the City of Seattle to keep the arena up-to-date in line with the top 75% of NBA
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