David Aldridge, TNT Analyst
Posted Apr 13, 2013 1:52 AM
In a stunning upping of the ante late Friday night, hedge fund manager Chris Hansen announced he had "voluntarily" raised his bid for the Sacramento Kings to a franchise valuation of $550 million, up $25 million from the previous franchise valuation of $525 million.
Hansen and Microsoft CEO Steve Ballmer have a binding agreement with the Maloof family to buy the Kings. If the sale is approved by the NBA's Board of Governors at its annual meeting next week, the league's owners would then have to vote on whether to allow the Kings to move to Seattle, which is the goal of the Hansen group.
The increase in the sale price of the team, disclosed in a brief item Friday night on his webpage detailing the group's bid for the Kings, came as there were conflicting reports on whether the group of investors trying to keep the team in Sacramento had indeed agreed to match the previous $525 million evaluation.
While numerous reports insisted the group, now led by TIBCO founder and Warriors minority owner Vivek Ranadive, had told both the league and the Maloofs that they would match, a source directly involved in the negotiations said late Friday that the Maloofs have received no indication, written or otherwise, that the Ranadive group will match.
Nor, the source said, had the group pledged or given written assurance it would match the $30 million non-refundable deposit that the Hansen group made to the Maloofs in January. Earlier Friday, a source had said the Ranadive group had made such a pledge.
"While we already have a binding purchase agreement to purchase the controlling interest in the team," Hansen wrote on the website, "the Seattle Ownership Group has elected to voluntarily raise its purchase price as a sign of our commitment to bring basketball back to our City and our high degree of confidence in our Arena plan, our financing plan, the economic strength of the Seattle market, individual and corporate support for the team and, most importantly, the future of the NBA."
Based on the $341 million Hansen's group pledged to buy 65 percent of the Kings in January, the $550 million valuation means Hansen will actually pay an additional $16.5 million to the Maloofs if they are approved by the league.
Sacramento Mayor Kevin Johnson sent out a series of Tweets late Friday night.
"Sacramento is playing to win, including having assembled a world class ownership group; voting to move forward on an arena," Johnson wrote, "and securing significant fan and corporate support. We know the NBA has never moved a team from a market that has performed and where a clear path to an arena has been demonstrated."
Hansen, the source said, approached the Maloofs, expressing a desire to make a move that would give Seattle a definitive edge.
"And Chris has more," the source said.
Hansen will not increase the $30 million deposit he made.
A source had said earlier that the Maloofs would be willing to sign a deal with the Sacramento group that would be an acceptable backup in case the league rejected the Seattle sale. The deal would have to include the same non-refundable $30 million deposit the Hansen group made, the source said.
The Maloofs, the source said, still preferred the Seattle plan and wanted to execute the deal with the Hansen group, but relented in their opposition to doing a deal with Sacramento investors.
The Sacramento group changed its players this week, with grocery magnate Ron Burkle dropping out of the team/arena bid after a potential conflict of interest with one of Burkle's holdings was discovered. Burkle would still be involved in development of the area around the arena site, Sacramento's Downtown Plaza.
This week, former Facebook executive Chris Kelly and Sacramento developer Mark Friedman were named as new investors for the Sacramento bid, joining 24-Hour Fitness founder Mark Mastrov, Qualcomm CEO Paul Jacobs and Ranadive, who would be the NBA's first owner of Indian decent.
Burkle will still try to develop the land around the proposed new arena in Sacramento, but will no longer be involved in the potential purchase of the Kings or construction of the arena.
There will be an additional two days of meetings in New York early next week before the official April 18-19 BOG meeting.
After the committee meetings last week, NBA Commissioner David Stern said that a decision might not be made at the official BOG meeting, given the incredible complexity of both cities' bids. Each city has pledged to build a new arena for the Kings, which many believe will be the ultimate determining factor in the owners' decision.
A ¾ majority, or 23 of the league's 30 owners, are required to approve the sale of the team, meaning eight "no" votes would scuttle the deal. If the sale to the Hansen group is approved, a simple majority of the owners would be required to approve a move of the team to Seattle.
Both cities continued to clear the road on Friday toward getting their arena deals up and going.
Sacramento announced it was officially beginning the year-long environmental impact review as is usually required under the California Environmental Quality Act for major projects, including the proposed $447 million arena that would be built for the Kings on the city's current Downtown Plaza site. After that process is completed, any objections to the review would have to be expedited within 175 days of the completion of the review.
In Seattle, a judge dismissed a lawsuit that had been filed against the proposed $491 million arena that Hansen has proposed to build in the city's South of Downtown area. The lawsuit alleged that the arena violated the state's Initiative 91, which requires that any new arena deal be profitable for the city. The judge said that she could not rule on whether the proposed arena violated Initiative 91 until Seattle's own environmental impact study, which should be completed in November, was finalized.
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