Posted May 10, 2013 6:41 PM
The tug-of-war between the cities of Seattle and Sacramento for the Kings continued Friday when Seattle hedge fund manager Chris Hansen announced he had again raised his valuation of the franchise, this time to $625 million, an increase of $75 million from his previous valuation of the team.
The increased valuation would mean that Hansen's group would now pay the team's current owners, the Maloof family, $406.25 million for 65 percent controlling interest of the club, per the terms of the sale the groups completed in January.
In addition, Hansen said that his group has pledged to the NBA that it would guarantee it would be a revenue sharing payer every year the Kings were in Seattle.
Hansen made the announcements on his website dedicated to his group's pursuit of the Kings.
"While we appreciate that this is a very difficult decision for the league and owners, we hope it is understood that we really believe the time is now to bring the NBA back to Seattle, and that it is paramount that we do everything we can to put Seattle's best foot forward in this process," Hansen said in the statement.
Sacramento Mayor Kevin Johnson said in a statement that his city remains confident it will retain the Kings.
"The NBA leadership and owners have always said that their decision would not be dictated by a bidding war," Johnson said in the statement. "This was always about whether Sacramento, a community that has supported the NBA for 28 years, can put together a plan and organization to ensure the franchise can rebuild and thrive. The ownership group, the city, and the community have shown the NBA, without any shred of doubt, that the Sacramento Kings belong in Sacramento."
The announcement came five days before the NBA's Board of Governors will meet in Dallas for a final vote on whether to approve the sale of the Kings from the Maloof family to the group led by Hansen and Microsoft CEO Steve Ballmer, or reject the sale and potential move of the team, which would almost certainly leave the Maloofs no option but to sell the team to a Sacramento-based group led by software magnate Vivek Ranadive, who pledges to keep the Kings in Sacramento and has worked out a deal for a new $447 million arena there to replace the team's current home, Sleep Train Arena.
Hansen's group has pledged to build a $490 million arena in Seattle for the Kings. Both cities have pledged public funding to help build the respective arenas.
Despite Hansen's announcements, Sacramento is viewed to be in the driver's seat to keep the team after the league's relocation committee voted 7-0 April 29 to reject the team's move to Seattle. A vote for relocation requires 16 of the league's 30 owners to vote yes, meaning the pro-Seattle group would have to convince 16 of the league's other 23 owners to approve the move.
Even if that happened, the league would still have to approve the sale of the Kings to Hansen. That would require three-fourths of the teams, or at least 23 owners, to vote yes.
A source close to the Sacramento group said Friday that it was buoyed by Twitter comments made this week by Miami Heat owner Micky Arison, a member of the relocation committee, to a Seattle fan who had questioned why the league turned down the relocation the NBA was treating Seattle fairly.
In those comments, Arison said the issue before the committee and league was not what Seattle was doing to make itself a viable NBA market again, but what Sacramento had done to prove it was still one. Arison, according to the transcript provided by a Seattle radio station, said that Sacramento had passed that test.
"This has always been about Sacramento proving to the NBA that the Kings belong here," the source said. "It wasn't about proving Seattle doesn't deserve a team; it was about showing the strength of this market. And that has been demonstrably proven."
Ranadive's group, which includes 24-Hour Fitness founder Mark Mastrov and the Jacobs Family, billionaire owners and managers of the Qualcomm company, agreed to match the original valuation for the Kings that Hansen's group made--$525 million, or $341 million for 65 percent of the team—and has put half of that $341 million, or $170.5 million, into escrow. NBA Commissioner David Stern said last month that while the Sacramento bid to keep the Kings at the time was slightly lower than the Seattle bid, the league considered the Sacramento bid binding.
The Sacramento Bee reported this week that the NBA has encouraged the Ranadive group to put the remaining half of the $341 million into escrow as well to alleviate concerns of the Maloofs that the group has the financial wherewithal to complete the transaction.
Ranadive's group has also pledged to the league that it would not be a revenue sharing recipient if the Kings remain in Sacramento, citing the expected increased revenues the team will be able to get from a new building. The proposed arena is part of a larger deal in the city's downtown area that local political and business officials believe will be a catalyst for regional development.
The source close to the Ranadive group would not comment Friday when asked if it would put the additional $170.5 million into escrow before next Wednesday's meeting.
Hansen had previously increased his valuation from $525 million to $550 million, meaning his group would pay approximately $357 million for the 65 percent stake in the team. The Seattle group, according to sources, has already put the entire $357 million into escrow.
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