Would-be investor sues Sacramento Kings owners

Darius Anderson filed a lawsuit Monday against two of the Sacramento Kings’ lead investors after being denied a share of the club when it changed hands last year. In this 2013 photo, Anderson speaks for the investors of the new arena at a Sacramento City Council meeting.
Darius Anderson filed a lawsuit Monday against two of the Sacramento Kings’ lead investors after being denied a share of the club when it changed hands last year. In this 2013 photo, Anderson speaks for the investors of the new arena at a Sacramento City Council meeting. Sacramento Bee file

Sacramento lobbyist and developer Darius Anderson was instrumental in keeping the Sacramento Kings from leaving town – but was left off the final roster of owners when the team changed hands last year.

Now the power broker and longtime Democratic fundraiser is suing two of the team’s lead investors, Vivek Ranadive and Mark Mastrov, saying they reneged on pledges to let him invest in the team.

Anderson’s lawsuit comes as Ranadive and other Kings owners are dealing with the public-relations fallout from last week’s controversial decision to fire coach Michael Malone in his second year.

Filed Monday in San Mateo Superior Court, the Anderson suit against Ranadive and Mastrov demands unspecified monetary damages and an order establishing his “rightful share of the ownership of the Kings.” The lawsuit says their decision to exclude him from ownership was a betrayal of his trust.

“Mr. Anderson brings this lawsuit reluctantly, but when they shut him out of the venture, Mr. Anderson’s partners effectively took the fruits of years of his labor,” the lawsuit adds. Anderson “contributed his time and his money to the venture, but he has been deprived of his role as a partner, his equity share in the Kings and additional compensation.”

Kings spokeswoman Laura Braden called the suit disappointing and said Anderson has already made money from his effort. That occurred when Anderson and his partners sold Downtown Plaza, site of the new Kings arena, to the team last year for a $15 million profit.

“Mr. Anderson and his partners made a considerable profit on the final sale of ... Downtown Plaza,” Braden said in a text message. “This is a frivolous lawsuit seeking even more money, and we feel confident it’ll be dismissed in short order.”

Anderson teamed up with Southern California billionaire Ron Burkle, in 2011 and again in 2013, in efforts to buy the team and keep the Maloof family from relocating the franchise. But Burkle withdrew in April 2013 and Anderson was left without an ownership role when the Maloofs sold their controlling interest a few weeks later to a group of investors led by Ranadive and Mastrov. The deal valued the franchise at $534 million, an NBA record at the time.

The lobbyist first threatened litigation in October 2013, four months after the purchase. At the time, Mastrov said Burkle’s exit from the investor group cost Anderson a share of the team.

“He’s a Burkle guy, he’s not a Vivek guy, and Burkle didn’t get the team,” Mastrov told The Sacramento Bee then.

Mastrov also expressed surprise that Anderson would be considering a lawsuit. “Darius is my friend,” he said, adding that the two men talked often. “I don’t know what he could be ticked off about.”

In his lawsuit, Anderson said he worked tirelessly on the Kings project, lining up support from labor unions and speaking on behalf of the investors at a key City Council meeting in March 2013. At that meeting, the council tentatively approved more than $250 million in subsidies for a new arena.

Anderson said he was assured by Mastrov that he would be included in the ownership group.

“I’ve got your back, so no worries,” the lawsuit quotes Mastrov as telling Anderson in April 2013. “We’ll get it right.” The lawsuit also says Ranadive told Anderson, during a meeting at a Golden State Warriors game in Oakland, that he “would be taken care of.” Ranadive is a former part owner of the Warriors.

Anderson’s involvement in the Kings began in 2011, when the Maloofs were trying to move the team to Anaheim. Accompanied by Mayor Kevin Johnson, Anderson made a dramatic appearance at an NBA owners meeting in New York, saying he and Burkle would buy the team and keep it in Sacramento. Johnson also disclosed that corporate sponsors in Sacramento were willing to commit $10 million to the club.

The Maloofs publicly rejected the Burkle-Anderson offer, but the Sacramentans’ appearance in New York impressed the NBA. The Maloofs dropped the Anaheim idea and pledged to work with the city on a plan to build a new arena. Anderson said in his lawsuit that he helped raise $1 million of the $10 million committed by new sponsors.

In early 2013, after scuttling a plan for a new arena at the downtown railyard, the Maloofs made a deal to sell the Kings to investors in Seattle.

Anderson stepped in again. He and JMA Ventures had purchased Downtown Plaza for $21 million several months earlier, and he enlisted Burkle in a new effort to bid for the team. As part of the deal, the Burkle-Anderson group would build a new arena at Downtown Plaza.

According to his lawsuit, Anderson brought Mastrov into the fold. “Mr. Anderson knew and trusted Mr. Mastrov based on past dealings with him,” the lawsuit says.

Mastrov, founder of the 24 Hour Fitness chain, soon brought Ranadive into the mix. Ranadive, a technology entrepreneur from Palo Alto, eventually became lead investor.

As the effort gathered steam, NBA officials determined that Burkle would have to drop out because of a conflict of interest: The tycoon owned a sports agency that represented NBA players and other professional athletes.

Even with Burkle out of the picture, Anderson said he continued to work on the Kings project, talking to elected officials and others. His lawsuit said he asked Ranadive and Mastrov to make a written commitment including him in the team’s ownership. They said such a commitment would have to wait until they bought the team.

“Guys, let’s just win the deal and not get caught up in stuff – we are all partners in this and will make it a huge win,” the suit quotes Ranadive as saying.

The NBA vetoed the Seattle purchase in May 2013, and the Ranadive group bought the team from the Maloofs soon after. The group later bought Downtown Plaza from JMA and Anderson for $36 million, a profit of about $15 million. It isn’t known how much of that profit went to Anderson.

The suit was filed on Anderson’s behalf by two San Francisco lawyers, Daralyn Durie and Joshua Lerner. The lawyers and Anderson were unavailable for comment.

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

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