New lead investor joins efforts to keep Kings in Sacramento
03/22/2013 12:00 AM
09/18/2013 12:13 PM
Sacramento's drive to keep the Kings took a dramatic detour Thursday as a new lead investor emerged for the team and the city missed its self-imposed deadline for wrapping up a deal for a new arena.
The dual developments, announced within minutes of each other during a chaotic afternoon, suggested that Sacramento was still laboring to finalize its plan to keep the Kings from moving to Seattle. Although city officials said they're confident they'll get a deal done on a new arena, there isn't a lot of time: The plan must get OK'd first by the City Council, and Sacramento has to pitch its proposal to a group of key NBA owners in less than two weeks.
Vivek Ranadive, an Indian-born software tycoon who lives in Silicon Valley, was unveiled as the man who will lead the bid for the team itself. Already a part owner of the Golden State Warriors, he takes the reins from East Bay health-club financier Mark Mastrov. A source familiar with the situation said Mastrov – whose initial bid was described as inadequate by the NBA – will remain a major partner in the bid.
The third investor in the Sacramento effort, Beverly Hills billionaire Ron Burkle, was continuing to negotiate a deal with city officials on a new arena at Downtown Plaza. But in a somewhat unsettling development for the city, officials were unable Thursday to complete the so-called term sheet outlining the city's subsidy and other elements of the deal. The document was supposed to be released to the public in the afternoon.
The item is still scheduled for a City Council vote next Tuesday. And even as negotiations continued Thursday evening, City Manager John Shirey plowed ahead with the first of three scheduled public forums at City Hall to discuss the arena project.
"I'm still optimistic that we're going to get the points resolved," Shirey said. "I do not have that feeling that we're not going to come together."
A spokesman for Burkle couldn't be reached for comment.
Time is running short for Sacramento. Shirey said his goal is to give the City Council as long as possible to analyze the term sheet before Tuesday's vote.
He conceded that if the negotiations aren't wrapped up soon, he might have to postpone the vote until April 2 – the night before Sacramento is supposed to go before the NBA owners' committee.
Shirey said an April 2 timetable "is not preferable" but it wouldn't be "the end of the world."
On April 3, a combined NBA relocation and finance-advisory committee is scheduled to hear presentations from Sacramento and Seattle. The full board of governors, consisting of all team owners, will make a final decision on the Kings' fate in mid-April.
Presenting the NBA with a credible arena plan is crucial to Sacramento's effort. Sports consultant Andy Dolich said Sacramento needs to iron all the uncertainties out of its arena package before going to the NBA.
"Anything that raises even minimal questions would be a negative," said Dolich, a former Memphis Grizzlies executive.
The city and Burkle's representatives have been talking for weeks about a roughly $400 million arena, with a public contribution approaching $250 million. To finance its share, the city would establish a nonprofit to borrow against revenues from the city's parking operations, as well as contribute some as-yet unidentified land.
While there's no agreement yet, Shirey revealed some of the likely arrangements with Burkle. To recoup the $9 million the city's general fund normally gets from parking each year, the city would rely on arena ticket surcharges and additional tax revenues generated by the building and surrounding development.
The city would own the arena but plans to lease it to the Kings for 35 years. Shirey added that Burkle is considering building a hotel nearby.
Kings supporters who attended the City Hall forum, where arena drawings were on display, were disappointed that there was no term sheet yet – but said they remained hopeful a deal would come together.
"A lot of people were waiting with bated breath, but the city manager's statement left me with confidence," said Alex Oestreicher, a member of the Crown Downtown grass-roots group. "We still have time to get it to a vote. Make sure you get it right."
About 150 people showed up for the forum. As is typical for these public meetings, supporters of an arena deal far outnumbered opponents.
One critic, James Cathcart of Sacramento Taxpayers Opposed to Pork, argued that the city was making "a speculative investment" without letting citizens vote on it.
"Let the public vote," he said. "If they say yes, I'm fine with that."
The participation of Ranadive (pronounced rah-nah-DEE-vay) was revealed two weeks after NBA Commissioner David Stern declared that Mastrov's initial bid for the Kings was too low. The Maloof family agreed to sell the 65 percent stake in the Kings that they control to Seattle investors for $341 million.
Ranadive's emergence appears to fortify the Sacramento bid.
"This could be good news, and strengthens (Sacramento's) position," Dolich said.
As someone who already owns a team, "he represents quality," Dolich said. "He's already been vetted."
In a post on Twitter Thursday, just before his Kings involvement was divulged, Ranadive made a reference to "my good friend" Ted Leonsis, owner of the Washington Wizards and a member of the NBA's powerful relocation committee.
Later, after his Kings bid was revealed, Ranadive tweeted that he is "excited to be a part of the revitalization of a great community and the globalization of an amazing franchise."
Mayor Kevin Johnson, who recruited the Mastrov-Burkle team to try to save the Kings, said in a prepared statement that Ranadive "takes an already strong ownership group to the next level."
Ranadive joined the Warriors' ownership in 2010, as part of a group that narrowly outbid Mastrov. He is vice chairman of the team, "the third guy in command," said Warriors spokesman Raymond Ridder.
Now a U.S. citizen, Ranadive is reportedly the first NBA team owner from India. The Warriors wouldn't disclose how much of the Warriors he owns. He would have to sell his share if his bid for the Kings succeeds.
A source said Mastrov had been talking to Ranadive for weeks about joining the effort. This source said Mastrov "will remain a very strong partner" and is "totally engaged" in the effort.
"Mark is the person who brought Vivek in," said the source.
The 55-year-old Ranadive is founder, chairman and chief executive of TIBCO Software, a $1 billion-a-year Palo Alto company. Its products are used in automation, data analysis and e-commerce, with clients such as Yahoo.
"In their space, they're one of the big players," said Rob Enderle, a Silicon Valley tech consultant. Revenue has jumped 58 percent in four years.
Ranadive's 8 percent share of the company is worth about $318 million; his total net worth isn't known.
An earlier company founded by Ranadive revolutionized finance by automating trading floors for the major markets.
Born in Mumbai, Ranadive reportedly came to America as a teenager with $50 in his pocket but was able to earn bachelor's and master's degrees from MIT in four years. A Harvard MBA followed.
He's written three books on business, including a New York Times best-seller. His latest, released in 2011, is called "The Two-Second Advantage" and is about the art of anticipating events. Publicity for the book includes a blurb from Stern. The NBA commissioner said the book "artfully explores how having the information can place you ahead of the game."
Ranadive also earned a bit of fame in a 2009 New Yorker magazine article about how he coached his daughter's undersized youth basketball team deep into a national tournament before losing. His strategy was playing full-court press defense, "all game, every game."
A glance at the new lead investor in the city's bid to keep the Kings in Sacramento.
55 years old
Founder, chairman and CEO, TIBCO Software Inc. in Palo Alto
Limited partner and vice chairman, Golden State Warriors.
Raised in Mumbai, India, moved to U.S. as teenager, attended MIT and Harvard. Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.
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