Sacramento investors shooting to give NBA a finalized deal for Kings by May 15
05/01/2013 12:00 AM
10/01/2014 2:11 PM
Buoyed by a dramatic NBA vote this week in Sacramento's favor, Mayor Kevin Johnson said Tuesday the investor group aligned with Sacramento will push to put a finalized sales deal in front of the league's board of governors when it meets at midmonth.
"We hope to be in a position at that point where our ownership group gets approved," Johnson said. "That's our end game."
But a host of unanswered questions suggest the days leading up to the planned May 15 NBA board meeting could provide a few more wrenching twists for Sacramento and Seattle fans.
By all accounts, Sacramento wrestled the driver's seat away from competitor Seattle on Monday, thanks to an NBA committee vote recommending that the league reject a requested team move to Seattle this year.
Johnson said he and his team purchase group, headed by Silicon Valley entrepreneur Vivek Ranadive, think the path is now clear for them to negotiate a deal with the Maloof family, which wants to sell its majority stake in the team.
But the Seattle group, led by hedge fund manager Chris Hansen, has vowed to continue the fight and plans to take its case to the board of governors in two weeks.
And the Maloofs have refused to make any comment this week on whether they are willing to sell to the Sacramento group, whose bid they've repeatedly dismissed as inferior.
Unanswered questions have cropped up as well about the NBA's voting process. The owners' relocation committee on Monday voted 7-0 against relocation, but the finance committee was silent on the question of whether it supports or rejects the proposed sale to the Seattle group.
Under league rules, the finance committee retains the right to vote on its recommendation on the Seattle sale at some point before May 15, but no vote has been scheduled.
League officials declined Tuesday to say whether the board of governors would vote on a Sacramento deal if one jells by May 15, or simply vote that day on the Seattle deal.
Mike McCann, a sports-law expert and NBA TV contributor, said it's possible the NBA is avoiding turning Hansen down, possibly for legal reasons, and instead is hoping Hansen will back down himself.
"It may be difficult to justify turning him down as an owner," McCann said. "He's made a very competitive if not superior offer for the team."
Sources said this week that the Sacramento group has agreed to put 50 percent of the $341 million it's offering for the Maloofs' controlling interest in the team into an escrow account by Friday. The idea is to show that the group has the money to seal the deal, and convince the Maloofs that its bid is serious.
The full Sacramento bid is estimated at $341 million for 65 percent of the team controlled by the Maloofs and a partner, or $16 million less than the Seattle offer.
Should it gain control of the team, the Sacramento group plans to build a $448 million arena at Downtown Plaza. The City Council has conceptually approved a term sheet that would include $258 million in public funds and land, plus other deal sweeteners, to help build the arena.
While the Monday vote could be seen as an NBA invitation to the Seattle group to drop its efforts, Hansen said his group will try to convince the NBA the best deal is in Seattle.
In a website posting Monday night, Hansen wrote that his group has "clearly demonstrated that we have a much more solid arena plan, have offered a much higher price than the yet-to-be-finalized Sacramento group, and have placed all of the funds to close the transaction into escrow.
"As such, we plan to unequivocally state our case for both relocation and our plan to move forward with the transaction to the league and owners at the upcoming board of governors meeting."
Mayor Johnson would not address Hansen's remarks about the Sacramento arena plan or ownership group, but said he didn't blame Hansen for fighting.
"If I were them, I would keep fighting, too," the mayor said. "That's been our story the last three or four years. I don't look down or begrudge anybody who's fighting for something they desperately want."
Still, Johnson added, "I think the message out of New York (Monday) was very loud and very clear."
Monday's vote came as a shock to many in Seattle, but NBA watchers said the vote, in retrospect, was not that surprising.
"The league doesn't want to be seen as a fly-by-night operation," said league finance expert Larry Coon of the University of California, Irvine. "Sacramento is the incumbent, and the incumbent has the advantage" if it makes a good enough case for itself.
Several years ago, the NBA even stepped in to temporarily buy the small-market New Orleans Hornets – now the Pelicans – until the league could find a buyer willing to keep the team in town.
Though Monday's vote was unanimous, some experts say that may be more a case of the league putting up a solid front. Behind closed doors, experts said, feelings likely were mixed.
"It think it was a very, very close decision," said Bill Sutton, a former NBA marketing vice president, now a consultant in Tampa. "Sacramento dug down, got the right people involved, convinced the (NBA) these were the right people."
Sutton said Sacramento's three-decade track record as a solid NBA city made it easier for owners to vote against a move to a larger, wealthier city with a bigger TV market.
"You have to look at what the market meant to the NBA in the past," he said. "Great attendance records, great support."
McCann, the sports-law expert and NBA TV contributor, argued that Sacramento may have overtaken Seattle because elements of its offer are financially better than Seattle's, even though the overall team valuation is slightly lower – $550 million in the Seattle deal compared with $525 million in Sacramento's.
Sacramento is putting more public money into its arena, and that is attractive to a league that markets itself to cities as highly desirable, McCann said.
Secondly, as impressive as the Seattle ownership group is, Sacramento's investors are deep-pocketed, too, and add an international connection that is attractive to a league that wants to expand its presence overseas.
"I think a key turning point was (Vivek Ranadive) joining this group," McCann said. "His connections to India and the league's motivation to grow its product there. The NBA was very moved."
Much also has been made about the possibility that both the Seattle and Sacramento arena projects could be hit with environmental lawsuits that could slow them down.
McCann contends that issue is overblown.
"There's always going to be lawsuits and environmental issues," he said, but the NBA is convinced that the delays won't be outrageous in either city.
Call The Bee's Tony Bizjak, (916) 321-1059. Follow him on Twitter @tonybizjak.
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