BY Art Thiel 03:00PM 03/05/2013

Thiel: Fate of NBA Kings? The unexpected

The perverse history of pro sports in Seattle has another chapter looming with a competitive bid from Sacramento for the Kings. But if the history is studied, an answer emerges.

Safeco Field under construction in 1998. Ten years earlier, would most Seattle sports fans have envisioned such a thing? / City of Seattle

Migawd. Do we have a perverse time with pro sports in Seattle, or what?

In 1970, trucks bearing the Seattle Pilots baseball equipment left spring training in Arizona and instead of heading due north, went northeast and relocated the team to Milwaukee. The state sued the American League, won, and received in 1977 the expansion Seattle Mariners as a settlement.

In 1992, the Mariners were all but moved to Tampa until a Japanese billionaire came out of nowhere to buy the club to keep it in Seattle. The American League tried to stop it, was accused of xenophobia and racism by Seattle and the nation, and relented. Guy still hasn’t seen his first Mariners game in person.

In 1996, trucks carried the Seahawks franchise to Los Angeles, where the team attempted to relocate without having a place to relocate. The NFL ordered the team back to Seattle.

In 2006, the Sonics abruptly were sold to out-of-towners because the arena that was updated 11 years earlier with $100 million in public money was declared economically obsolete. In order to get a $45 million settlement, the city dropped a winnable lawsuit that would have kept the team two more years. Five years later, the city is loaning $200 million to build a new arena for an NBA team that, coupled with the franchise purchase, will have a public-private cost of more than $1 billion. And it may not be sufficient.

Shake your heads, sports fans. Hard, and often.

This history is offered as a partial explainer to my readers in Seattle who accuse me of traitorous reporting, and to newer readers in Sacramento who’ve said I’m a boosterish homer. I wish I was one or the other, because staying in the middle is a lot harder. But some things become clear:

Pro sports is a dumbfounding, exasperating, nearly lawless industry, loaded with more charlatans, narcissists, miscreants, outlaws and wastrels than your average House of Representatives. Not everybody fits the dubious portrait, but the outsider rarely knows which is which, because there is no program or scorecard for the real game of pro sports, which is behind closed doors, not in open stadiums and arenas.

For sports fans used to investing two or three hours in a contest and getting a result, the secrecy, process and deceit of franchise manipulations are epic aggravations. Yet fans riven with emotion about getting/keeping an NBA team crave any information that tells them what they want to hear.

As it stands now, the public knows some things about the fate of the Kings franchise, but can conclude nothing about the outcome because so few facts have been disclosed. The game is still being played. Seattle’s history with its franchises was provided above because the common thread is that most of what was believed at the time turned out to be wrong.

Most people in Seattle believed the Pilots could not be yanked after a year. They were wrong.

Most people in Seattle believed that the Mariners would never find a buyer to keep the team here. They were wrong.

Most people in Seattle believed that when the trucks pulled out of Kirkland, the Seahawks were gone. They were wrong.

Most people in Seattle believed that 41 years of history, tradition and excitement around the Sonics, not to mention $100 million, were worth something to the NBA. They were wrong.

So much for conventional wisdom in pro sports.

Today, fans in Seattle want to believe that Chris Hansen, who seems genuinely to be the antithesis of the stereotypical sports mogul described above, has done enough of the right things to get an arena built and a team purchased.

Just as eager are the sports fans in Sacramento, whose mayor, Kevin Johnson, has spent the last three All-Star Game weekends lobbying NBA owners to keep the Kings in his town. As indefatigable as is Hansen, so is Johnson, who helped assemble a counteroffer to the NBA Friday that included wealthy investors as capable of the big buy-in as Steve Ballmer and the Nordstroms in Seattle.

In January, shortly after the Hansen purchase agreement was announced, NBA commissioner David Stern met for two hours in his office with Ron Burkle, an owner of the NHL Pittsburgh Penguins, who was identified Thursday as the arena developer in Sacramento. Stern would appear to be taking him seriously.

