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Stern: Sacramento still has a shot to keep Kings, but Seattle is 'strong'

02/16/2013 5:10 PM

10/02/2014 12:14 PM

HOUSTON – The NBA wants to bring a team back to Seattle but is eagerly waiting to hear Sacramento explain why the Kings shouldn't move there. Seattle's proposal to lure the Kings is "quite strong" – but it's certainly possible the NBA board of governors could reject it and keep the team in place.

NBA Commissioner David Stern played it right down the middle Saturday in his annual news conference on the eve of today's All-Star Game at Houston's Toyota Center, where reporters from Sacramento and Seattle peppered him with questions about whether the Kings were likely to stay in Sacramento or pack up for the Pacific Northwest.

In his most extensive comments to date about the tug of war between the two cities, the commissioner promised only that the board of governors, consisting of team owners, will make a decision in New York on April 19.

He said he has no idea how the owners will rule. "I think the owners are going to have a tough issue to decide," he said.

One thing Stern said is for sure: There's no way both Sacramento and Seattle will be happy with the ruling.

Even as Sacramento Mayor Kevin Johnson tried to persuade NBA owners in Houston to keep the team in Sacramento, Stern noted that the league is still waiting on Johnson to unveil the counteroffer he is assembling for the Kings.

Johnson has vowed to bring a competitive purchase offer, complete with a package for a new arena, to the NBA by March 1, and has been in Houston since early Friday lobbying owners.

In the meantime, the Maloofs, who own the Kings, have agreed to sell their controlling interest to a wealthy Seattle group that values the franchise at $525 million.

Stern described the Seattle team, which includes hedge fund manager Chris Hansen and Microsoft CEO Steve Ballmer, as "quite strong" and "well financed."

"I'd like to see the NBA go back there," he said of Seattle. The league left Seattle in 2008 when the SuperSonics – lacking a deal for a new arena – bolted for Oklahoma City and became the Thunder.

Still, if Sacramento brings an offer that's as strong as the Hansen-Ballmer group's, Stern said the owners could well reject the Seattle proposal.

"Certainly it's plausible to me, but I don't have a vote," he said, adding, "I expect that the owners have a very open mind on this."

Johnson, speaking to reporters about a half-hour after Stern's news conference, said he thinks he has impressed NBA team owners with Sacramento's value to the league and the quality of the bid he's going to submit. He hasn't publicly identified his investor team, but it's well-known that billionaire Ron Burkle and Bay Area financier Mark Mastrov are assembling a bid for the team and working on an arena plan.

The mayor said the arena plan tentatively approved by the City Council last spring – including a $255 million public subsidy – gives Sacramento a "competitive advantage" over Seattle.

Seattle city and King County officials tentatively approved a plan last fall, including a $200 million public subsidy, but Johnson said Sacramento's plan – personally negotiated by Stern – is stronger.

"The NBA has approved this already," Johnson said of Sacramento's arena blueprint, which contemplated the city wringing money from future city parking revenues. "Those are facts you can't dispute."

The Seattle deal does face some obstacles, notably legal challenges on two fronts – an environmental claim filed by the longshoremen's union and a taxpayer challenge over the funding plan.

"We in our community don't have lawsuits coming at us," Johnson said.

Sacramento's arena plan has not been nailed down, however. It is true that Stern personally negotiated last spring's arena plan, even committing $7 million in equity funding from the league. But that deal died when the Maloofs abandoned it.

The council vote on the previous plan was based on an arena to be owned by the city, on city land in the railyard. The council has not faced the question of whether it would be willing to commit those funds for an arena that could be privately owned at the Downtown Plaza site now under discussion. The Burkle group has not yet said whether it would want to own the arena itself.

Moreover, the city would have to undergo an environmental review for a Downtown Plaza arena, similar to the one being challenged in court in Seattle. Putting the arena at Downtown Plaza also could remove a sizable chunk of parking spaces that the city was counting on for revenue to finance the facility.

Some members of the City Council have been unwilling to commit to a new financing plan until they see the details of Johnson's pitch.

"Until I see the details of the financials and the proposal, I'm not committing to anything," Councilman Darrell Fong said Saturday.

Johnson acknowledged that at some point, the City Council would likely have to vote again on the financing plan. But he insisted Saturday that even if some of the parameters change, the city's piece of the financing puzzle would remain the same and the potential buyers for the Kings would commit the private capital needed to make the building a reality.

He said one owner told him this weekend: "I didn't realize you guys were that far ahead."

The mayor said he's spent much of his time talking up Sacramento as an NBA city, reminding owners of the 19 seasons of sellouts. The team's attendance this year ranks at the bottom of the league as the team has struggled on the court and fans have become increasingly turned off by the Maloofs' push to leave.

"I'm reminding them of how great the Sacramento market has been," he said.

He added that he thinks many owners are predisposed to keep the team in Sacramento because they don't want to see franchises relocate.

Stern, presiding over his 37th and final All-Star Game before his retirement, said most NBA owners don't want to add an expansion team – a solution that would let both Sacramento and Seattle have teams. He said the owners believe expansion dilutes revenue from broadcasting, licensing and other sources.

"I don't see any scenario where both cities are happy," he said.

Stern did seem to throw cold water on the possibility that the Kings' limited partners – whose 35 percent interest isn't included in the Seattle deal – have the legal right to match the Seattle offer. Stern said, "I just don't feel it as a defining issue here."

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About This Blog

Ryan Lillis has covered the city of Sacramento, its 108 neighborhoods and its politicians since 2008. Prior to that, he covered crime at The Sacramento Bee. A native of upstate New York, Lillis has a journalism degree from the University of California, Berkeley.

Contact reporter Ryan Lillis at rlillis@sacbee.com or 916-321-1085. Twitter: @Ryan_Lillis.
 

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