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Future of NBA arena subsidies, market comparisons to decide Kings’ fate

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As Sacramento Mayor Kevin Johnson has been advertising for the past month, we did indeed get confirmation of the identity of his ‘whales’ at his State of the City address on Thursday.

Reiterating parts of his four-part plan that included bringing together a local ownership group, finding big equity investors (whales), putting together a downtown arena deal, and demonstrating the value of the Sacramento marketplace – Johnson would announce that 24 Hour Fitness founder Mark Mastrov and billionaire Ron Burkle would put in a bid to keep the Kings in Sacramento.

“With all due respect to Seattle, I do hope they get a team someday, but let me be perfectly crystal clear, it is not going to be this team,” said Johnson.

Johnson also announced that former Kings great Mitch Richmond would join the local ownership group and that the city’s proposal would include an option to return WNBA basketball to Sacramento.

Sources close to the situation told PBT that the framework of the offer delivered to the NBA on Friday was very close to Seattle’s $341 million offer for a controlling 65 percent interest in the club. NBA spokesman Tim Frank confirmed delivery of the offer on Friday, the day of the deadline.

Over the next month Sacramento will continue to iron out the details on a public subsidy and arena deal locally with the Sacramento City Council, which will ultimately vote on a term sheet to be delivered to the Board of Governors in time for their April 18-19 meeting.

Sources tell PBT that the Sacramento offer will be conveyed by the group to the NBA’s joint committees in charge of reviewing the situation on or around April 1. It is expected that Seattle’s group will also meet with that committee around that time, though no meeting has been publicly acknowledged.

According to sources, the two issues that will drive the conversation is the league’s strategy for securing arena subsidies in the future, and the impact each market will have on team revenues and the league’s financial model as a whole. Also under consideration are timelines to deliver an arena, ownership groups, and the precedent the league could set by blocking an owner from selling to a group of their choosing.

The league blocked a sale of the Minnesota Timberwolves to a group headed by boxing promoter Bob Arum in 1994, but a well-placed source told PBT that the league views this transaction as “unprecedented,” citing that never before has the league relocated from a city that has supported its team both at the gate and with public subsidy dollars.

The Maloof ownership group reportedly has “little to no leverage” in NBA’s decision-making process. They also reportedly owe the NBA in excess of $100 million on a line of credit they’ve used throughout their ownership. If called in, the family’s financial woes could give the league an opening to use the ‘Best Interests of the League’ clause, similar to the way Major League Baseball removed Dodgers owner Frank McCourt.

Sources do not expect the Maloof family to push back on the league’s decision to back either Sacramento or Seattle, citing the prohibitive costs of an antitrust lawsuit, and the potential for the family to lose a chance to cash out in Sacramento or Seattle.

The issue of market comparisons between Sacramento and Seattle is cloudy, but sources expect Sacramento to be competitive in that area because it has one major sports team in their No. 20 TV market, while Seattle could have six major sports teams in its No. 12 TV market. We will cover this in a bit more detail later in the next few weeks.

While details about Sacramento’s ownership group are a bit hazy at this time, it has been expected that Mastrov would be the front man. The more private Burkle reportedly would focus on the development of the Downtown Plaza location. Sources indicate the duo will share in the ownership of a potential deal, though it’s unclear what those percentages will be. Both owners have been vetted by the NBA, and Mastrov finished second in the Golden State Warriors bid that recently went to the Joe Lacob group.

While Seattle’s Chris Hansen-Steve Ballmer group has enormous wealth, another well-placed source speaking to PBT under condition of anonymity said the league is happy with both ownership groups and not to expect a deal to hinge on any comparison between them.

If a showdown comes to the owners’ deciding vote, some sources hinted at a scenario in which the league tells the Hansen group that they’re going to choose Sacramento – allowing the Hansen group to bow out gracefully and avoid a divisive ownership vote.

Should the league favor Sacramento, sources say the work the city has done to fight for its team and the narrative it will give the league to sell to future cities in arena negotiations will have played a critical role in the NBA’s decision-making process.

Seattle’s deal contains a greater percentage of private funds due to local initiative-91 requiring public funds to return a guaranteed profit, which is a trend the league wants to avoid.  On the other hand, Sacramento’s deal fits the public-private model the league is selling to cities, with a larger public subsidy going toward a new state-of-the-art building in a downtown revitalization effort.

We will cover that issue in greater detail in the coming weeks.

In order to keep their team, Sacramento will need eight votes out of 29 other owners to block the transfer of ownership to Seattle’s Hansen/Ballmer group.

Alivin Gentry, you worried about being fired: “I really don’t give a s— about my job status”

NEW ORLEANS, LA - OCTOBER 26:  Head coach Alvin Gentry of the New Orleans Pelicans looks on as his team plays the Denver Nuggets at the Smoothie King Center on October 26, 2016 in New Orleans, Louisiana. Denver won the game 107-102. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms of the Getty Images License Agreement. (Photo by Sean Gardner/Getty Images)
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The Pelicans are disappointing this season — it is Anthony Davis vs. the world down there. Which is the main reason they are 7-16 this season. While things have gotten better since Jrue Holiday‘s return, Davis is averaging a league-best 31.4 points per game, it then drops off to Holiday at 15.4, and then E'Twaun Moore at 11.1.

