BY Art Thiel 05:27PM 05/17/2013

Thiel: 3 simple answers to why Kings stayed put

As Sacramento celebrated Friday, Seattle’s relations with the NBA — mostly David Stern — need to get better before anything good happens.

Kevin Johnson made a point. City of Sacramento.

In a celebratory press conference Friday morning at City Hall, Mayor Kevin Johnson summed up the the practical and emotional drivers that preserved the Kings for Sacramento: “It’s about jobs and it’s about revitalizing downtown. It’s about civic pride. It’s about not letting somebody take something that isn’t theirs.”

Taking something that isn’t theirs. That about sums what was always going to be the dirtiest part of returning the NBA to Seattle. And it provides desperate inspiration, as NBA Commissioner David Stern knows well.

The second-worst part for either city was the price: More than $1 billion — $535 million for the franchise paid to the Maloof family, a suggested retail price of $448 million to build a new arena, plus uncounted treasure in cost overruns and defending against legal challenges. The total cost would have been at least that in Seattle, plus a $115 million relocation fee.

But at the conclusion of five months of emotional whipsaws for Seattle hoops fans, 27 months of arena-plan wrangling in Sacramento and 14 years of tumultuous ownership of the Kings by the Maloofs, one simple sentence explains why the price was little matter and the outcome foreseeable in a saga unique in the history of modern American pro team sports:

The Kings were Sacramento’s to lose, not Seattle’s to win.

Why was Sacramento able to complete an astonishing rally to convince Stern to convince 22 owners that the hasty, unbaked proposal was worth the risk of denying a much more sound plan of Chris Hansen and Steve Ballmer? That too, has a simple answer.

Sacramento’s leaders and many citizens believed that keeping the only major sports franchise the market likely will ever have was a community need. In Seattle, the return of the Sonics was a community want.

And that leads to a third simple answer, this one to the question of why the NBA would turn away from the financial upside of the Seattle market.  The answer was clear well before the 2008 move of the Sonics to Oklahoma City, and buttressed by five years of positive evidence from the cleaned-up Dust Bowl: The NBA will have a better chance to succeed in one-horse markets like San Antonio, Salt Lake, Portland, Oklahoma City and Sacramento.

Not a guarantee, of course. What is? The NBA knows, and will never admit, in most markets it shares with the NFL and MLB, it will be the third ticket. And in often-anomalous Seattle, there are the Sounders.

But with the NBA’s new collective bargaining agreement favoring owners with lower labor costs and better revenue sharing, the chance for succeeding in markets that define pro sports as a need, rather than an option, is greater.

@CarmichaelDave is the ultimate Kings fan and media personality. He was called by Johnson to the podium Friday to represent the fans. He made an honest, civic-deprecating point when he said no TV or radio game-show contest ever makes a trip to Sacramento the first prize.

Sacramento does not have Felix Hernandez, Russell Wilson, a Division I college football program in a nearly new stadium ready to open in the fall, or the most successful pro soccer team in U.S. history. It does not have a race track, a large waterfront, multiple urban lakes, benign summer weather and three national parks not far away.

Sacramento has state government, the Kings, a nice AAA baseball team and tule fog. It also has ambitions.

As the capital of the world’s eighth-largest economy, Sacramento is a place where many big businesses send people to make deals with the state. After 6 p.m., folks coming out of the state capitol building walk into decaying downtown will not be mistaken for South Beach — except perhaps for those nights when LeBron is in town.

As to whether the value of the arena project is inflated, or its real costs deflated, no outsider can really say with authority, although Hansen/Ballmer certainly believed it. But the view of outsiders doesn’t matter. What matters is that mega-wealthy Californians such as Vivek Ranadive and the Jacobs family of San Diego teamed up to put down money for the purpose of revitalizing the capital for the sake of the city and state. And get a big round of applause they would never get in their own businesses.

Through no fault of Hansen/Ballmer, no such stakes were visible in Seattle. The return of the NBA was desirable, not mandatory, and the arena’s preferred location in SoDo was defined by its noisy critics as an over-development for a neighborhood already too busy.

Then there was the history with the NBA. Not only did the state Legislature refuse in 2008 to re-purpose a tax revenue stream that would have combined with private money for a $300 million upgrade to KeyArena, the city of Seattle had on its books, mandated by a 74 percent yes vote in 2006, a law unique in American municipal history: Any lease of a city facility to a pro sports team must return a small profit (I-91).

