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  • ELAINE THOMPSON / Associated Press file, 2012

    Financier Chris Hansen heads a group that includes Microsoft's CEO and the Nordstrom family. Land for a new arena has been purchased, and a plan with $200 million in public financing is in place.

  • Gregory Payan

    KeyArena reportedly would serve as a temporary home if the Kings were to move to Seattle. Hedge-fund manager Chris Hansen has a tentative deal to build an arena if he can land a team.

Seattle group raises its bid for Kings

Published: Saturday, May. 11, 2013 - 12:00 am
Last Modified: Friday, Aug. 16, 2013 - 10:30 pm

In a dramatic, late-hour move, the group trying to buy the Sacramento Kings and move them to Seattle announced Friday it is increasing its bid for the franchise a second time - just days before the NBA is scheduled to vote on the team's future.

The group's latest bid would value the Kings at $625 million - on par with estimates placed on franchises in Dallas, Miami and Houston and $75 million above its previous offer from just four weeks ago.

The offer also values the Kings at $100 million above what is being offered by a local contingent seeking to purchase the franchise from the Maloof family and keep it in Sacramento. The offer immediately prompted questions of whether the Sacramento group will feel it must respond.

In a brief post on his website, the reclusive leader of the Seattle group, Bay Area hedge fund manager Chris Hansen, said the action demonstrates "the extent of our commitment to bring basketball back to Seattle."

The new offer precedes Wednesday's meeting of the NBA board of governors in Dallas, where the league's 30 league owners are scheduled to vote on Hansen's bid and his proposal to move the team to Seattle. A subcommittee of owners charged with examining relocation requests has already recommended against moving the team.

"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 wrote.

The move was expected by many NBA watchers after last week's subcommittee vote against Seattle. Still, the size of the bid increase came as a surprise.

Bill Sutton, a former NBA marketing vice president who is now a consultant in Tampa, said the move could change the landscape for Wednesday's NBA meeting in Dallas, and very well could prompt a response from Sacramento.

"I've said all along, if all things were equal, the team will stay in Sacramento," Sutton said. "But here is a clear-cut attempt to make sure things are not equal. Is Sacramento going to up its bid? Is there any more money in Sacramento?"

A spokesman for the Sacramento group, headed by Silicon Valley entrepreneur Vivek Ranadive, declined comment Friday.

Officials in Sacramento, however, appeared to have expected Hansen's new bid. Mayor Kevin Johnson released a statement just five minutes after the announcement was made, saying that he feels "very confident about the position we're in right now."

"The NBA leadership and owners have always said that their decision would not be dictated by a bidding war," the mayor said in an emailed statement Friday afternoon. "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."

Eric Rose, a spokesman for the Maloofs, said the family would have no comment on the deal. But a source close to the Hansen bid said Hansen and the Maloofs have discussed the increased offer, and the Maloofs have accepted it.

The Maloofs and their partner, Robert Hernreich, would pocket $406 million for their 65 percent controlling interest of the Kings in the new deal.

The Sacramento contingent has placed 50 percent of its $341 million offer for the Maloof share into an escrow account, a source close to the deal said. That's the amount Hansen had originally agreed to pay when he reached a deal with the Maloofs in January.

The NBA has urged Ranadive and his partners to place their full offer in an escrow account, a source said.

Ranadive and his partners have also agreed to work with the city of Sacramento on building a $448 million arena at Downtown Plaza. That project would include a subsidy that the city says amounts to $258 million.

Former NBA executive Sutton said the move by Hansen could increase pressure on the NBA to reconsider its statements that it will not consider expansion as an answer to the fight over the Kings.

"If you have somebody willing to pay that kind of money for a team, and there is going to be one (city) unhappy, you have to ask, is there another team to relocate, and, if not, you have to ask about expansion," he said. "It's a good problem."

Irwin Raij, a sports industry lawyer from New York who worked on Mayor Johnson's arena task force in 2009, said the new number from Hansen and his partner, Microsoft CEO Steve Ballmer, is so high that "it's hard to process."

But he added it remains uncertain whether the last-minute increase would cause the full board to reverse course from the relocation committee's recommendation against moving the team.

"It's possible, but I would be surprised if it impacts the recommendation of the relocation committee," he said.

The increased bid could increase the chance that the Maloofs or Hansen might take action against the NBA, should the league reject the sale and move. Raij acknowledged that is a question many will ask, but he said it is too early to speculate on whether there might be legal challenges to an NBA decision.

Sports law expert Michael McCann said the new bid "is not a stunning strategy, given Hansen's comments in recent weeks that he's going to do everything he can to buy this team."

Still, McCann said it remains unclear whether the NBA will vote on the latest bid - or on one of the two other offers Hansen has made for the Kings.

"With that said, if this increased offer is the one being voted on, the one where the team is worth $625 million, it's clearly a strategy by Hansen to put the NBA owners in a difficult position of turning down what is considerably more than the current Sacramento offer," McCann said.

"The NBA said they don't want a bidding war, but we all know a bidding war is in the best interest of the other owners financially."

In his statement on Friday, Hansen also one-upped the Sacramento group by guaranteeing that the team, if located in Seattle, would be among franchises that annually provide money for others as part of the NBA's revenue sharing program.

"In conjunction with our revised offer, we have also guaranteed to the NBA that the franchise would be a revenue sharing payer in all years in Seattle," Hansen said in a statement.

The Sacramento group recently told the NBA that it would voluntarily relinquish any rights to be an annual revenue-sharing receiver. But the group also reportedly stipulated that the team would not share revenue as part of the league's program.

Also on Friday, the Sacramento Taxpayers Opposed to Pork group said on its Facebook page it has raised "sufficient resources" to start a signature campaign toward a referendum on the Sacramento arena deal.

Call The Bee's Ryan Lillis, (916) 321-1085. Read his City Beat blog at Follow him on Twitter @ryan_lillis.

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