Posted Apr 29, 2013 6:39 PM
The NBA has all but officially decided to keep the Sacramento Kings in Sacramento.
In a unanimous vote of the league's combined Relocation and Finance committees Monday afternoon, 12 NBA owners recommended that the league's Board of Governors vote to deny the relocation of the Kings to Seattle — and, in doing so, deny the sale of the team from the Maloof Family to a Seattle-based group led by hedge fund manager Chris Hansen and Microsoft CEO Steve Ballmer.
The recommendation will be taken up by the full Board for a formal vote the week of May 13. But it is almost certain that the full Board will go along with the recommendation and vote to keep the Kings in Sacramento, at least for another year.
Relocating a team requires a majority, or 16 of the league's 30 teams to vote yes. As 12 teams have already voted no, that means the Seattle group would have to get 16 of the league's remaining 18 teams to vote yes, a near-impossibility. And once relocation is voted down, the sale of the team to Hansen's group would follow, for Hansen has consistently said he was only interested in buying the Kings if he could move them to Seattle.
"I've never been prouder of this city," Sacramento Mayor Kevin Johnson Tweeted Monday afternoon. "I thank the ownership group, city leaders, but most of all the BEST FANS IN THE NBA!!!"
While the Maloofs are not obligated to sell the Kings, they will now be under incredible pressure to do so, after Sacramento put together a group led by software magnate Vivek Ranadive, who would be the first majority NBA owner of Indian descent. Ranadive's group submitted a formal bid to the NBA earlier this month that NBA Commissioner David Stern said was comparable to the Seattle bid, and which the league considered binding.
It is not clear what steps the league could take if the Maloofs opt not to negotiate with the Ranadive group or sell to it. Stern reiterated earlier this month that the league does generally allow owners to sell to whomever they want, provided the new owners' finances are in place, even though the league decides whether teams will be allowed to move.
The league also knew that its owners' decision would rip the heart out of one city or the other. There was no solution that could make both happy.
"It's not exactly comparing two cities," a source with knowledge of the discussions said Monday. "It's been hard to leave a place that's been good to the NBA. Leaving a team, leaving a city, leaving a bunch of fans when they stepped up. That's what it is."
The decision caps an incredible comeback by the city of Sacramento, which looked doomed to lose its team after Hansen and the Maloofs announced in January they had reached a binding deal for the Maloofs to sell 65 percent of the team to Hansen, or $341 million, on a franchise valuation of $525 million. Hansen gave the Maloofs a non-refundable $30 million deposit as part of the agreement.
Ranadive's group, according to an April 17 letter from the Maloof Family to the league that was leaked to the media, agreed to match the $525 million valuation for the team, but wanted to give the Maloofs a $15 million non-refundable deposit instead of $30 million. The Maloofs claimed that entering into an agreement with the Sacramento group would constitute a breach of contract with the Hansen group and would reduce the family's leverage to negotiate in case the league vetoed the sale to the Hansen group.
Hansen had meticulously put together a plan over two years, purchasing land near Major League Baseball's Safeco Field on which he wanted to build a new arena for an NBA and National Hockey League team. He reached agreement with the city of Seattle for construction of a $491 building with up to $200 million in public funds.
But Sacramento, led by Johnson, came roaring back, putting together its own arena deal and ownership group, first led by supermarket mogul Ron Burkle and 24-Hour Fitness founder Mark Mastrov. But Burkle had to drop out of the team and arena plans after a conflict of interest with one of his businesses, which represents NBA players, was discovered.
Burkle was replaced by Ranadive, a minority owner of the Golden State Warriors, who quickly became the face of the Sacramento group. The city and the Ranadive Group reached agreement on construction of a $447 million arena, with Sacramento contributing $258 million toward the costs.
The Board of Governors postponed a final vote on whether to accept the Seattle or Sacramento plans when it met earlier this month, with NBA Commissioner David Stern citing the incredibly complex issues the league faced. Could it vote to leave a city whose fans had been incredibly loyal over the years, and who had reached agreement with the Maloofs last year on a new arena deal, only to see the family walk away?
On the other hand, Seattle had famously lost its team, which became the Oklahoma City Thunder, in 2008, and the NBA had lost a potentially dynamic market. The Hansen bid for the Kings wildly inflated the value of all other NBA teams, and the potential revenues from a regional sports network and other corporate dollars made Seattle an enticing city. In addition, Hansen's group went about its business quietly, as the NBA prefers.
In the end, the dozen owners went with the city that had put everything into its bid to keep the one professional sports team the city had. Johnson had cast the new arena deal as a catalyst for revitalizing Sacramento's downtown business corridor, with investors from throughout the state of California—not to mention the highly unusual commitment of a city in that state to provide public funding for an arena, something that hasn't happened in years—coming together.
What Hansen and Seattle do from here is unclear. Sources maintain that legal action against the league is a near impossibility, given that the NBA requires prospective owners to sign agreements that prohibit them from taking legal action if their bids are denied. A source with knowledge of Hansen's group's plans said Sunday that the group had never thought about taking any legal action if it lost.
There are frequently teams that are for sale for one reason or another, but those teams are no more likely to move than the Kings unless they don't have viable arena deals in their cities. Only a handful of teams are looking for a new building at present, most notably the Milwaukee Bucks. But the Bucks have told Stern that when their current lease at BMO Harris Bradley Center expires in 2017, they will have a plan that includes a new arena. Owner Herb Kohl, who is looking to sell the team, has said that he would put forward an unspecified amount of money toward a new arena.
Nor is expansion a realistic option for Seattle. There is next to no support among owners to add a 31st team to the league, which would cut into each team's share of Basketball Related Income, including the money each team stands to get from a new national television contract in the next couple of years.
Longtime NBA reporter and columnist David Aldridge is an analyst for TNT. You can e-mail him here and follow him on Twitter.
The views on this page do not necessarily reflect the views of the NBA, its clubs or Turner Broadcasting.
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