It has been a whirlwind of a week for Kings fans and the Sacramento Kings relocation story in general.
We reported first in this saga that ‘Kings to Seattle’ was not a done deal, as sources close to negotiations told us there were many hurdles for the deal to clear, and that Sacramento had multiple, qualified buyers that could either meet or beat Chris Hansen’s offer.
This has played out over the last 24 hours as multiple buyer groups have stepped up in Sacramento to buy the Kings, including a group that is connected to Ron Burkle.
In terms of the math and money, as we reported in September the reason Sacramento has a shot against top-tier owner prospects such as Seattle’s Hansen and billionaire deluxe Steve Ballmer is that they don’t have to pay as much for the team.
Anybody moving the team will have to account for at least $100 million in unpaid loans to Sacramento (~$75 million) and relocation fees (~$30 million), and this is a very low estimate. That number increases as you account for moving costs, and the fact that the relocation fee could be more than $30 million. We’re reporting that this number could go as high as $300 million if the league really wants to flex its muscles in getting what it wants.
Our report Thursday estimated a $425-450 million price tag for Sacramento to hit in order to start outperforming Seattle’s offer. Sam Amick of USA Today was able to confirm with Sacramento mayor Kevin Johnson at his charity event that this was indeed the city’s initial target, and also that the mayor would be approaching David Stern to speak at the NBA’s Board of Governors meeting.
In a moment of levity at that charity event, attendee LeBron James was asked by Johnson if he could buy the Kings and keep them in Sacramento and he responded with, “get me my check book.”
LeBron isn’t going to have to reach far because Sacramento buyers have been making themselves known over the past 24 hours. Mark Mastrov, former CEO of 24 Hour Fitness and San Francisco investment firm JMA Ventures have thrown their hats in the ring.
JMA Ventures is proposing to buy the team and build a $400 million downtown arena where a downtown mall they recently purchased currently sits. CBS 13’s Steve Large reports that group includes Darius Anderson, who is the same man that connected mayor Johnson to Ron Burkle.
According to sources there are more interested buyers being filtered through the process, too. The Sacramento market is all-but rubber stamped with $200 million or more of public investment toward a new arena and has an extreme level of fan support. Being the No. 20 television market doesn’t hurt, but having no other sports teams to compete with is what puts it in the same category as a larger market like Seattle, which has the Seahawks, Mariners, and Sounders to steal entertainment dollars.
In Sacramento, all they have is the Kings.
Assuming Hansen and his group don’t want to start acting like the drunk guy at an auction, then the NBA is going to be choosing between two similar offers. The owners in Sacramento might not be Ballmer-rich, but Burkle was good enough to drop David Stern’s jaw and Mastrov finished second to Joe Lacob’s group in Golden State, ahead of Larry Ellison.
The NBA isn’t picking between steak and chopped liver, here.
But if for some reason they don’t let California’s capitol city have a shot here, and they allow the team to be moved to Seattle, then the NBA will be the ones left holding the Sacramento’s beating heart after the Maloofs rip it out of their convulsing chest.
Charles Barkley said it best on TNT:
We’ve reported the NBA’s billion dollar subsidy issue here for nearly two years now, as the league and its players have received over $3 billion in public funds for arenas since 1990.
This happens because the league and its owners pit cities against one another with threats of relocation if a city doesn’t pay up for an arena, but in the case of Sacramento they did everything they could and then some according to multiple league sources.
One league source with intimate knowledge of the situation called it “a model offer of public funds.”
The league is walking dangerously close to the line in which people get fed up and they start to lose those subsidies they love dearly. In Seattle, yes their own politicians screwed up and were culpable in the matter, but the league’s underhandedness and heartlessness was brought to life in the documentary Sonicsgate. It’s not pretty.
But unlike that story that was told after the fact, the saga in Sacramento is playing out in real-time. The NBA media is getting constant updates on their Twitter feed about the incompetent, despicable Maloof family and how they’re leaving the house in worse condition than they found it.
This twisted tale is filtering all the way down to the fans, and when Charles Barkley talks about the deplorable business tactics of the NBA on TNT the cat is out of the bag.
This isn’t just league insider talk anymore, it’s coffee talk.
