BY SPNW Staff 12:00PM 05/06/2013

Sactown investors make move to aid arena bid

Investors trying to keep the Kings in Sacramento made key concessions to the NBA, including a promise to limit the amount of revenue sharing they would accept, according to a story Monday in Sports Business Journal.

The concessions were made shortly before the relocation committee voted last Monday to recommend the team stay put instead of moving to Seattle. The issue was raised by the Seattle bid group led by Chris Hansen. He reportedly told owners at a committee meeting April 3 that the franchise in Seattle would be a payer into the revenue sharing system developed from the league’s new collective bargaining agreement, whereas the smaller market in Sacramento would be a be a revenue-taker.

Quoting an anonymous source, the outlet said the group led by Silicon Valley billionaire Vivek Ranadive agreed to accept fewer revenue-sharing dollars while the team was still playing at the old arena. Once the Kings move into the proposed downtown arena, the Kings would take no money at all.

The Journal said the Kings, who had the league’s worst attendance in the regular season, would expect to collect about $18 million a year under the new arrangement.

The concession could have been key in the relocation committee’s vote.

The magazine also said the Ranadive group agreed to pay for “a significant amount” of any cost overruns in the construction of the new, $448 million arena. But according to the term sheet tentatively approved by the City Council in March, the investors agreed to cover all of the overruns.

Neither the NBA nor the Ranadive group had comments on the story, according to the Journal.

In scheduling news, the NBA Board of Governors has formally booked a meeting May 15 in Dallas to consider the relocation committee’s 7-0 recommendation to keep the Kings in Sacramento. Still unclear is whether the league with also consider the Hansen offer of $357 million to buy 65 percent of the Kings from the Maloofs.

The relocation recommendation requires a simple majority of 16 of the 30 owners. The Hansen group, according to a source, has been researching whether support exists among owners to deny the recommendation, an outcome rarely seen in such matters.

 


YourThoughts

  • jafabian

    AGAIN, Sacremento is given concessions that Seattle was never afforded during the Bennett era when he ran the Sonics. At least we can count on Paul Allen to not support Hansen’s efforts. Hopefully Mark Cuban can be counted as well.
    You throw in the arena that Hansen’s group has put together and this is a half a billion dollars the NBA would be declining that is on a much more solid footing than the Sacramento bid. Consdiering how they whined how much they’re in the red during the lockout I don’t see how they can logically decline such an offer but then, who says anything they do is logical???
    Go Sonics!!!

  • Evergreen

    Wow, talk about eating your young. It looks like there are new rules to the NBA ownership game – new owners are going to be pressed into taking a lesser financial position than the current ones. In the short term this sounds like a great deal for existing owners, they’ll be fewer markets to support through revenue sharing and fewer markets to compete against for top talent. However, once an ownership group has to sell without the luxury of two competing offers (or threatening to move the team to Seattle), there probably are going to be fewer potential owners who want to pay top prices to own teams that are at a financial disadvantage vs. the rest of the league.

  • MWH

    Hmmm.. Interesting one of the reasons that is blocking expansion is that it would point to flaws in the new CBA…. Seems to me that this does the same…

  • davewakeman

    This would seem like it the deal would open itself up to review by the NBAPA. Because it does seem like this would undermine the ability for the Kings’ franchise to compete and this seems like that would be a fundamental issue that was supposedly being negotiated in the last labor mess.

  • Leon Russell

    “The Hansen group, according to a source, has been researching whether support exists among owners to deny the recommendation, an outcome rarely seen in such matters.”
    Going behind Stern’s back again? I’m not sure that is the best way to get in the good graces of the owners. But, maybe Hansen is planning to withdraw his proposal if he finds that he doesn’t have much support among the owners. If so, that would be the first good move Hansen made in this entire tawdry spectacle.
    Viewing from home, it appears that the Sacramento group has consulted with Stern every step of the way, and taken Stern’s advice at each step. Hansen, on the other hand, appears to have schemed with the Maloofs to achieve a “binding” contract without even letting the NBA know they were negotiating, let alone asking for Stern’s advice on how to proceed.
    Stern is likely already completely fed up with the Maloofs, after they reneged on the Sacramento arena deal they had originally agreed to last year, after Stern put months and months of effort into getting that arena deal done. And, I suspect that he is not too happy with Hansen trying to make the NBA “a deal you can’t refuse.”
    I would not be surprised if the outcome is the Maloofs selling to the Sacramento group and keeping Hansen’s “nonrefundable” deposit, to boot. Is Chris Hansen going to get “Maloofed”?

  • inplaylose

    This plan is audacious, at best, and completely wishful thinking at worst. Ranadive’s group is pretty much leaving no room for error with a plan like that. Everything has to go perfectly – no delays or significant cost overruns on the arena, the ability to somehow field a constantly competitive club to keep the building full – or else they are going to be drowning in red ink pretty quickly. It certainly isn’t a strategy I would count on succeeding, were I the league. But in this scenario as is set up, whatever the Sac ownership makes up seems to be good enough. It doesn’t make much economic sense, but if you look at the whole Charlotte-New Orleans-OKC-Seattle-Sacramento chain of events as it has unfolded over time, none of it has EVER made long term economic sense.