Sacramento Mayor Kevin Johnson tells the story of how the city kept the Kings
06/15/2013 12:00 AM
10/08/2014 10:44 AM
It looked like Mayor Kevin Johnson's three-year campaign to save the Sacramento Kings was ending in defeat. Even the man running the NBA thought so.
But the mayor was cooking up a counteroffensive. Long before the news broke Jan. 9 that the Maloof family was negotiating to sell the team to investors from Seattle, Johnson was gathering intelligence from NBA insiders and consulting with advisers.
"I called in everybody I knew to help," Johnson said. "I couldn't let the cement harden in Seattle."
Once it was obvious the Maloofs were selling to Seattle, a strategy that had been percolating for months went into overdrive – and succeeded to a degree that seemed unimaginable six months ago.
Not only did small-market Sacramento snatch the Kings back from bigger, wealthier Seattle, it rid itself of the unpopular Maloofs and set the stage for an overhaul of its tired downtown.
The Kings are now controlled by software tycoon Vivek Ranadive and 10 partners. With help from the city, Ranadive plans to build a $448 million arena at Downtown Plaza and redevelop the rest of the ailing mall for a total investment that could surpass $1 billion.
Speaking in City Hall's fifth floor mayoral library this week, Johnson recounted some of the behind-the-scenes action in his effort to keep the team. Succeeding, he said, was one of the highlights of his life.
"I didn't win a championship on the court," said the former Phoenix Suns star. "This is Sacramento winning a championship."
He marveled at how big the drama became. During an event at the White House recently, he said President Barack Obama took him aside and congratulated him.
It wasn't easy. Time was short once the sale became public. Seattle's bid for the team was higher than expected, and Sacramento would have to endure setbacks like the loss of a key investor.
But Johnson had a key ally: NBA Commissioner David Stern.
Stern had a soft spot for Sacramento, a thriving NBA market a decade ago. In 2011, the commissioner persuaded the Maloofs to drop their plan to move the Kings to Anaheim. In 2012, he finalized a deal for a new arena at the downtown railyard – which the Maloofs later abandoned.
Johnson sidestepped questions about how much help Stern provided over the past six months. Stern said it was the NBA team owners who chose Sacramento over Seattle.
But Chris Lehane, one of the mayor's advisers, said the close alliance between the two men paid dividends.
"There was a genuine relationship, a friendship between the mayor and the commissioner," he said.
Back in January, Stern thought the Kings would move, he told The Bee. Nonetheless, he and other NBA officials set out benchmarks Sacramento had to meet to keep the team: Prove its viability as an NBA market, craft another arena plan and match Seattle investors Chris Hansen and Steve Ballmer's offer for the Kings.
"He said, 'If you guys do X, Y and Z, you will be in a very strong position to keep this team,' " Lehane said.
After the railyard arena deal collapsed last spring, Johnson heard talk for months that the Maloofs would try to sell or relocate: Las Vegas, Vancouver, Seattle, Anaheim again. There were well-publicized negotiations with Virginia Beach, Va.
"I'm calling everybody I know – owners, Stern, other people," Johnson said. "I knew it was happening at some point."
'Jaw-dropping' price tag
When the news finally came, Johnson saw it as an opportunity. After chasing rumors for months, he knew what he was up against.
"I was feeling like once I knew they were willing to sell, and we knew the price, we had a shot," Johnson said.
City Manager John Shirey said Sacramento had a leg up: the basic outline of an arena financing plan, left over from 2012.
The city also had an investor, Beverly Hills billionaire Ron Burkle. Burkle owned hockey's Pittsburgh Penguins and had tried to buy the Kings before. He and businessman Darius Anderson were already mulling a plan to build an arena at Downtown Plaza.
Burkle "was a good place to start," Johnson said.
One problem: The Maloofs' deal with Seattle valued the team at $525 million – much higher than the $450 million or so people were expecting.
It was "a jaw-dropping number," Johnson said.
Burkle had told Johnson he wouldn't overpay for the Kings. Clearly, Sacramento needed more investors.
It turned out, there was no shortage. Mark Mastrov, founder of the 24 Hour Fitness chain, had spoken with Kings co-owner George Maloof over the summer, and he announced in January he was ready to make a bid.
An even bigger fish was lurking: Mastrov's friend Ranadive, chief executive of Tibco Software of Palo Alto and a minority owner of the Golden State Warriors.
Ranadive's role wasn't made public until late March, yet the diminutive executive was anything but silent in a Feb. 8 meeting in Sacramento with city officials, Mastrov and two Burkle representatives. Assistant City Manager John Dangberg said he was startled by Ranadive's eloquent vision of using the Kings "to build something bigger and greater" in Sacramento.
But even as an ownership group was forming, the city was losing the public relations battle. That became clear when Johnson flew to Houston in mid-February to lobby owners at the All-Star Game.
