Stern says Sacramento bid 'not quite there'
David Stern identified April 3 as the next critical date when NBA relocation committee members will get together in New York to begin evaluating offers and arena proposals. (AP)
On February 21, the Maloof Family, owners of the Sacramento Kings since 1999, agreed to sell the team to a Seattle group led by Microsoft billionaire Steve Ballmer and San Francisco based hedgefund manager Chris Hansen.
If approved by the NBA Board of Governors at the April meetings, the franchise would move in time for the 2013-14 season and play in Key Arena until a new facility is built. But Sacramento Mayor Kevin Johnson is running the point in the same fearless manner that he did as an NBA All-Star, while sending the relocation game into overtime.
He has drafted his own potential ownership all stars: Ron Burkle, billionaire owner of Yucaipa Companies and the Pittsburgh Penguins, along with 24 Hour Fitness founder Mark Mastrov. They and other local investors have committed to purchasing the Kings, keeping them in Sacramento for the long term and building a new downtown arena.
Commissioner David Stern was asked where Sacramento’s efforts stacked up to Seattle’s offer.
"I would say that the counter bid, if you call it that, has got very strong financial people behind it, but it was not quite there in terms of a comparison to the ($341 million) Seattle bid." Stern continued, "But I have an expectation, a hope, that the variance will be eliminated by the time the owners get to consider it.”
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Stern acknowledged the complexities of a situation involving two ownerships groups and two cities competing for one team. ”Unprecedented,” he said. Stern identified April 3 as the next critical date when NBA relocation committee members will get together in New York to begin evaluating the offers and arena proposals.
"At the end of the day, it is for the board of governors to make the ultimate decision as to who the team will be sold to and where it will be located," he said. "I've spent a fair of number of years to establish that power and prerogative within the board of governors. If an ownership group has decided to exit our league, it doesn't retain the ultimate right to tell us where the team will be located. It is for the board of governors to decide."
This contest for all the Kings horses and all the Kings men is a classic thoroughbred match race, and picking a winner will challenge even the most experienced handicapper:
1) There are outstanding billion-dollar bloodlines in the ownership bidding groups: Price has been set at a valuation of $540 million dollars.
2) Which proposed new arena will be a greater revenue generator for the NBA? Which venue can be completed in the shortest period of time with the least debt and the greatest contribution from local governments?
3) The Kings have the only major-pro-team-in-town advantage: 19 sold out seasons in 27 years, 2.3 million citizen, many of them cowbell-ringing Kings fanatics, and a top 20 TV market. Seattle’s new Sonics would have competition from the Seahawks, Mariners and the wildly popular soccer Sounders.
4) Conventional wisdom is owners are reluctant to reject a fellow owner’s deal to sell, especially at such a high valuation: In the past 35 years, five teams have been granted permission to move with only Minnesota rejected. New Orleans relocated to Salt Lake in 1979, Kansas City Kings to Sacramento in 1985, Vancouver Grizzlies to Memphis in 2000, Charlotte to New Orleans in 2002, Seattle to OKC in 2008. The Clippers moved without permission when they left San Diego in 1984. The league sued and the team settled by paying six million dollars and building a fan base in LA. The Nets walked from New Jersey to Brooklyn, but that was in the same metro area.
5) Stern’s legacy: With the Commissioner stepping aside, does he want a relocation battle at his going away party?
6) Litigation: The NBA will consider the possibility of an antitrust claim by the Maloofs or Ballmer/Hansen if their deal is turned down.
7) Local broadcast revenues: Which market promises the brightest future with the highest rights fees and ratings?
8) Revenue projections: How will the business plan be implemented and what will be the makeup of the management team? The board of governors will insist on seeing specific revenue projections, and want to know who will be running both basketball and business operations sides of the franchise.
As my high school history teacher Mr. Sterling liked to say, “Always expect the unexpected.”
Little did he know that he was giving us an overview of the next few weeks which will determine the future of the Sacramento Kings.