Sacramento Kings are financial winners as final season tips off at old arena

Watch a time-lapse of Golden 1 Center’s construction

Watch a time-lapse video documenting construction of the Golden 1 Center, the home of the Sacramento Kings in downtown Sacramento, in 2015.
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Watch a time-lapse video documenting construction of the Golden 1 Center, the home of the Sacramento Kings in downtown Sacramento, in 2015.

Sleep Train Arena is sold out for Wednesday night’s Sacramento Kings season opener, the final year at the old barn. In other news, the Kings just added a chatroom feature to the team’s mobile apps, invested in a virtual reality company and brought in three security robots to patrol the arena.

These four seemingly unrelated developments speak to the state of the Kings one year before they’re scheduled to move into their new $507 million downtown palace, Golden 1 Center. While the team itself remains something of an enigma in NBA circles, with a winning season far from guaranteed, the business side of the organization appears to be operating on all cylinders, selling a slew of tickets while finding new ways to operate the arena and engage fans.

Sports marketing experts say the Kings’ business operations are far more savvy and aggressive since the group led by software tycoon Vivek Ranadive bought control of the team in 2013 from the Maloof family. True, fan enthusiasm is nothing new in Sacramento; the game against the Los Angeles Clippers will be the seventh straight home opener to sell out. But it’s also clear that the new ownership group has used enhanced technological and marketing know-how to take advantage of the NBA’s mushrooming popularity.

Fans’ dismay over last season, when popular coach Michael Malone was fired and a once-promising start turned into a ninth straight losing record, seems to have dissolved. Clearly the new arena is part of the attraction, as fans with season tickets this year will be better positioned to get good seats downtown.

$16Cheapest upper-bowl seat at Golden One Center

$12Cheapest upper-bowl seat at Sleep Train Arena

“Fans are excited; they’re excited about the development of the team; they’re increasingly excited about our move downtown,” said team president Chris Granger.

He said season ticket sales have improved over last year, and the Kings now have more than 10,000 season-ticket holders for the first time in at least seven years. More than 12,000 fans have put themselves on a waiting list for tickets at Golden 1, and practically all the premium seating at the new arena is spoken for, he said.

Revenue from other sources is up, including television. The team’s player payroll has increased. Ranadive, who introduced Bitcoin sales to the team in early 2014, remains fascinated with technology even though he no longer runs Tibco Software Inc. He and his fellow owners, many of them with technology backgrounds of their own, will continue to push the team into areas like virtual reality and social media to boost the Kings’ popularity.

“Look, you’re in a different place as far as the Kings are concerned,” said Lee Berke, a New York sports-media consultant. “The (new) arena is close to being finalized, the team’s been stabilized. ... It gives you the opportunity to try new things.”

On Tuesday, the Kings announced a partnership with San Francisco tech company Frankly Inc. to upgrade the team’s website and mobile apps with a chatroom, emojis of the players and coaches, and more. That came hours after the Kings said they’ve bought an ownership stake in Voke, a Santa Clara streaming-media company that provides virtual-reality viewing.

Voke is planning a demo project at the Clippers game. Fans at the arena, along with patients at Kaiser Permanente’s Women and Children’s Center in Roseville and some schoolchildren in Ranadive’s native Mumbai, India, will able to watch the game on headsets and iPads as if they’re sitting courtside with Ranadive.

Meanwhile, Ranadive posted a picture of himself on Twitter standing next to a robot called Knightman. The robot is one of three “automated data machines,” developed by a Mountain View company called Knightscope, that will patrol Sleep Train’s concourse relaying real-time video to the Kings’ security forces.

E.J. Narcise of Team Services LLC, a Maryland company that consults on arena naming-rights deals, said “it’s a much more creative and aggressive ownership group. ... The Maloofs, unfortunately, were involved in the turmoil of ‘are we selling, are we getting a new arena’ and they didn’t have a lot of time for anything else. The (new) owner isn’t at a loss for out-of-the-box concepts.”

The Kings don’t release financial results, but on paper at least the Ranadive group’s investment has been an unqualified success.

After convincing the NBA to squelch the Maloofs’ plans to sell the Kings to a group in Seattle, the Ranadive group bought controlling interest in 2013 in a deal that valued the franchise at $534 million. That was a record sale for an NBA team, but only briefly. Last year Steve Ballmer paid $2 billion to buy the Clippers. That, along with a huge new national TV contract, has elevated all NBA team valuations. Forbes magazine in January said the Kings are now worth an estimated $800 million, a 49 percent increase.

Yet Ranadive has done more than just ride the NBA wave. The Kings in 2014 signed a new regional broadcast agreement with Comcast SportsNet that pays a reported $35 million a year on average, more than triple the team’s old deal with Comcast.

The Kings’ arena naming-rights contract with Golden 1 Credit Union will give the team $6 million a year. While neither side has said how much mattress retailer Sleep Train pays for naming rights at the current arena, Sleep Train’s predecessor, Power Balance, was scheduled to pay between $975,000 and $2.4 million a year. Power Balance went bankrupt midway during the first year of its naming-rights deal.

The Kings’ financial ascendancy hasn’t been without controversy. The city is providing a $255 million arena subsidy that continues to rankle some Sacramentans.

Fans, however, remain loyal despite the team’s losing ways. While the Kings had just the 25th highest home attendance in the NBA last year, out of 30 teams, they sold 96 percent of their available tickets, according to ESPN. Granger said he expects attendance to be higher this year, and the team is likely to eclipse the 11 sellouts recorded last season.

The Kings were last in attendance in the NBA during the final year of the Maloof reign, with just 79 percent of tickets sold.

Fan support “waned for several years. It’s easier to get it back when you’ve had it than if you’ve never had it,” said Andy Dolich, a sports-marketing consultant in the Bay Area.

Strong ticket sales are expected to carry over to the new building, putting the Kings on an even firmer financial footing for the foreseeable future.

Granger said the team has sold all 34 luxury suites at Golden 1, plus all 48 lofts, which are minisuites with an opera-box feel. The 850 club seats, which take up rows 4 through 13 on the sidelines, are all gone. The only premium seats still for sale are fewer than 50 of the approximately 450 courtside seats, Granger said.

“The ability to take advantage of revenue coming out of a new building, and doing so at a time when television rights are exploding, puts them in a really enviable position,” said David Carter, a sports-marketing expert at the University of Southern California. “There’s a real renewed sense of energy about that club. ... From a turnstile standpoint, they should be in very good shape for the next few years.”

The team has raised prices somewhat at Golden 1. The cheapest upper-bowl seats will be $16, compared with $12 at Sleep Train. The cheapest lower-bowl seats will be $43, compared with $41 at Sleep Train.

Dale Kasler: 916-321-1066, @dakasler

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