BY SPNW Staff 12:35PM 05/10/2013

Hansen ups bid for NBA Kings to $625 million

Chris Hansen threw down again Friday in his fight to bring the NBA Kings from Sacramento to Seattle, adding $75 million to his bid of $550 million. Here’s the text of his statement posted just after noon on his website, sonicsarena.com:

“In an effort to further demonstrate the extent of our commitment to bring basketball back to Seattle, we have elected to voluntarily increase our proposed purchase price for the Sacramento Kings NBA Franchise by $75 million — from an enterprise value of $550 million to $625 million. In conjunction with our revised offer, we have also guaranteed to the NBA that the Franchise would be a revenue sharing payer in all years in Seattle.

“We would also like to take the opportunity to again point out just how far ahead our Arena project is:

  • The ownership group has acquired 100% of the property necessary to construct the Arena.
  • We have 100% of our private financing for the Arena committed and in place.
  • After being approved by the City and County Councils the Arena MOU/legislation was signed into law by the Seattle Mayor and King County Executive on October 16, 2012. The referendum period expired 30 days later.
  • We engaged our Arena architects two years ago and have completed our detailed design schematics and costing.
  • We have filed for our Master Use Permit and are well underway with the Environmental Review Process, which we expect to conclude late this year.

“While we appreciate that this is a very difficult decision for the league and owners, we hope it is understood that we really believe the time is now to bring the NBA back to Seattle, and that it is paramount that we do everything we can to put Seattle’s best foot forward in this process.”

Hansen’s late bid is intended to influence owners who will vote Wednesday in Dallas on the relocation committee’s 7-0 recommendation to deny Hansen’s proposed move. The NBA this week reportedly asked Sacramento bidders making a counteroffer to put into escrow the entire amount offered the Maloof family by Hansen — $341 million for 65 percent of the team.

The Maloofs last month said the Sacramento bid was insufficient compared to the purchase and sale agreement they signed with Hansen in January. Hansen since raised the amount $25 million, but the Board of Governors, according to a source, did not consider the additional $25 million.

The bidders have since said they have put down 50 percent of the original $341 million.

But the owners have not voted on the sale of the franchise, only the denial of relocation.

Within minutes of the Hansen announcement, Sacramento Mayor Kevin Johnson, who led the counter-offer’s organization, emailed that he remained confident.

“The NBA leadership and owners have always said that their decision would not be dictated by a bidding war,” the mayor wrote. “This was always about whether Sacramento, a community that has supported the NBA for 28 years, can put together a plan and organization to ensure the franchise can rebuild and thrive. The ownership group, the city, and the community have shown the NBA, without any shred of doubt, that the Sacramento Kings belong in Sacramento.

“I believe the NBA owners realize that there is far more to think about than just an increased bid. They know what this story means to the league. We look forward to talking with all of them again in Dallas.”

 


YourThoughts

  • Jim_Harbaugh

    new video of Chris Hansen

    http://t.co/BHoNxqKgWD

  • Evergreen

    I love turn based strategy games and this back and forth between the owners is no less exciting. Nice move Chris, I hope this means checkmate.

  • jafabian

    BRILLIANT! Everything the Hansen group has done as been SPOT ON. The Finance Committee would probably have declined Hansen’s bid since five of the six are on the relocation committee so to up the bid by so much makes it almost impossible for them to decline it now. And the owners can’t say not to a group ready to go while the Sacremento group is still scrambling for investors and does not have a solid arena plan. At this point Clay-Clay better be worried because Hansen might want Sam Presti on his team.
    Food for thought: Is Steve Ballmer in contact with Paul Allen? Is Allen giving some “insider info” as it were? Or has Wally Walker been in touch with Rod Thorn or Rick Welts? The back and forth in all this has been incredible and Hansen has been very well prepared.

    • Leon Russell

      Word on the street is that Paul Allen despises Steve Ballmer.

  • http://www.facebook.com/jay.lovin.5 Jay Lovin

    Seriously…how good is it to be a Maloof right now?

  • Matt

    There are a few ways to interpret this. First, if there is dissension in the owners ranks, this could actually change a vote. But from what we’ve seen so far, the NBA wants the Kings to stay in Sacramento. Purchase price has mattered little thus far (or ownership group or arena plan). With that in mind, the BOG votes down the sale next week.

