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Why The Milwaukee Bucks Are Selling A Move To Las Vegas Or Seattle

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Milwaukee Bucks President Peter Feigin has demanded $250 million in public funding for a new arena in downtown Milwaukee.  Feigin made it clear that failure to fund a new arena will result in the Bucks departing to Las Vegas or Seattle.  While Feigin may have justification for the move -- he cited to a purchase agreement's provision requiring the commencement of construction on a new arena in 2015 -- this is nothing more than a high-stakes negotiation with media involvement.  Will the NBA really move the franchise to another city, or is this merely a game of leverage to coerce the Wisconsin state legislature to submit more money for the team's benefit?

The dispute currently being waged in Wisconsin demonstrates just how complex team purchase agreements can be.   A single clause concerning the development of a new arena beginning this year could serve to blow up one of the guiding factors of the 2014 sale of the Bucks for $550 million -- that the franchise's new owners would keep the team in Milwaukee.

When Wesley Edens and Marc Lasry purchased the Bucks only a year ago, Senator Herb Kohl pledged $100 million for the development of a new arena in Milwaukee.  Edens and Lasry committed to match Kohl's contribution.

Upon the sale of the Bucks to Edens and Lasry, the official team website published a release containing the following:

"My priority has always been and will continue to be keeping the Bucks in Milwaukee," said Kohl. "This announcement reinforces that Milwaukee is and will continue to be the home of the Bucks. Wes and Marc agree, and they share my commitment to the long-term success of this franchise in Milwaukee."

Messrs. Edens and Lasry jointly stated: "We would like to thank Senator Kohl and his team for their support and cooperation throughout the purchase process. The Senator has provided the Bucks with nearly 30 years of dedicated stewardship, and we are very excited to join Bucks fans, the city of Milwaukee and the NBA to build the long-term success of this franchise. Having attended various sporting events in Milwaukee and Green Bay over the years, it is easy to see why the greater-Milwaukee area is such a storied sports atmosphere."

The release left out the key clause that required construction of a new state-of-the-art sports venue in Milwaukee to begin in 2015.  In just a year, the tone has changed from the Bucks' new owners being closely aligned with the city of Milwaukee and its "storied sports atmosphere" to their president throwing out threats of moving to Las Vegas or Seattle, stating that "the window is closing."

How did Kohl allow this to happen?  He insisted that any purchaser of the Bucks keep the team in Milwaukee.  Kohl must have figured that construction on a new arena would have begun by now or received some assurances regarding same.

This is not even the common case where a purchaser desires and requires the flexibility to relocate.  This is the rare instance where the seller could not fathom that sufficient support would be provided, after his own contributions and the matching commitment by the purchasers, to build a new arena, which is outdated and unfit for an NBA team.  Alternatively, Kohl was simply left with no better option.

Thus, hardball negotiation tactics have been put to test.  The Bucks are threatening to invoke a clause to sell the franchise back to the NBA and have put in the minds of Wisconsin legislators that a move outside of the state is a real possibility.  There is still time left in the quickly closing window.  Selling a move to Las Vegas or Seattle may light a fire to keep the Bucks from roaming abroad.

Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.