Over the last decade I have learned to be skeptical about whatever Stern says regarding the business of his franchises, because his remarks are designed to manipulate, deflect or obscure the public’s understanding. As an example, at the All-Star Game, he was asked a question about Seattle’s support for pro sports, and he replied that the Seahawks and Mariners were given public subsidies, but there was none for the Sonics. He deliberately ignored the $100 million in 1993 that paid for the renovation that became KeyArena.

That’s the kind of prevarication that makes him so untrustworthy. But he did answer another question in an intriguing way, when he was asked whether both cities can be made happy.

“I don’t see any scenario where both cities are happy,” he said. What he implied, and another answer supported, is that expansion is not under consideration.

But if we follow the pattern of Stern’s deliberate manipulations, the remark means he’s lying. Therefore the opposite is true.

Makes perfect sense. Why would Stern publicly suggest expansion is possible now, which could lessen the urgency felt one or both cities? The competition between Seattle and Sacramento will drive up the value of the Kings franchise — and by definition the value of every franchise in the league — as well as improve the quality and the financing of their respective arena projects. As long as both investor parties see the same bad outcome in failure, they will work to do Stern’s bidding.

If in six weeks, when the NBA owners vote on whether to relocate the Kings, the bids are roughly equal but neither arena plan is assured, a more distinct possibility is that owners choose the best one for the moment and promise expansion to the other.

If asked, Stern will simply say, “I changed my mind.” And once again, the conventional wisdom in Seattle sports will have been foiled again.

 


YourThoughts

  • tedsfrozenhead

    KJ should have had a group and a plan, independant of the Maloofs, ready for this inevitable day. He has ignored warning signs for years and did nothing but expect the worse couldn’t happen.
    Now it is all about public posturing to turn the departure of the Kings into a political windfall.

    • art thiel

      Ted, you missed the fact that Burkle made an unsolicited, quality bid in 2011 for the Kings that was rejected by the Maloofs. Burkle has been there all along, but he can’t buy something that’s not for sale. KJ in fact put this deal together damn fast. And the bid went in Friday. If that happened in Seattle, you’d be cartwheeling.

  • Tian Biao

    excellent analysis, Art: why would Stern say expansion is on the table, when an expansion announcement would end the bidding and arena-building war between the Sacramento and Seattle groups? great insight. But doesn’t that mean expansion is still off the table? I mean, the NBA loves this extortion game, loves watching owners wring money from taxpayers by threatening to relocate. Wouldn’t adding a couple more franchises dilute this cozy setup? Or is there an endless supply of wannabee cities out there?

    • art thiel

      It’s off the table until the NBA decides to put it back on. Strictly an economic call.

      Stern at the All-Star Game gave a plausible answer on expansion: The expansion fee is one-time cash up front for all 30 teams, but they have to cut the new team an extra slice of the revenue pie. Stern called it neutral — at the moment.

      If revs go as anticipated from the new CBA, in the long run the slice should be more valuable than the one-time payment. But Stern/Silver would like to make that expansion commitment in 2-3 years not Feb ’13.

  • Mr. Baker

    A 1993 reference makes it all work for Art. Art, that was two decades ago.
    The quote you took was out of context. Stern said in the All Star Game interview that he would leave questions about expansion to Adam Silver, that the decision on the Kings was to be made by the NBA board of governors and not him.

    • art thiel

      Thanks, Bake, for the calculation on the decade. Would never have figured that out.

      I’m also impressed that you’re as selective as Dave is about history. The Mariners deal that Stern cited at the All-Star Game was 18 years ago, the Seahawks deal 16 years ago. When you and Dave agree on a statute of limitations for facts, please inform me.

      And again, you’re taking Stern’s statements at face value. How have you not learned? Stern is deliberately deflecting attention from himself to owners/Silver. But if it’s going to be up to Silver, why did Stern take the meeting with Burkle in Jan? This is all about Stern, and he’s giving up no control on his watch. Look up messianic complex.