    Of course, Hansen and Ballmer may be anticipating just that in this move. While others debate whether the NBA is exposing itself to antitrust (personally, I think they are), this indicates that Hansen and Ballmer definitely think so. Turning down a now MUCH higher bid creates more of a bright line violation. You may agree or disagree, but that is likely part of Hansen and Ballmer making this move now. It creates legal leverage, or at least concern. Win or lose, the NBA does NOT want to go to court on this. Everyone keeps thinking about Hansen and Ballmer losing, but what would the NBA losing look like? No control over teams selling or relocating? Does it want that? Does it even want to RISK that? This latter question is more important. The question is with an unquestionably superior offer with the increasing risk of legal action if it is rejected, will that force the league to cave and grant Seattle expansion for Fall 2014? That’s likely the real end game for Hansen and company.

    • Leon Russell

      “No control over teams selling or relocating? Does it want that? Does it even want to RISK that?”
      If the NBA caves to Hansen, then they have effectively conceded their control over teams selling or relocation. They will have admitted that the high bid wins, and if you want to buy and relocate a team, all you have to do is make the highest bid, and the NBA can’t do anything to stop you.
      The only way the NBA could prove they can control sales or relocations is to deny the Hansen bid. Then, if the NBA is sued and loses, they will be in the same position they would be in if they caved to Hansen.

      • Matt

        There is a big difference between the League deciding to allow something to pass and a judge stripping the league of that decisionmaking ability. One leaves the door open. One shuts the door in your face. It’s been commented on how rare the current situation is. How few other teams are available like the Kings. Telling an owner they must accept a lower bid is a much more dangerous precedent, well, that’s if you’re an owner. We could care less. ;)

        • NixBeeman

          Perhaps, but the league wouldn’t be “telling an owner they must accept a lower bid.” Nobody is forcing the Maloofs to sell. If they want, they could sit on the team for another decade and hope some local fools offered them the same $625 mil.

        • Leon Russell

          “There is a big difference between the League deciding to allow something to pass and a judge stripping the league of that decisionmaking ability.”

          Not really. If you are afraid to exercise a right, because you think that may cause you to lose that right, then you really don’t have that right in the first place.

          in other words, what good does it do the league to claim the right to approve relocation if they are afraid to use it? If they don’t use their claimed right, then they may as well not have it.

          It works both ways. Nobody knows that Hansen would sue if he doesn’t get his way. He has not threatened to sue. And, if he did sue, then the NBA, at that point, could try to buy him off with an expansion team.
          And, didn’t the NBA already refuse to allow the Maloofs to sell the Kings to someone who wanted to move the team to Santa Clara, or someplace like that? If that is true, then the NBA got away with scotching that deal.

          But, really, what good does it do the NBA to claim the right to approve or disapprove relocation and sales of teams if they are afraid to exercise those claimed rights?

  • zigzags

    Great maneuver, love seeing the back-and-forth of this whole situation. I just wish we could see the look on Stern’s face when he heard the news… now THAT would be FAN-tastic.

  • jafabian

    I bet Sterno delays the BOG vote AGAIN. He’ll say they aren’t ready when in fact he’s trying to line up more investors. And baby they ain’t there because Steve Ballmer cashed out over a BILLION in stock two years ago just for this moment.

  • Leon Russell

    This probably does not change the vote on relocation. But, if Hansen is willing to buy the Kings even if he can’t move them to Seattle, then it may make it more likely that the NBA won’t deny the sale.
    If the NBA denies relocation, then I don’t see any urgency for the NBA to vote on the sale. Since the Kings would not be moving to Seattle, the NBA could say they are going to take their time considering the sale, particularly since Hansen keeps changing the details of the offer.
    These changes to Hansen’s offer today would probably give the NBA reason to postpone the decision on the sale for a few months, at least, if the NBA wants to delay that decision.

    • jafabian

      Definitely doesn’t change vote on relocation, at least on the Finance Committee. Five of the six on the Finance Committee are also on the Relocation Committee. Conflict of interest anyone?

      • Todd

        You Sac fans don’t get it. The BOG votes this coming week on relocation . The last vote was a poll among the relocation committee. Not the actual vote. So after the increased bid there is still a good chance of the owners voting to allow the move. I think they would love to see their franchise increase in value by 100M plus?

  • Leon Russell

    If Hansen and Ballmer can keep upping their bid for the Kings, they surely have enough money to pay for their own arena without any tax subsidies. Why don’t they increase the amount they are willing to put into a new arena by $100 million, also? Because Mayor McGinn is a country bumpkin who couldn’t negotiate his way out of a wet paper bag.
    Say “no” to Hansen/Ballmer and they throw more money at you. That’s what McGinn should have said to Hansen on the arena deal: “no.”

  • Todd

    Do you think these guys in the Seattle group made their fortune losing? They will get what they want because they have more power than the NBA. If the Sac group can’t come up with another 100M to match the Maloofs, they are not selling. Why would they?