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Hawks' Arena Debt, Lease Agreement Would Make Leaving Atlanta Very Expensive

Given recent high-profile relocations in the NBA and in Atlanta -- the NHL's Thrashers moved to Winnipeg this offseason -- folks in Georgia may be understandably concerned that the Hawks, purchased by California businessman Alex Meruelo, may be moved to Anaheim. But according to SB Nation Atlanta's Phil Foley, relocation will prove mighty expensive if it's sought.

Meruelo says he has no plans to move the Hawks, and it's hard to imagine that the NBA would want to leave a market like Atlanta, especially considering that Philips Arena is just 12 years old and remains competitive with newer buildings in terms of amenities.

But, as Foley describes, the costs of relocation would likely be prohibitive.

[U]nder the terms of the new bond agreement, the Hawks cannot leave Philips Arena for at least seven years even if they pay off the bonds in their entirety. If the Hawks do leave, there's a $75 million "early termination penalty" that the Spirit or the new owners that want a team elsewhere would be socked with. [...]

[The team] could theoretically pay off the remaining $123.5 million in bonds off tomorrow and the Hawks could leave, but they cannot leave until the 2018-19 season at earliest without also forking over another $75 million in addition to the $123.5 million or so left remaining on the bonds.

Even that is an incomplete pricetag: the NBA has a relocation fee that is decided by the other 29 owners. The last time a team relocated, in 2008, the Oklahoma City Thunder had to fork over $30 million. The L.A. Lakers and Clippers threatened to push for a painful relocation fee when the Maloof family attempted to move the Sacramento Kings to Anaheim last season. The costs of relocation could easily exceed the value of the franchise.

That makes relocation -- to Anaheim or anywhere -- pretty much untenable. So sleep easy, Atlanta.