  • Tim

    Brilliant Art! Never thought of it this way but that’s why you’re paid the big bucks. I’m always amazed when you’re called out by the occasional Sonics’ fan for doing your job as a commentator. I don’t think pom poms are befitting of you anyway.

    • art thiel

      Thanks, Tim. My legs aren’t bad, but no one wants me to prove it in a short skirt.

      Sports fans are all about passion, and that’s good that they care. But it’s hard to find room sometimes to wedge in a little logic.

  • Jared S.

    My worry is that this is all some plot by Stern to save Sacramento and stick the knife in Seattle again (since he enjoyed it so much the last time). I hope Hansen and Ballmer know what they’re doing in dealing with him.

    • art thiel

      I don’t think Stern is plotting against the league’s interests for selfish reasons. I know what Stern would say to that charge regarding the move out of Seattle: “Things worked out in Oklahoma City, didn’t they?”

      Hansen and Ballmer are plenty sharp. But there’s nothing more to be done, now that’s Sacramento’s turn.

  • jafabian

    Excellent column as always Art. I keep thinking that professional sports is at the precipice of collapsing. With the drug scandals, athletes and owners behaving badly and continuous battles with civic leaders at some point something has to give sooner or later. What keeps things going for them is the cash flow that comes in from fans, sponsors and networks though even that can stop at any time under the right circumstances. I used to think new sport leagues would learn from the mistakes of the old ones but even the WNBA and MLS have slowly let their salaries rise up to high levels. Are fans to blame? Owners? Athletes?

    Ultimately, the Kings becoming the Sonics is a 50-50 proposition. It’s hard to tell what’s going in in Sterno’s head. I can see him saying the Seattle market (ranked 13th) is more beneficial to the NBA than Sacramento (ranked 27th) but I can also see him saying that Seattle helps the NBA more by being an example of what can happen to NBA cities if they don’t work with the NBA on giving their teams a Taj Mahal-type of arena. I imagine the NBA is concerned about the markets their teams are in since they recently moved the Nets and Warriors to larger markets but then Sterno might be thinking by doing that it compensates the loss of the Seattle market.

    Sterno and the NBA are as confusing as a Trail Blazer draft board. (But only if a 7 foot center is involved)

    • art thiel

      As long as you and I and millions of others keep writing and talking about sports, we keep driving the bus that takes us to these bizarre places.

      You’re right about the 50-50 (BTW, Sactown is 20th in mkt size). Sactown’s advantage is that it’s a one-horse town that will care more about the Kings than Seattle will care about the Sonics, because we have other diversions.

      • jafabian

        The saving grace for Hansen’s group is that they have a signed agreement and a hefty deposit already down. You can’t sell a house and then renege after the DOT is signed and the down payment has been paid. However if Clay-Clay and Sterno can break a Key Arena lease they can certainly back out of a handshake agreement. What do they care? The NBA is getting a lot of money for an also-ran team! But I do think that it sticks in Bennett’s craw that no one in Seattle likes him. He has THAT much ego and would like to see the Sonics return. Then he’ll hold a press conference and claim this all happened because of him.

        • art thiel

          Bennett will not be a bad guy in this scenario. He is in charge of looking at league welfare with the choice to stay or move the Kings. Petty vindictiveness will be of no help.

          You’re right about having the PSA and deposit. But that means he can have yhe team — not necessarily to relocate it. If he can’t relocate, he will drop the bid, and I bet he gets his money back.

      • Will

        Sacramento might not have many sports teams but they have more than one horse. The American River, Sacramento River and Folsom Lake offer terrific boating, swimming and fishing and San Francisco, Lake Tahoe, Reno, Yosemite, Lassen, Napa valley and Carmel/Monterey are all within a day’s back and forth driving distance. And I bet if you polled the greater Sacto area you’d find a significant number of SF Giants’ fans.

  • PokeyPuffy

    Wow, a great take on Stern, reverse psychology, and franchise scarcity. I really like the historical overview as well!