Most of the owners had bought into the national media's version of events: The team was going to Seattle.
"The national narrative is what everybody believed," Johnson said.
He asked owners to keep an open mind, and left Houston confident he'd made progress. In his mind, he had shaved a 25-point deficit to 18.
A 'propaganda machine'
Back home, his strategists were trying to change the conventional wisdom by making the mayor and the prospective Kings investors available to national reporters for interviews. City Hall insiders helped plan former sports-talk radio personality "Carmichael Dave" Weiglein's RV tour of NBA cities, designed to drum up publicity for Sacramento.
"I was on the phone with these guys daily," Weiglein said. "This was a coordinated, well-oiled propaganda machine."
The machine appeared to sputter March 8. It was one week after Mastrov and Burkle sent the NBA their counteroffer for the Kings.
Speaking before a Warriors game in Oakland, Stern declared the bid was inadequate. He wouldn't go into details, but later told The Bee the bid was $495 million – $30 million shy of Seattle's.
A source close to the Sacramento group said the low bid was partly strategic. If Sacramento immediately matched Seattle's price, Hansen and Ballmer might raise their offer and trigger a costly bidding war.
Johnson confidently predicted the investors would shore up their bid. And before long, the group added a reinforcement: Ranadive was in, and he was the lead partner.
His role proved crucial. Unlike Burkle or Mastrov, he was already a member of the clannish world of the NBA through the Warriors. "You look at the folks who tend to win these bids, they tend to have a relationship with the league," Lehane said.
Ranadive took his time joining the fight. He was reluctant about leaving the Warriors. But when he saw "he could be the difference that's the point where he stepped up," said Ranadive adviser Adam Mendelsohn.
On March 26, the night the City Council approved funding for the new arena, Ranadive called Johnson. His words assured Johnson once and for all that Sacramento would match Seattle's $525 million.
"I make you a personal promise," Johnson recalled that Ranadive said. "We will pay and do whatever it takes to keep the team in Sacramento."
A week later, Ranadive and Mastrov walked past a mob of reporters and headed into the exclusive St. Regis hotel in Manhattan. Along with Johnson, Burkle, state Senate President Pro Tem Darrell Steinberg and others, they were about to make their case to the NBA's relocation and finance committees. Seattle had just finished its presentation.
Once inside, the Sacramento group couldn't believe its good fortune. Based on the questions from the committees, it appeared the Seattle delegation had blundered.
According to Lehane, the Seattle group made false and easily refutable claims about Sacramento. The most blatant: Sacramento's investors didn't control the land they needed to build an arena.
"We all sort of looked at each other like, is this a trick question?" Lehane said. "It was an enormous mistake." The miscue let Sacramento bolster its credibility.
The day wasn't a total triumph. Burkle learned from the NBA that he would have to choose between the Kings and his ownership of a sports agency that represented NBA players. A week later, Burkle pulled out of the Kings group, although he might help with real estate development.
A 'favorite son'
Losing Burkle wasn't a disaster, though. New investors took his place, including Sacramento developer Mark Friedman and the Jacobs family of San Diego, founders of telecom giant Qualcomm.
The climax came May 15, when the NBA board of governors convened in a Dallas hotel for a special meeting to decide the Kings' future.
Sacramento had reason to be confident: The relocation committee voted 7-0 in late April against Seattle. Hansen and Ballmer's response – raising their bid, twice, to a total valuation of $625 million – was gaining zero traction.
But the Maloofs had still not agreed to sell to the Sacramento group. As the owners drifted into the Hilton Anatole, Stern played mediator, meeting with George Maloof in a semiprivate alcove off the main lobby. The commissioner brought up the likelihood that the Seattle deal would die that afternoon.
"I was seeking to know what he expected would happen if in fact the (board) voted to stay in Sacramento," Stern recalled.
After weeks of putting out mixed signals, Maloof gave Stern the answer: They would sell the team if Ranadive put a little more money in.
Stern agreed to pass along the message. By nightfall, the Maloofs and Ranadive had informally settled on a $535 million valuation, a $10 million increase. The deal remained secret for 24 hours.
First, though, the NBA had to decide on Seattle's bid. Both cities made final presentations to the owners, who were meeting in a 3,000-square-foot ballroom.
When it was Sacramento's turn to go in, Friedman couldn't help but gape: 80 people seated around a giant table, power brokers like the Brooklyn Nets' billionaire owner Mikhail Prokhorov.
Friedman could barely read Stern's face at the far end of the table. What was clear, though, was Johnson's command of the room.
"He's a favorite son," the developer said. "There was banter between the commissioner and the mayor."
Johnson said the meeting was "high pressure" but nothing compared to guarding Michael Jordan. "This was what I was meant to do. This is why I ran for mayor, for moments like this," he said.
After the Sacramento contingent left, the owners debated and finally voted. A roll call was taken, alphabetically by city. Sacramento won, 22-8.
Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.
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