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NBA's decision on Kings may stretch past April 18

By David Aldridge, TNT Analyst
Posted Apr 3, 2013 8:02 PM - Updated Apr 4, 2013 6:20 AM

NEW YORK -- The decision on where the Sacramento Kings will play basketball next season might not be made by the April 18 Board of Governors meeting, NBA Commissioner David Stern said Wednesday, detailing the full complexity of the decision the league has to make on whether to keep the Kings in Sacramento or approve a sale of them and move to Seattle in time for next season.

Stern and Deputy Commissioner Adam Silver on Wednesday seemed genuinely uncertain about how this years-long saga will finally play out, saying their owners needed to amass more information about numerous topics before they could even begin to make a call on which city will win and which will lose.

"There are questions that the committee has asked us, the staff, to go back and seek details and answers on," Stern said at a late afternoon news conference.

The main questions, Stern said, centered on the arena plans for each city -- specifically, how soon they could go up, potential legal obstacles to the buildings in each city and the capital commitments that will be required from each group. The time frame for getting the new arenas built is central to each city's bid because both Key Arena in Seattle and Sleep Train Arena in Sacramento are, as Stern put it, "suboptimal arenas" that the Kings would have to play in for some period of time, "given the fact that there is no finality to the construction schedules in either city," he said. "And so we have a lot of work to do from a construction timeline, a regulatory timeline, an ownership and capital structure timeline, and all kinds of other things that the committee has asked us to go back, with lawyers, and just get a lot more data and information."

Officials from Sacramento and Seattle made their pitches to the combined Relocation and Finance committees, with Stern and Silver sitting in. Owners present included: Spurs owner Peter Holt, the chairman of the Board of Governors; Timberwolves owner Glen Taylor; Thunder owner Clay Bennett, the chair of the relocation committee; Knicks chairman James Dolan; Wizards owner Ted Leonsis; Raptors owner Larry Tanenbaum; Pacers owner Herb Simon; and Celtics chairman Wyc Grousbeck.

Showing an uncertainty in public that is rare, Stern and Silver detailed the labrynth of issues that will be necessary for owners to navigate in the coming weeks. But those issues may prove too complicated to be resolved one way or another by the 18th, even as the NBA understands it needs to make a choice.

"There are practical considerations," Silver said. "We have to plan for a season. So there's the combination of a timeline set out in the (NBA) constitution for making a determination, and there are also the factors that you point out -- not just setting a schedule, selling tickets for next season, selling sponsorships. The owners are mindful of all of those factors."

Said Stern of his owners: "they're pushing us. And I guess all that we want to say about that is we are doing it as fast as we collectively can, together. And it may well slide past the Board meeting. But I wouldn't expect it, if it does, to slide by a lot. Because there's a combined interest in having some clarity come to this situation."

Stern said there would be an additional meeting of the relocation and finance committees before the April 18th Board of Governors meeting.

At stake is whether the league will approve the proposed sale of the team to Seattle hedge fund manager Chris Hansen, who reached an agreement with the Maloof family in January to buy 65 percent of the Kings for $341 million, making a franchise valuation of the team of $525 million. Sale approval requires three-quarters, or at least 23 of the league's 30 teams voting yes.

If the sale is approved, the committees would then vote on whether to recommend the Kings be moved to Seattle in time for the 2013-14 season. That vote would require a simple majority of the 30 teams. Stern has made it clear that while the league generally allows owners to sell to whomever they like if they pass financial muster, it reserves for itself the determination of whether a team will leave a market -- especially one that has been as loyal as Sacramento's has been throughout the years.

George Maloof came to the meeting Wednesday and, according to the Seattle contingent, reiterated his desire that the sale to Hansen be approved.

Sacramento Mayor Kevin Johnson led his city's group, which included two of the major financial forces that came together in the last couple of months, 24-Hour Fitness founder Mark Mastrov and TIBCO founder Vivek Ranadive, who is also a minority owner of the Warriors, and who would be the first Indian owner of an NBA team. State senator Darrell Steinberg also was in attendance to assuage owners that the arena deal would not face any political resistance.

The Seattle contingent was led by the primary forces behind the city's bid for the Kings, Hansen and Microsoft CEO Steve Ballmer, along with Seattle Mayor Mike McGinn and King County Executive Dow Constantine, who was in the same role for his city as Steinberg.

The committee's questions to the Seattle group were "all about the arena," a source said, indicating what many had believed would be the case -- the decision will likely come down to which city can get a viable arena deal completed quickest, and with the least amount of financial difficulty.

As he has done throughout the process, Hansen gave very few specifics in his brief remarks to the media, declining to give answers about what was discussed between himself and the owners.

"I think we were very well prepared," he said. "We're optimistic. And the ownership group's very enthusiastic. And we appreciate the NBA's got a tough decision to make, and we're hopeful for an outcome in our favor."

Hansen did make sure to mention the claim that the Seattle group has more than 48,000 online requests from local fans for season tickets and suites, which came in the days after Hansen asked for a public show of support from the city and surrounding areas.

