NBA reportedly asks Sacramento investors to compensate Seattle bidders
04/12/2013 12:00 AM
10/01/2014 2:18 PM
In another day of chaos and confusion over the Sacramento Kings, a respected sports publication said Thursday that the NBA is asking Sacramento's bidders to compensate Seattle investors if the team stays put.
Sports Business Daily, quoting an unnamed source, said the NBA wants Sacramento's investment group to compensate Seattle investor Chris Hansen for the $30 million nonrefundable deposit he already paid to the Maloof family.
The report came one day after a source told The Bee that the Maloofs have demanded a written purchase offer from the Sacramento investors as a backup to the purchase agreement they signed in January with Hansen.
The two developments, coming less than a week before the NBA is expected to decide the Kings' fate, underscore the fluid nature of a process that league Commissioner David Stern has called unprecedented.
Michael McCann, a legal expert at NBA TV, said the league may have asked Sacramento's investors to compensate Hansen out of fear he might sue the league for damages.
"If the NBA is going to, in effect, pick Sacramento over Seattle, it wants to do so in a way that eliminates any legal exposure," McCann said.
But he said the NBA's request wouldn't necessarily mean the league is leaning toward rejecting the Seattle offer.
A spokesman for Vivek Ranadive, leader of the Sacramento bid, declined comment. An NBA spokesman also declined comment.
The Maloofs agreed in January to sell their 65 percent share of the Kings to a group led by Hansen and Microsoft CEO Steve Ballmer, who have asked the NBA for permission to move the team to Seattle next season. The Seattle group would pay $341 million.
The NBA board of governors, meeting next Thursday and Friday in New York, is expected to decide whether to accept Hansen's bid. But the league is also weighing a counteroffer from Sacramento's investor group.
Details of Sacramento's bid remain murky. A source close to the situation said Wednesday that the Maloofs have received only a written "statement of interest" from Sacramento's investors to buy the team for considerably less than the Seattle offer. That overture was made in early March by Mark Mastrov, who was leading the Sacramento bid then.
This source said the Maloofs have told the Sacramento group, now led by Ranadive, to submit a written, binding purchase offer by 5 p.m. today. Otherwise, the Maloofs would refuse to sell the team to the Sacramento bidders even if the NBA rejects the Seattle purchase.
The Ranadive camp has declined to comment on the Maloofs' demand for a binding purchase contract. Mayor Kevin Johnson, who has spearheaded the effort to keep the team from leaving, said Wednesday that the Maloofs already know exactly how much Ranadive is offering.
While Johnson said he doesn't know if Ranadive has submitted a written document as demanded by the Maloofs, he said the Sacramento group is "abiding by the process" established by the NBA.
Asked about the NBA's request that Sacramento investors compensate Hansen for his $30 million deposit, a spokesman for the mayor referred a reporter to Johnson's comments from the night before. Johnson said then that Ranadive's offer is "better than competitive" with Seattle's.
Meanwhile, the bankruptcy trustee overseeing the sale of a 7 percent share of the Kings said he expects to get a formal offer today from businessman David Lucchetti. Lucchetti already owns 1 percent of the team.
Hansen has agreed to buy the share for $15 million. But trustee David Flemmer said Lucchetti has the right under his partnership agreement to buy the stake by matching Hansen's bid. The deadline for matching Hansen is today.
In another Kings-related development, attorneys threatening to sue the city over its financing plan for a new downtown sports arena are claiming that the public subsidy of the facility has been understated.
In a letter to City Manager John Shirey and the City Council, attorneys Patrick Soluri and Jeffrey Anderson wrote, "The total value of the City's financial contribution (to the arena) has not yet been disclosed."
City officials have said the public contribution to the $447 million project is $258 million, most of it from revenue bonds backed by downtown parking spaces and garages.
Soluri and Anderson said the $258 million figure doesn't include the value of 1,000 parking spaces at Downtown Plaza – site of the proposed arena – or of digital billboards being granted to the investors.
They also said the city's valuation of the land it would give to the private investors is too low. City officials said the land is worth $38 million, but Soluri and Anderson said "real estate experts" believe that estimate "significantly understates the value." The letter does not identify those experts.
Matthew Ruyak, an assistant city attorney, said the city would not comment on the letter because of the threat by Soluri and Anderson to sue.
Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.
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