    The only thing i would add to our checkered sports history here in Seattle: the 2006 sale of the Sonics featured a local icon as the seller, and to thicken the plot we had the #2 overall pick in the draft, with Portland holding the #1. I remember some analysts saying at the time that the Pac NW was going to be an NBA powerhouse for decades. Of course our neighbors to the south passed over a once in a generation talent that is KD, landing him in our laps for the moment.

    KD is now gone, and rough as it is to put a total value on a player, i’m sure it exceeds the 45 million we got out of our lease buyout….

  • SeattleNative57

    I agree with your conclusion that this game is played to the benefit of the NBA and that expansion could be the result for Seattle. I respect Hansen and his investors, especially their business acumen. I cannot believe they would spend $30 million recklessly for the right to buy the Kings. That’s a helluva lot to throw away if the NBA chooses to keep the Kings in Sacramento. I cannot believe Hansen et al would throw that kind of loot away. But what do I know?

  • http://twitter.com/Guy_K_Browne Guy K. Browne

    If my cynical view of the NBA rings true, the Kings will become the Sonics. The NBA is in the extortion game, and if they don’t burn down the house once in a while, this game becomes more difficult. It would have been very easy for the league to deny the relocation of the Sonics, at least until it could be determined if a local buyer with deep pockets could emerge. But the NBA needed this move so that future extortions could be carried out. Ironic that the next ploy would involve the very city that was burned in the last one.

  • http://www.facebook.com/vaneaton1 Justin Van Eaton

    I have real sympathy for Kings fans. Even if they keep their team, the process they are going through is heart wrenching. I hate that there has to be a winner and loser in this deal. KJ is a likable guy, and if Nickels had expended a 1/4 of KJ’s energy on retaining the Sonics, I think they might still be here. I still believe Stern wants to bring a team back to Seattle before he bows out as commissioner. But, yes, I agree, Art. Especially in this town, you can certainly expect the unexpected when it comes to sports.

  • Jimc

    Wow. Just wow. An excellent article with an excellent point. And, it makes sense…Relocation fee, or expansion fee. One things is for sure, those billionaire’s money is still green, and Stern still likes making money on his monopoly board. But I am also liking JFabian’s comments as always. Lots of billionaires out there. And Larry E is getting older especially. Stern may decide that Seattle hasn’t marinated long enough. OK all those metaphors have made me hungry. Lunchtime.

  • http://www.facebook.com/herb.huseland Herb Huseland

    Does anyone remember that Lou Pinella was a Pilot for a short time?

  • http://www.facebook.com/herb.huseland Herb Huseland

    When I lived in L.A in the ’60s I could watch Sandy Koufax pitch a no-no from a louge box seat. $4.50 Koufax and Drysdale worked for $50,000 per year at their peak. If pro sports fail it will be because we the public are allowing the players to become millionaires with our money.

  • Wayne

    …loaded with more charlatans, narcissists, miscreants, outlaws and wastrels than your average House of Representatives.

    That is an outstanding line!

  • Ronald Baugh

    A few thoughts

    1. Seattle is very valuable to the NBA without a team. As we see with Sacramento the threat of Seattle for extorting money from the local teams for new buildings works, Seattle is a great market but not the greatest market. teams could make more in Seattle but it is not so great as to be in need of a team. The market is shared with baseball, MLS, the Huskies, and the Seahawks. It is a market where fans will not support a losing team (not a criticism, who wants to pay to watch poor performance) which lowers revenues. Overall Seattle is a mid level market and a football city. That makes it great as a potential threat market and it is valuable as that to the NBA. Kansas City and Virginia Beach are not nearly as good of a threat.

    Added to this is the fact that arenas seem to have a sort life. I can remember that the Kings arena opened shortly before the Sonics renovation so basically you get 15 to 20 years hell the Sonics didn’t even get that. That means a lot of teams may need to threaten for renovations or a new arena in the coming years.

