During the course of the past week, I’ve looked closely – perhaps too closely – behind the curtain which surrounds Aubrey McClendon and his company, Chesapeake Energy.
Let me blunt – I don’t like McClendon. I don’t think anyone reading this site would struggle to understand that, any more than they would struggle to understand my reasons. He’s a cold, manipulative man who believes the government has every right to interject itself into marriage, that privacy laws are as disposable as toilet paper, and that the environment is as easily replenished as his vast wealth.
Most importantly, he has no qualms with stealing a franchise that resided in Seattle for 40 years, just because his hometown needed something to do in the winter other than watch Sooner football DVDs.
But that’s a side issue for today – this is a free nation, and the Sonics don’t belong to Seattle any more than the raindrops which fall from the sky.
Today, I want to explore the sickening relationship between McClendon’s immense wealth and his complete lack of interest in using that wealth to help whichever city his team calls home.
Let us look, first, and some of the expenses McClendon has incurred in the past two years:
1. $400 million, to state of West Virginia in damages from lawsuit
2. $1.3 billion, decrease in value of his shares of Chesapeake Energy
3. $40 million, to purchase a plot of land in Michigan, upon which he will spend hundreds of millions to build a new housing development
And now let us look at, second, how much money he has spent assisting the cities which house the Sonics/Thunder in building new stadiums:
It is a disgraceful commentary on McClendon and Clay Bennett that they can withstand the costs listed above without so much as a blink of an eye, yet when they are asked to contribute to the very buildings in which their teams will play, they run in the other direction faster than Jerome James chasing a box of doughnuts.
Further, it is a damning tribute to David Stern that he spit upon a group of investors in Seattle which was willing to contribute hundreds of millions towards building an arena here, all the while heaping praise upon Bennett and McClendon, who have yet to spend one penny of their fortunes on building new stadiums.
Tim Keown wrote recently at espn.com about how the economic malaise facing the U.S. may spell the end of publicly financed stadiums. While his words are, in my view, wishful thinking, I pray that he is correct.
The time has come for this country to quit subsidizing billionaires on the backs of taxpayers. If stadiums were such a great investment – as owner after owner tells city after city – then why are there so few owners willing to build stadiums? They certainly have no trouble coming up with the hundreds of millions to purchase the team, so why can’t they come up with at least part of the money needed to house them?
The answer is simple – because they play us for fools.
As Keown wrote, if no other benefit arises out of this meltdown in the U.S. economy, perhaps it will be worth it if people such as McClendon are finally forced to part with some of their cash, and the government gets out of the business of stadiums.
I used to argue in favor of building sports arenas with public money, but sometime after the unveiling of Bennett's $500m stadium plan something about the whole business sickened me. I've mentioned this before, but the NBA did a number on us straight out of the 2005 book "The Great American Jobs Scam" by Greg LeRoy--corporations play cities/states against each other to get juiciest subsidies and sweetest sweetheart deals, while taxpayers get screwed. There's even a chapter on the sports stadium racket. You can bet those pages got flagged at the Clay-n-David BFF book club.
What did Seattle do to deserve Howard Schultz, Ken Behring, Clay Bennett, and George Argyros? Were we the city of Babel in a former life? How much more of these jerks are we supposed to endure?
To further answer your question as to why owners don't fund stadiums - becuase stadiums don't appreciate in value the way teams do. I can't think of a single example of a franchise which has decreased in value, but can think of dozens of stadiums which have been plowed under to make way for parking garages.
Billionaires didn't get to be billionaires by spending their money on stuff that didn't give them a good return. Governments, on the other hand, do it all the time.
This is a very well written article. If the city/state are going to pay for the stadium then they should then be given profits, or at least control of the selling of merchandise in the stadium. If my money pays for it, aren't I a part owner? Growing up I have always admired the Green Bay Packers because it was a team that truly was a representation of the the city, not just a business transaction. If the public pays for the stadium, then the public is owner of the stadium.
FYI - you guys got some love at True Hoop for the article. If enough of this style of article gets out there, perhaps things will begin to change.
yo kids, get 'em while they're hot!
there may be a few left! If nothing else, this is worth a good LOL for any Sonics fan.
Props to whoever wrote the article and to my main man Rafael! Sonics fans live on!
I live in Saugatuck Michigan. this is where McClendon purchased his 46 million dollars worth of lakeshore property. We're happy to have him. this area needs work BADLY. He's bringing it. Michigan has been in a one state recession for 10 years and this is good for us. I'm sorry you lost the Sonics but, he's not the big bad wolf as he's being portrayed either.
I too live in Saugatuck. We (the vast majority of the people who live here) don't want McClendonville built on the shore of Lake Michigan. Not only would it destroy what makes this place special, the citizens of Saugatuck and Douglas would get nailed for infrastructure costs because the development is in the township where the towns have no taxing authority. For more info check out:
I know nothing about basketball but I do know a little about Texas and Oklahoma energy tycoons. Like T Boone Pickens, Mclendon is going to see some rough times and when that happens he will drop projects like the Sonics like hot potatoes.
My adivce, get some investors together to be ready when that happens. Oklahoma City is a wasteland of broken promises and they (we) have seen guys like Mclendon come and go (usually leaving big infastrucutre projects half finished).
Press Release Today from Chesapeake Energy:
Chesapeake Energy Corporation Discloses CEO's Involuntary Sale of Common Stock
Printer Friendly Version (pdf format)
OKLAHOMA CITY--(BUSINESS WIRE)--
Chesapeake Energy Corporation (NYSE:CHK) today disclosed that its Chief Executive Officer, Aubrey K. McClendon, involuntarily sold substantially all of his shares of Chesapeake common stock over the past three days in order to meet margin loan calls.
Mr. McClendon commented, "I am very disappointed to have been required to sell substantially all of my shares of Chesapeake. These involuntary and unexpected sales were precipitated by the extraordinary circumstances of the worldwide financial crisis. In no way do these sales reflect my view of the company's financial position or my view of Chesapeake's future performance potential. I have been the company's largest individual shareholder for the past three years and frequently purchased additional shares of stock on margin as an expression of my complete confidence in the value of the company's strategy and assets. My confidence in Chesapeake remains undiminished, and I look forward to rebuilding my ownership position in the company in the months and years ahead."
Chesapeake Energy Corporation is the largest producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Fort Worth Barnett Shale, Haynesville Shale, Fayetteville Shale, Anadarko Basin, Arkoma Basin, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States. Further information is available at www.chk.com.
Source: Chesapeake Energy Corporation
I live in Oklahoma. McClendon is a prick. The people of the state passed a law to make it more difficult for illegal aliens to work in Oklahoma. The very day after we voted to pay for improvements to the Ford Center, McClendon unveiled his plan to use his money and influence to stop the law from going into effect. He did this because he uses a LOT of illegal workers in his businesses. This really made everyone mad and left a bad taste in our mouths concerning him and the basketball team. He used us and then turned around and tries to screw us over. He buys every piece of land that he can get his hands on, making it very difficult for farmers and other people who make a living in real estate to buy land. He tries to really take advantage of people in difficult times and steal the land at low prices. He has a bunch of goons that like to go around and harass other land owners and trespass anywhere they want. When you confront them they just throw their weight around and and keep reminding you that they work for Aubrey McClendon. Thugs. I don't know anyone in the oil business that thinks he is an upstanding guy. His original partner, Tom Ward, got the hell out of there years ago and went on to do his own thing - smart guy.
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