First losing season in 15 years leads to drastic moves

SEATTLE -- The Seattle SuperSonics reportedly lost $17
million in the 2002-2003 season, when they had their first losing
season in 15 years, and the NBA franchise is laying off employees.

The team laid off six of its 120 employees in a budget-cutting
move Friday -- five percent of the Sonics' staff.

"Yes, cutting costs was the motivation behind the layoffs,"
Valerie O'Neil, senior director of public relations, told The News
Tribune of Tacoma on Friday. "But it also was a reorganization to
align our work force with a new sales emphasis."

She told the newspaper no further layoffs were expected. O'Neil
did not immediately return telephone calls Saturday.

Several team sources told The News Tribune that the franchise
lost $17 million last season, though the Sonics received a
luxury-tax payout from the NBA of more than $15 million.

Without the $15 million, the team would have lost $32 million,
the newspaper said.

At least half of the $17 million in losses will be incurred by
majority owner Howard Schultz, the Starbucks Coffee magnate who
bought the team from Barry Ackerley for $200 million in April 2000.

Last year, the Sonics reported $10 million in losses for the
2001-2002 season.

The Sonics missed the playoffs for the third time in five
seasons with a 40-42 record last season, their first losing record
since the 1986-87 round. In a blockbuster trade, they swapped Gary
Payton to the Milwaukee Bucks on Feb. 20 for Ray Allen.

In February 2002, Schultz told The Associated Press that
city-owned Key Arena, where the Sonics play, was not working
financially for the team.

"We're at a competitive disadvantage between now and 2009 in
not owning the arena," he said at the time. "We don't have access
to the revenue opportunities that many of the other teams do that
gives them a competitive advantage."

But Schultz said he planned to honor the years remaining on the
lease, which is up after the 2009-2010 season.

The Basketball Club of Seattle, which operates the Sonics, also
runs Seattle's WNBA franchise, the Seattle Storm.