Posted May 11, 2013 9:54 PM
With Wednesday's Board of Governors vote on the fate of the Sacramento Kings looming, the Maloof family, which owns the team, is still trying to find a way to sell the team to a group led by Seattle hedge fund manager Chris Hansen instead of a local group in Sacramento led by software magnate Vivek Ranadive. Their latest gambit would sell 20 percent of the team to Hansen's group for $120 million, which would leave the team in the Maloofs' control, according to a source.
The $120 million figure for 20 percent of the team is based on a franchise valuation by Hansen's group of $600 million for the Kings.
Hansen's group has also agreed to pay an unprecedented relocation fee of $115 million to the league, or approximately $4 million per team, if the NBA's owners approve a new deal that would allow him to buy controlling interest in the team and move it to Seattle. That figure would dwarf the $30 million relocation fee that Oklahoma City paid to relocate the Seattle SuperSonics in 2008. The Maloofs would pay at least part of that relocation fee to the other 29 owners.
But approving the new deal would create even more questions and uncertainty in a saga that has changed at every turn, leaving fans in Sacramento and Seattle increasingly angry and weary.
If owners approved this secondary deal, they would be setting up a scenario where the Maloofs -- who have refused to deal with local business groups that wanted to buy the Kings -- will then have to seek season ticket and corporate sponsorship dollars from many of those very groups for next season in Sacramento, not to mention their trying to sell to a fan base that has grown alienated from them and wants them gone.
Of course, people in Sacramento believe that would be the point of the secondary sale -- to reduce fan support in Sacramento to nothing, and to wreck a plan approved by the City Council for a $490 million arena, thus making it easier for the Maloofs to ultimately engineer a sale for controlling interest to Hansen.
The new developments have led to the league's relocation and finance committees scheduling a conference call on Monday in advance of Wednesday's full Board of Governors meeting.
ESPN.com first reported the disclosure of the secondary sale plan Saturday.
The full Board is expected to take a final vote Wednesday on whether to approve relocating the Kings from Sacramento to Seattle. The relocation committee voted 7-0 April 29 to recommend rejecting the relocation of the team to Seattle, leaving many believing the Kings will remain in Sacramento and that the Maloofs' financial troubles would ultimately force them to sell to the Ranadive group. (A league spokesman said reports of an initial committee vote of 4-3 were false, and that the only vote taken was unanimous to reject relocation.)
Then, owners will be voting on one of what is now several proposed sales of the Kings to Hansen. It is not known whether they'll be voting on the initial deal, reached in January, where Hansen's group valued the team at $525 million and would pay $341 million for 65 percent control of the team, or the new valuation Hansen announced on Friday of $625 million, with his group paying a little more than $406 million for the 65 percent controlling interest.
The league wants the Kings to remain in Sacramento, having worked extensively with the Ranadive group, Mayor Kevin Johnson and local and regional business and political interests to put a deal together. The Ranadive group has a competing deal on the table based on the original franchise valuation of $525 million that Hansen and the Maloofs reached in January.
The Ranadive group has agreed to match the 65 percent price of $341 million for the Kings in that deal, and has put at least 50 percent of that $341 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 league was made aware of both sale proposals involving Hansen on Wednesday, according to a source.
Although there has been substantial buzz in Seattle that there are potential antitrust issues that could be the basis for a lawsuit against the NBA if Hansen is rejected, Hansen's group remains uninterested in legal remedies if it is rejected Wednesday, according to the source.
Hansen believes that this may be the last time in the foreseeable future that political and business interests in Seattle will be aligned to give support for an NBA bid. The city of Seattle has committed up to $200 million toward construction of a $490 million arena in the city's SoDo area, next to Safeco Field, where baseball's Mariners play. Hansen, who has already purchased the land on which he wants to build the arena, would pay the rest.
Sacramento has committed $250 million toward construction of a $447 million arena that would be the centerpiece of a development plan at the current Downtown Plaza mall site.
"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 a statement on his website Friday.
Sacramento Mayor Kevin Johnson said in his own statement Friday 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."
A vote for relocation requires 16 of the league's 30 owners to vote yes. Since seven owners have already voted no, the pro-Seattle group would have to convince 16 of the remaining 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, has pledged to the NBA that it will 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 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.
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