By selling their controlling interest in the Sacramento Kings for $340 million, the Maloofs today triggered a lengthy review process by the NBA that puts the onus on Sacramento officials to come up with a counter offer to keep the team in town.
This morning, the Maloof family announced that it had signed a binding agreement to sell the team to a Seattle investment group led by hedge fund manager Chris Hansen. In a brief statement, the Kings owners expressed appreciation for Sacramento fans, but offered no details on the proposed move to Seattle.
"We have always appreciated and treasured our ownership of the Kings and have had a great admiration for the fans and our team members," Gavin Maloof said in a prepared statement. "We would also like to thank Chris Hansen for his professionalism during our negotiation. Chris will be a great steward for the franchise."
Sacramento Mayor Kevin Johnson had not commented on the news as of mid-morning. He has been working to assemble a rival ownership group that could buy the team and keep it here.
Late Sunday night, the mayor tweeted that the "deal is NOT done. Sac can still present an offer."
A source with knowledge of the deal said the Maloofs and partner Bob Hernreich sold their joint 65 percent stake in the team, and that the deal was based on total value of $525 million -- a record in the NBA. That implies the Seattle group is paying around $340 million.
The remaining 35 percent of the team, owned by four entities, has not changed hands.
The league confirmed it has received sale documents, and will now launch a process of vetting the sale.
"The NBA received an executed Purchase and Sale Agreement for the transfer of a controlling interest in the Sacramento Kings from the Maloof family to an investor group led by Christopher Hansen," the NBA said in a statement. "The proposed transaction is subject to the approval of the NBA Board of Governors and has been referred to the Board's committee process for review."
The league's advisory and finance committee will review the deal, and will vet the Seattle group, then will issue a recommendation to the league owner's group, the Board of Governors, for their vote. League officials declined comment on the timing, but a source said the process could take several months.
The deal would move the team to Seattle next season.
Hansen released his own statement about a half hour after the Maloofs, saying, "We are happy to announce that we have entered into a binding agreement with the Maloofs to purchase a controlling interest in the Sacramento Kings NBA franchise." He too wouldn't release financial details but noted the purchase "is obviously subject to approval by the NBA Board of Governors."
The deal includes a stipulation, sources told the Bee, that the Hansen group will pay the Maloofs $30 million if Hansen backs out of the deal, or if the NBA rejects the deal.
Johnson still has his card to play. The mayor expects to unveil his own counter-offer, complete with a financing package for a badly needed new arena.
With the public encouragement of NBA Commissioner David Stern, he expects to present his proposal to the NBA Board of Governors in New York in April, where a dramatic showdown with the Maloofs and Hansen's group looms.
Stern personally negotiated the downtown arena deal that was abandoned by the Maloofs last spring and was angry when they rejected the plan.
But Michael McCann, a sports-law expert at the University of New Hampshire, said this morning's announcement creates a sense of momentum for Seattle that will prove difficult for Sacramento to block.
"I don't think it's a slam dunk but I'd say the odds are highly in favor of the move," McCann said.
He said the NBA will start poring over Hansen's financial documents "almost immediately," which means the mayor will have to move quickly to get his proposal in place.
Johnson himself has said there's no guarantee the NBA would side with him against Seattle. Yahoo Sports, quoting anonymous sources, reported late Sunday that the relocation committee is expected to endorse the Seattle deal to the Board of Governors, which consists of all league owners.
The chair of the relocation committee is Clay Bennett - who moved the SuperSonics from Seattle to Oklahoma City in 2008.
Still, McCann and others said Johnson has a shot at keeping the team in Sacramento.
"I think the mayor is working extremely hard to make that happen," said John Kehriotis, a 12 percent owner of the Kings. "I think you should have faith in him." The Hansen deal doesn't include the shares held by Kehriotis and other limited partners.
Among the possible "local" bidders are Bay Area investor Mark Mastrov and supermarket tycoon Ron Burkle, who tried to buy the Kings in 2011.
The Maloofs acquired a controlling interest in the Kings in 1999 and were wildly successful for their first few years in Sacramento. As the team's fortunes crumbled and the family's finances withered, the Maloofs vowed never to sell the franchise - remembering with regret the fact that they'd sold the Houston Rockets in 1982 after their father died.
Still, the Maloofs have held significant discussions with at least two cities trying to lure the team - Anaheim in 2011 and Virginia Beach, Va., up until earlier this month. The day after the Maloofs ended their discussions with Virginia Beach, a source close to the family said the Maloofs were in talks with Hansen's group.
Hansen, a successful hedge fund manager backed by Microsoft billionaire Steve Ballmer, has longed to return the NBA to Seattle. Hansen intends to rebrand the Kings as the Sonics.
If the Maloofs do succeed in getting the NBA to approve the sale, Sacramento officials say someone will have to immediately pay off a city loan that now totals $77 million, including prepayment penalties.