To many fans, these facts may have been little noticed and long forgotten, but they combined to create one image, right or wrong, for Seattle with Stern: Hostile business environment.

To his credit, Hansen knew the scene well enough to devise an arena plan with work-arounds for both issues. The plan included much more financial responsibility for the private sector, and enough return to the city to more than satisfy I-91. But apparently it was not persuasive to Stern.

NBA owners may never say whether Hansen’s plan mitigated the hostile business environment; they don’t have to, because as Stern said, in another clever diversion, “This vote was not about Seattle. It was about Sacramento.”

I believe it was about Seattle nearly as much as it was about Sacramento. The weight Stern gave incumbency as the deal-maker merely made the explanation easier to consume.

On Jan. 28, shortly after Hansen’s purchase-and-sale agreement with the Maloofs was announced, I wrote a column that concluded, “All is possible; Hansen has shown extraordinary patience and skill in maneuvering a difficult project to get this far, this fast. But now, there are people beyond the Mariners and the Port of Seattle who don’t want him to succeed; rich people who may like basketball in their town as much he likes his in Seattle.

“Getting back together with the ex is never easy. Much must be forgiven and forgotten. And the way forward may be harder still.”

Beyond getting one right (to balance my others), the point is that if there is a next time with NBA, the city and Hansen need to understand the historic friction with the league, which was further rubbed raw by Stern’s sly mendacity and manipulations over the past five months.

It is entirely possible that bygones will be gone with Stern’s Feb. 1 retirement. In the press conference that followed the owners’ 22-8 vote that denied relocation, the next commissioner, Adam Silver, made the primary remarks about a potential future relationship with Seattle.

But it was Stern who said, as he sat down, “This is going to be short for me. I have a game to get to in Oklahoma City.”

The information was needless, but entirely purposeful. It demonstrated that a hostile business environment can be created by both parties.

Seattle had the better plan. Sacramento had the better reason. And as difficult as were the Maloofs and the Sacramento arena situation, the term for it was exasperating, as opposed to adversarial. And now the Maloofs are gone. So, soon, will Stern.

Hansen and Silver need to have a beer. Alone. Off the record. On point. To turn the corner.


YourThoughts

  • Michael Kaiser

    And Seattle needs to recognize that Stern, and almost certainly Silver now as well, are not jeans and flannel shirts to a wedding types, or as I like to say, “The Seattle egalitarian raised in a barn look and attitude.” You don’t piss off real players like Stern and walk away from it. Period.

    • LennyLovesLonnie

      Too few have noted the NBA’s dress code. No “Casual Fridays” billionaire could possibly overcome it.

      • Leon Russell

        I thought Paul Allen owned the Trailblazers.

      • jafabian

        And aren’t these two among the richest in the world? And Paul Allen the richest owner in sport, owning the TrailBlazers, Seahawks and Sounders?

      • Choska

        Sigh. I wish Bill liked baseball half as much as we all like eradicating polio. Having the richest person in the world owning the Mariners would make Safeco look suddenly appealing to free agents.

  • Jared S.

    Then there was the history with the NBA. Not only did the state Legislature refuse in 2008 to re-purpose a tax revenue stream that would have combined with private money for a $300 million upgrade to KeyArena

    Stern wasn’t supportive of that, though. By then he was belligerently in Bennett’s corner and was helping him break the lease (in fact, his denunciation of that plan was one of the excuses Chopp used to not have a vote on it).

  • Jared S.

    I wonder if it bothered KJ when the Sacramento group that bought the Kings “took something that wasn’t theirs” from Kansas City.

    I find it kind of funny that “the power of incumbency” is so great when you’re talking about one of the most well-traveled franchises in sports.

  • inplaylose

    “The NBA will have a better chance to succeed in one-horse markets like
    San Antonio, Salt Lake, Portland, Oklahoma City and Sacramento.”