    2. Expansion is a one time shot of money at the cost of a loss in franchise value and TV revenue. The Kings are expensive because there are enough rich people out there who want teams and will drive up the price of teams. This is huge for the owners and I think even they are surprised at what some people are willing to pay for teams. Adding one team might not be a big deal but adding 2 might. Also they may want to keep Hansen around as a potential buyer which could drive up the price as well. If he is lurking then local investers will have to pay more. Further cutting the TV revenue up by one more team might not be worth the expansion fee.

    If there is no expansion thos will be the reasons for it. Not that there are not viable markets for example Seattle and Vancouver never got a fair shot, and possibly KC maybe Columbus and Vegas. Also there is an abundance of talent internationally and even homegrown, but that might be given as a reason. Still the reason will be greed and that to the current owners Seattle is more valuable without a team than with it.

    I hope I am wrong, I really do because for the fans and growing the game long term expansion would be great. It is that the owners have too much mid term incentive to not expand. Which is about the time they will own thier teams.

    Finally to Herb

    Inflation is a nasty thing but 4.50 in 1964 (middle year of that awesome five year run for Koufax) is worth 32.87 today according to an inflation calculator. So ticket prices have gone up some but not that much. What part that has gone up is because people are willing to pay the price not because players are getting the salaries. Also it is good that you used Koufax and Drysdale since their holdout was a catalyst to get players motivated about free agency. The last thing to complain about is the players getting more money when the owners are the ones who scream poor while milking local taxpayers for stadiums and conducting lockouts.
    I am really hoping for the Sonics to return and I love sports but these things are part of the reality and we must accept it. I can root for the Seattle teams because they represent us and because I love the sports but the sad fact is that the people in the business are in it not only to make a lot of money, but to make every last dollar they can.

    • Ronald Baugh

      Despite my feelings on what could happen. I really hope I am wrong. great column Art and thatnks for at least giving me some hope that there is a way Seattle will get a team even if the Kings don’t work out.

    • Marc Mocorro

      I agree with some of your comments, let me point out that you forgot to mention one
      critical point and that would be winning ? Fans wants to support winners.
      A winning product will bring out fans, nobody wants to see a looser, and in some
      cases support losing teams.
      Second point not everyone is a Football, Baseball, Soccer, or College fans all at the
      same time. Some might just like football, or others might like combo sports like baseball or basketball, a lot of soccer fans don’t like any other sports especially
      American football.
      A lot of sports fan loves to spend their dollars on sporting events, don’t get me wrong
      some people are not sports fans, and are more travel/ vacation oriented.
      Some are transplant from other cities who happens to like maybe the Lakers. or
      the Knicks, some are Bulls fans , and would show up in groups to see their favorite home team when they come to Seattle.
      Not all sports fans that live in this city are Seattle homers who cheer only for the home teams.
      Personally I love the Seahawks, Mariners, Sonics. My brother only likes the Sounders.
      My sister only supports the Huskies college team.
      To say that it is hard for a city like Seattle to support 5 different teams are irresponsible and a personal opinion only with no actual facts.
      they are merely a propaganda .
      In Sacramento, they are so hung up, and insecure about loosing their team
      that they have created the same baseless argument that Sacramento is a better
      fit for the NBA due to the fact that the Kings are the only game in town.
      Statistic we’re thrown out there by Mayor KJ , that the King we’re sold out
      19 out of 23 years , which proves my point that when a team starts loosing, like
      the last 4 years in Sacramento, that fans anywhere would not be watching a
      bad product,
      wether It’s in Seattle or Sacramento.

  • http://twitter.com/DesertDawgTempe Billee Lorig

    With 20 calendar days and 14 business days to go until April 3, SAC has NO Bid or Counteroffer as it was thrown back in the face of Mastro/Birkle. Plus NO Arena Deal and NO Financial Infrastructure.

    SAC Kings has had the worst attendance in the NBA for the last 5 years. This is for a (1) one
    horse town. This is for a town that supposedly that has no diversions? Wrong, Sacramento is only 80 miles from the Bay area.