Exactly three years ago Thursday, a pair of would-be purchasers from Seattle put what seemed like an absurd price tag on the Sacramento Kings: $525 million.
That turned out to be cheap.
The Kings are now worth $925 million, according to the latest annual valuations from Forbes magazine. That’s an increase of 16 percent from a year ago and nearly double the value that Seattle investors Chris Hansen and Steve Ballmer assigned to the team when they made a tentative deal with the Maloof family to acquire the franchise Jan. 21, 2013.
The run-up in the Kings’ valuation is a reflection of soaring NBA values in general. Even at $925 million, the Kings remain something of a bargain. Forbes said the average NBA team is worth $1.25 billion. The New York Knicks, at $3 billion, have overtaken the Los Angeles Lakers for the top spot.
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NBA owners scuttled Hansen and Ballmer’s plan to relocate the franchise to Seattle. The Maloofs then sold their controlling interest to a group led by Vivek Ranadive in a deal that valued the Kings at $534 million.
Team valuations have soared ever since, thanks in large part to a huge new national television contract signed by the league. Ballmer’s deal to buy the Los Angeles Clippers for $2 billion in 2014 also has played a huge role.
The Kings, though, have done more than just ride the wave. Just a few years ago, they were among the lowest ranked teams in the Forbes rankings; now, they’re in the middle of the pack – 18th out of 30.
Construction of their new downtown arena, Golden 1 Center – a condition of the NBA’s decision to keep the team in Sacramento – is surely contributing to the team’s increase in value. The $507 million arena, financed in part by a $255 million subsidy from the city, is scheduled to open in October. The Kings also negotiated a far more lucrative regional TV deal with Comcast SportsNet in 2014, more than tripling their annual revenue.
Forbes said the Kings earned an operating profit last year of $4.2 million on total revenue of $141 million.