    I’ve never understood this argument. It certainly is a strange definition of success. The 7 most valuable franchises in the game have won 17 of the last 22 championships. That seems to make the success of San Antonio the exception, more than the rule. (And everyone agrees that the Spurs are impeccably run, maybe the best run franchise in sports. They were also dumb lucky twice in the lottery.) In truth, the NBA is more stratified than pretty much every other sport. Sure, the little guys have their moments here and there, but the fact of the matter is that, year in and year out, they can’t compete. That one-horse town model is more a myth than reality.

    “But with the NBA’s new collective bargaining agreement favoring owners
    with lower labor costs and better revenue sharing, the chance for
    succeeding in markets that define pro sports as a need, rather than an
    option, is greater.”

    If that’s true, then there shoudn’t be any need for extorting cities for new arenas in the future, should there? But somehow, I suspect that isn’t the case. And I suspect it’s not the bigger markets where that’s going to be happening, either.

    I do agree that this situation will be better once Stern leaves. Hansen and Silver do need to go for a beer and bury some hatchets. It was personal to him, both in terms of his adversarial relationship with Seattle and the league’s overabundant meddling in Sacramento arena affairs the past few years. When the commissioner has a pet project, he gets his way in the end. Unfortunately, a lot of those pet projects in sports – the New Orleans Hornets and Phoenix Coyotes come to mind – don’t seem to turn out very well. Too much ego and not enough good sense. We’ll see if Sac bucks that trend, but there is good reason for skepticism.

  • Leon Russell

    From a couple of weeks ago:

    BY Art Thiel 08:42PM 05/01/2013

    “Thiel: Here’s a solution for NBA. You’re welcome

    “Business and antitrust law say Hansen has a good argument for being allowed to buy the Kings. Here’s one way it could be win-win-win for all.”
    As I wrote in response at the time, you were presuming that the NBA had a problem, and it was possible that the NBA didn’t feel that they had a problem at all.
    Seems I may have been right. I don’t see any problems for the NBA from denying Hansen’s bid for the Kings’ relocation to Seattle.
    And your naïve assumption that the NBA was looking for a “win-win-win for all” outcome was pretty amusing. The only winner the NBA is concerned about is the NBA. As long as the NBA wins, they are not going to be worried about who loses.
    So, it looks like the NBA got what it wanted without following your advice, thank you very much. It is a win-win-win-lose outcome: Stern/NBA win; Sacramento wins; the Maloofs win; Hansen/Ballmer lose. Pretty much Stern’s perfect scenario.
    It was nice of you to offer Stern your advice, though.

  • jafabian

    I don’t have a lot of faith in Adam Silver. He’s Sterno’s hand-picked successor and as its been noted in many stories, Sterno knows what he’s doing. He does things for a reason and with that line of thinking he picked Silver because Sterno has confidence that Silver will continue his legacy which in part using Seattle as leverage to get other NBA cities in line with what the league wants which is free (as possible), state of the art arenas for their franchises. (Much like how the NFL uses LA) I guess these kinds of facilities will blind fans when the team the team is in a down year and having a 20 win season. Of course, that doesn’t explain why the Pacers finished 25th in attendance this season. Maybe Chris Hansen should go after them?

    I would actually respect the NBA a SLIGHT bit more if they came out and simply said that because of the passage of I-91 they don’t believe that Seattle is a viable market to invest in. But like with the OKC ownership group of the Sonics it was the way it was handled. Leading on fans with statements of regret on leaving Seattle, stating that its priority to return to Seattle, working with the Hansen group in what they would need to see happen, it comes across as all very calculating. Especially when it was Sterno who helped put together the competing bid against Hansen’s and kept publicizing the progress thru the media. I wonder if Hansen could do it all over again would he have gotten all parties to agree to keep all financial numbers private? Though Sterno would have simply ignored that and lie when questioned.

    The playoff in OKC comment was very telling. It showed Sterno’s disdain for Seattle. Even moreso was Silver’s lack of reaction. Did the comment not surprise him? Why is that? Did he support the jab or did he accept it as Sterno being Sterno? I agree it would be in Hansen’s best interests to have a meeting with Silver at some point, probably once he’s in office. Then he can see if it’s worthwhile to invest in bringing an NBA team to Seattle. If the owners mostly agree that relocation isn’t good for the NBA I don’t see them agreeing to expansion since that would dilute revenue sharing even more.

  • Will

    As if Seattle doesn’t have decay … Art, there’s no reason to be provincial; taking shots at another city isn’t necessary.