Johnson led a raucous news conference afterward in which the Sacramento group continued to pound home the importance of keeping the team in the city as part of a statewide economic investment. Several times, Johnson mentioned California's status as "the eighth-largest economy in the world," and noted that the investors in the Sacramento group come from throughout the state, in cities that are crucial economic engines.

"The atmosphere in the room, from our standpoint, was very positive," Johnson said, "very engaging, and we got a chance to lay out, again, what we thought was a very compelling case ... we're talking about kind of the revitalization of a community. We're talking about the globalization of a franchise. And we're talking about the transformation of a team. I was just very, very proud of our group."

Johnson said that Sacramento could not do more than it has over the last two years to show it supports the Kings and wants them to stay.

"We've been here before," he said. "Literally. Two years ago. And there were three things that we needed to deliver on. And our community did it each step of the way. So I'm there saying we made good on our promise to you folks. Not once, but twice."

Ranadive laid out a vision of the future of the league he called "NBA 3.0," in which the game surpasses soccer to become the world's most popular sport.

"I am lucky to be part of this ownership group," he said. "I have always been able to hang out with people who are a lot better and smarter than me ... the owners gave us a very fair hearing. All of the questions they asked were fair."

However, Ranadive would not answer after the Sacramento news conference whether his group was prepared or had put down a non-refundable $30 million deposit for the team, as the Hansen group did, or if the Sacramento group would match the $341 million the Hansen group pledged to pay for the 65 percent of the team.

"We don't want to get into the details of the meeting," Ranadive said. "But as the Mayor said, we're playing to win."

Silver said the $30 million deposit the Seattle group made was not crucial when evaluating the Sacramento bid. And Stern told reporters after the news conference that the price of the team was no longer an issue, making clear the resolution of the arena situation is likely to be the decisive factor.

"It's two entirely different situations," Silver said. "When the Seattle group put down the down payment, that was a contingent deal, based on, of course, the ability to purchase and relocate the team. We're dealing with a different circumstance in terms of potential Sacramento buyers."

Stern reiterated, again, that expansion for one of the cities, with the other getting the Kings, is not an option.

"Right now, expansion, sort of on horseback, so to speak, is not a prudent way to run a league," Stern said. "Without knowing what you're selling, what the next TV deal is worth, what the full scope of international is, what our social media, digital rights (will be), etcetera, to cut off a chunk of that and have an expansion is just imprudent on a quick decision. Doesn't mean that sometime in the future it isn't potentially on the table, but right now, it's not."

McGinn said that there were few questions from the owners, but that those who did have them wanted to "get into the details" of Seattle's bid. Constantine said after the news conference that Hansen detailed every source of potential new revenue from a new arena, including naming rights.

"For (owners), this was really their first exposure to it," McGinn said. "So they just wanted to understand the nature of the deal."

McGinn said he met with Stern in New York last June to indicate that a new bid for an NBA team in Seattle would have the full support of the city and King County. The Sonics left in 2008, in large part, when the city and county were stymied by the Washington State legislature, which would not okay using public funds for a new arena. And Ballmer's last-minute pledge to spend $150 million of his own money toward construction of a $300 million arena in the Seattle suburbs did not sway the NBA, which approved the move of the Sonics to Oklahoma City.

By contrast, Hansen put together an arena plan in which he would spend $290 million, with $200 million in public funds coming from the city and King County, not state monies.

Not having to deal with the state legislature "makes it much, much simpler not having the state legislature and state politics involved in it," Constantine said. "King County is half of the economy of the entire state of Washington. We have, locally, the capacity and the will to bring basketball back to town. It's made it simpler, cleaner, and ultimately, I think it will be successful."

Though Seattle has consistently intimated that the Kings would play in a renovated Key Arena for two years while the new $491 million building is constructed in the South of Downtown (Sodo) section of Seattle next to Safeco Field, McGinn would not commit to an arena being completed in Seattle in time for the opening of the 2015-16 season.

"I guess I can't speak to the exact timeline," he said after the news conference. "My understanding is that it's a two to three-year timeline. We're aiming for two, but things can get a bit longer. I wouldn't make an iron-clad promise, but two years is the objective."

Sacramento's City Council voted 7-2 last week to approve the use of $255 million in city funds toward building a $448 million sports and entertainment complex at the Downtown Plaza Mall site. Billionaire grocery store magnate Ron Burkle, the owner of the NHL's Pittsburgh Penguins, has pledged to spending the rest of the money toward construction of the new building.

More than $200 million of the city's contribution would come from selling bonds that would be covered from future revenues from existing parking lots, which would be sold to private companies. The city's contribution is the same as the one it agreed to last year, when the NBA, entertainment giant AEG, the city and the Maloofs tentatively agreed to build a $391 million arena in the Railyards section of Sacramento. But the Maloofs walked away from the deal, leaving the city in a lurch.

"We've never had a situation like this," Stern said. "And my role, I view it here, is to make sure (the owners) focus on the issues. The seriousness of purpose here is incredible. Because they know what's at stake for two communities here."

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