If the Kings leave Sacramento, it will transcend sport. The story of Sacramento Kings fans, arena workers, and the like will make the morning talk show rounds, ultimately culminating in a national discussion about the role of public money in professional sports.
Seattle -- a victim of the system – is excited that their Sonics might be coming home, but the mere exercise of having to replace the team that was stolen from them is a trying experience.
And even if they can secure an NBA team, some Sonics fans are having trouble with their own moral relativism.
For years they’ve railed on the NBA for stealing their team and now they’re trying to steal Sacramento’s team. They’re slowly understanding what it means to have that blood on their hands, and many Seattleites are already speaking out saying the juice isn’t worth the squeeze – especially when they know they stand a very good chance of getting a team down the road under more moral circumstances.
Unlike the Oklahoma City fans that can point at Seattle’s politicians and argue that they slept on the job – Seattle fans have no such target. Kevin Johnson has moved mountains to keep this team while the Maloof family can’t get out of their own way.
Besides wanting to move the team since they purchased it and ruining every arena deal the city tried to create in good faith, the Maloofs sold profitable businesses to build a pipe dream casino a mile off the strip in Vegas and it led to their downfall.
Rather than atoning for their financial mistakes, the Maloofs have dragged the league through embarrassment after embarrassment through the years, all because they cannot afford to own an NBA team.
Every subsequent episode is their worst one and the shenanigans come with increasing frequency, as just Friday night a report surfaced that their Palms Casino was getting popped with a $1 million fine for a prostitution and cocaine ring (no word if the price of the Kings just went up).
This isn’t a case of Sacramento not deserving the team, or not having the wherewithal to keep the team, but rather a case of a Maloof family that makes Antoine Walker look like Warren Buffett.
Sacramento has been paying for this Maloofery for years, and nobody is comfortable with an indecent proposal leaving Kevin Johnson at the altar. Not Stern, not Seattle, and probably not Gavin and Joe Maloof -- whose love of Sacramento has been trumped by brotherly grudges and family needs.
It’s against this twisted backdrop that sources close to the situation believe Sacramento has a chance, and some sources believe they are actually favored to keep their team. I happen to share that belief.
Once again it all comes back to the NBA. They can tell the Maloofs what to do here. If the offers between the cities are close, they can decline the move to Seattle and force the Maloofs to take them to court in an antitrust case if they don’t like it. There, the league can show a laundry list of claims that show the Maloofs are putting the league’s subsidy industry at tremendous risk by selling to Hansen.
After all, what city or politician can sell their constituents on making a long-term investment in the NBA when Sacramento did everything a city could to protect their investment and got told to kick rocks.
Also in the NBA’s arsenal would be the aforementioned increased relocation fee up to $300 million, and if push comes to shove David Stern can remove the family from the league using the ‘best interest of the league’ clause.
Regardless of what some of their intermediaries might like you to think, the Maloofs aren’t going to wade too far into those waters.
With the family’s debt to the league upwards of $127 million and as high as $217 million by some reports, and their financial situation a total mess, they’re bringing a whoopee cushion to a gun fight if they want to go to court. And if they do, they won’t have the law on their side unless Hansen can drastically overpay for the franchise, giving the Maloofs the argument that the league is costing them significant money by forcing them to sell to Sacramento.
Even then, the cash-strapped and beleaguered Maloofs would still have to win that battle in court.
Looking outside the courtroom and toward the league office, there has been a lot of talk about the wrongs that David Stern wants to ‘right’ in Seattle, and how he wants to remove that inscription from his tombstone.
You can’t cross out Seattle’s name and simply write in Sacramento’s and change your legacy. We all learned in kindergarten that two wrongs don’t make a right.
But that’s not what’s really at stake here.
As usual it comes down to the money, and with all things equal in this case the threat of killing the public subsidy goose will be the tiebreaker.
With Kevin Johnson’s legitimate, comparable offer from more-than-reputable buyers in hand, the NBA will have to both look a gift horse in the mouth and sanction Sacramento’s open-heart surgery if they move the team to Seattle.
And if they do, it’s going to leave a mark. A $3 billion mark.
And unless you’re the Golden State Warriors that’s not good for business.
