The Maloof family that owns the Kings wrote via letter Friday to the NBA that the Sacramento offer was a “significant distance” of the Seattle offer from Chris Hansen and Steve Ballmer, yet Commissioner David Stern reiterated that he would give more rope to the bidders from Sacramento.
At a press conference in New York following the Board of Governors meeting, Stern basically agreed with the Maloofs by saying the offer was “80 percent” of the Seattle offer, but also said he expected the offer to match perhaps as soon as over the weekend.
They’re in the same ballpark,” he said, “with respect to the net result to the selling family.”
Asked by KING5′s Chris Daniels what the hold-up was, given the Maloofs’ desires and Stern’s positive words about the quality offer from Seattle, Stern grew testy.
“At the end of the day the (finance/relocation) committee, which is going to meet next week, will have to take a vote and decide what to do,” he said. “So I don’t understand, not only your question, but where it would come from.”
It comes from a growing belief in Seattle that each day represents more time for the Sacramento group to provide a complete match. But the unprecedented nature of this bidding battle between two cities for a free-agent franchise apparently has no shape or form.
“It’s the only time in the last 37 – 47 years – that I haven’t known the answer,” Stern said, mocking his lengthy tenure as well as his legendary self-righteousness, then turning serious. “No, but this is one that’s just been quite difficult and confusing for the owners as well. And we’ve been working very hard to give it a structure at their direction.”
A point of contention appears to be a requirement by Sacramento that the Maloofs abandon the signed purchase and sale agreement before the counteroffer becomes binding. Business law prevents the seller from holding two offers for the same item when an exclusive negotiating window exists.
The Maloofs do not want to abandon the Hansen offer because, according to their letter, released to the Associated Press few minutes before Stern’s press conference, it would give “leverage to aggressively renegotiate terms in the event the existing agreement is terminated,” and well as be subject to a breach of contract suit. The Maloofs called the offer a “staggering and ultimately unacceptable execution risk.”
Hansen also could be in a position to sue the Sacramento bidders for tortious interference.
The legal consequences of a decision are another dimension to what Stern called a “wrenching” decision that occupied two hours of Friday’s meeting, and will require a reconvening of the committee next week. The committee is expected to forward a recommendation to the BOG, which by league rules mandate must be considered for seven days. So the likely vote date is now estimated to be the week of May 6.
The Maloofs’ letter says that the Sacramento group did match the initial Seattle offer of a total franchise valuation of $525 million. Hansen agreed to buy 65 percent of the team for $341 million. But apparently the Sacramento offer does not match Hansen’s $30 million nonrefundable deposit, nor the additional $25 million Hansen added to the valuation a week ago.
Stern took issue with the Maloofs’ contention, saying, “There is a down payment. It is binding.” Then he added: It”s not as complete as it probably is going to be by the close of business today or tomorrow.”
Explaining the process, Stern said, “The owners are deliberating quite conservatively and deliberately because each team owns its team in its market, and that is why, when a team wants to move, it becomes the province of the board, rather than ownership.
“That’s why we have this constitutional provision which has this rather labor-intensive process that is sort of weighing down on all of us as we go down the checklist.”
Beyond matching offers, Stern mentioned the other big issue: “Of course, we’re most concerned about the critical path of arenas getting built.”
Asked if expansion remains a non-starter, he paused, then said, “I don’t want to say a complete non-starter. If the question is: Was there any discussion of expansion? The answer is no.
“I haven’t heard (expansion) in any shape or form, particularly when we don’t know at this time what the next television network contract would be,” referring to the expiration of the TV contracts at the end of the 2015-16 season.
One new development was that Stern said “the first order of the day” when the owners would vote will be about relocation, which requires a simply majority of 16. That could be a tactic that would allow the NBA to avert by procedural maneuver the direct insult of the second vote — telling Hansen his money was no good.
Stern did acknowledge the quality of Hansen’s effort.
“What makes this particularly difficult . . . is the Seattle group has done a lot of work,” he said. “It’s well-funded. It’s got spectacular businessmen who support the community behind it, and the Sacramento group has a very strong base of economic support as well.”