Owners reject Kings’ move to Seattle
NBA owners voted Wednesday to reject the Sacramento Kings’ proposed move to Seattle, the latest in a long line of cities that have tried to land the franchise.
The 22-8 vote followed a recommendation made last month by the NBA’s relocation committee and may have finally brought an end to an emotional saga that has dragged on for nearly three years.
A group led by investor Chris Hansen had a deal to buy the team. Hansen hoped to move the franchise to Seattle and rename it the SuperSonics. The original Sonics were moved to Oklahoma City in 2008 and were renamed the Thunder.
Commissioner David Stern said the league will spend the next 24 to 48 hours talking to the Maloofs, the team’s owners, about working out a deal with a competing ownership group in Sacramento.
”The big winner here was Sacramento,” Stern said.
The Maloofs reached an agreement in January to sell a 65 percent controlling interest in the team to Hansen’s group at a total franchise valuation of $525 million, topping the NBA-record $450 million for Joe Lacob and Peter Guber to buy the Warriors in 2010. Then Hansen increased his offer to $550 million, which implies buying the 65 percent stake for about $357 million.
Following the relocation committee’s unanimous recommendation on April 29 to deny the move to Seattle, Hansen and Microsoft CEO Steve Ballmer dug deeper into their pockets in a final attempt to sway the NBA Board of Governors. They raised the valuation of the Kings to $625 million, or $406 million for the Maloofs’ interest in the franchise, and offered a $115 million relocation fee, nearly four times what Clay Bennett paid to move the Sonics.
Hansen’s group also guaranteed owners that the franchise would pay into the league’s revenue-sharing system in Seattle and not collect money as it has in Sacramento.
They were aggressive and bold public statements that had been lacking from the Seattle group through much of the process while Sacramento openly made its case in the public eye.
As a backup, the Seattle group negotiated a plan to buy a minority stake in the Kings with the Maloofs retaining majority ownership and keeping the team in Sacramento.
Stern said the Board of Governors considered the $625 million offer from the Seattle group and that the competing Sacramento group had matched the original offer of $525 million for the Kings.
”It’s my expectation that we’ll be able to make a deal with the Maloofs and the (Vivek) Ranadive group to transfer title of the team in Sacramento. It’s not a certainty but we’re going to work for that result,” Stern said.
It’s the second time since 2011 that the Maloof brothers have made plans that would have ended in relocation for the Kings. The first target was Anaheim, Calif., but Sacramento Mayor Kevin Johnson, a former All-Star guard, convinced the NBA to give the city another chance to finance a new arena.
Johnson delivered on a promise for a plan for a new downtown arena with help from Stern, but the Maloofs backed out, saying it didn’t make financial sense.
The Maloofs had another surprise when they announced a deal with Hansen’s group, which includes Ballmer and members of the Nordstrom department store family.
Johnson fought back again, this time lining up an ownership group led by TIBCO software chairman Vivek Ranadive and getting the Sacramento City Council to approve a non-binding financing plan for a $447 million arena with a $258 million public subsidy.
The potential Sacramento ownership group also includes 24 Hour Fitness founder Mark Mastrov, former Facebook senior executive Chris Kelly and the Jacobs family that owns communications giant Qualcomm.
Seattle has been without an NBA franchise since the SuperSonics moved. Led by star Kevin Durant, the Thunder have made the playoffs four straight seasons, reached the Western Conference finals in 2011 and lost to Miami in last year’s NBA finals.
The NBA’s relocation committee, coincidentally headed by Bennett, voted unanimously last month to reject the bid to move the Kings.
In a letter sent to the relocation and finance committees during its April 17 meeting, the Maloofs said they preferred to sell to the Seattle group and expressed discontent with Sacramento’s latest bid, saying it falls ”significantly short.”
Stern has said the offers are in ”the same ballpark,” and has reiterated his long-held stance that expansion is unlikely right now.
Hansen spent nearly two years working to get an arena plan approved by the city and county governments and spent more than $65 million buying land in Seattle’s SoDo neighborhood where the arena would be built. Hansen has a five-year memorandum of understanding with the city and county on the arena plan.