When a team struggles, usually that is a bad sign for the coach. Not because it’s always their fault, but because GMs choose not to fire themselves for poor roster construction. Which leads to the question: Alvin Gentry, are you concerned about your job? (Warning, NSFW)

Gentry with classic coach-speak: Control what you can control.

New Orleans’ struggles are not on Gentry, certainly not completely. He’d like a roster that can play uptempo, that has depth. What he got instead was a good point guard, an elite 4/5, a rookie in Buddy Hield that maybe pans out down the line, and then… nada. And the roster Gentry has often is banged up.

If anyone is in trouble, it is GM Dell Demps. Remember, Danny Ferry was hired last summer for the vague role of “special advisor.” Gentry is in his second year, and the issue is the roster he was given. But the Pelicans are a patient organization that values continuity, so… who knows. But the clock is ticking on Davis;, it’s years away, but the Pelicans need to build a team around him and are far from that right now.

Cavaliers’ James Jones says he’ll retire after next season

CLEVELAND, OH - OCTOBER 25:  James Jones #1 of the Cleveland Cavaliers receives his championship ring from owner Dan Gilbert before the game against the New York Knicks at Quicken Loans Arena on October 25, 2016 in Cleveland, Ohio.   NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Ezra Shaw/Getty Images)
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James Jones has made a business of playing with LeBron James, and business is good.

Jones has ridden LeBron’s coattails to three contracts with the Cavaliers and appearances in five straight NBA Finals – the second-longest streak (behind LeBron’s six) outside the 1950s/60s Celtics:

But the 36-year-old Jones is preparing to retire.

Jason Lloyd of the Akron Beacon Journal:

Jones told the Beacon Journal he will retire after next season, which will be his 15th in the NBA. His ultimate dream is to ride off after three consecutive championships in Cleveland

“I know playing 15 years is a number where I can look back and I can be like, ‘I accomplished something,’ ” Jones said. “Fourteen vs. 15 may not be much, but to be able to say I played 15 years, that’s enough for me to hang ’em up.”

Jones’ contract expires after the season, so the Cavs will have a say in whether he returns. Safe to say if LeBron wants him back, Jones will be back.

But the Heat got into trouble relying on washed-up veterans around LeBron, wasting valuable roster spots on players who could no longer contribute.

Is that Jones? Not yet. Though he’s out of the rotation, he has still made 11-of-12 open 3-pointers this season. There’s a role for him as spot-up shooter when Cleveland needs one.

Still, the Cavaliers ought to be mindful of Jones’ likely decline over the next year and a half. Plus, it’s not a certainty he holds to his timeline. Cavs veterans have a history of changing their mind on retirement.

PBT Extra: What did Phil Jackson think he would accomplish with shot at ‘Melo?

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Phil Jackson wants us to know Carmelo Anthony can hold on to the ball too long and stall out the offense.

Shocking. Such a revelation. It’s not like he knew that when he gave Anthony a five-year contract extension… oh, wait, everybody did know that already.

Which leads to my criticism of Jackson in this PBT Extra. Taking a shot at a player as a coach who sees said player every day comes off differently than the same thing from the ivory tower criticism of a GM. Plus, Jackson’s timing made no sense.

Carmelo Anthony says Phil Jackson’s comments “temporary black cloud over our heads”

NEW YORK, NY - DECEMBER 07:  Carmelo Anthony #7 of the New York Knicks and the rest of the bench react to the loss to the Cleveland Cavaliers at Madison Square Garden on December 7, 2016 in New York City. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this Photograph, user is consenting to the terms and conditions of the Getty Images License Agreement  (Photo by Elsa/Getty Images)
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The New York Knicks were on a four-game winning streak, they have looked like a potential playoff team in the East, team chemistry has been pretty good, and there seemed to be more sun shining on Madison Square Garden then we have seen in a few years.

So Phil Jackson decided that was a good time to a CBS Sports Show and take a shot at Carmelo Anthony, saying he could play the MJ/Kobe role, but he holds the ball too long on offense. Anthony wouldn’t comment on the shot at the time, then took to Instagram to express his frustration and displeasure.

How do we know for sure it was aimed at Jackson? Because on Friday Anthony said so, adding that Jackson’s comments were unnecessary. Here is what ‘Melo said, via Stephan Bondy of the New York Daily News.

“At the end of the day we’re playing good basketball,” Anthony said. “That’s the only thing that matters at this point. So any negativity that’s coming towards me or towards the team, I don’t think we need it at this point…

“I feel like we’re playing good basketball, and just to have a temporary black cloud over our heads,” he said. “I don’t know when the comments were made or the gist of them, I just know something was said.”

Anthony is spot on here. Jackson isn’t wrong that Anthony can hold the ball too long, but Jackson knew that when he gave Anthony a five-year contract extension. Also, the Sports VU camera data shows Anthony is holding the ball less and dribbling a little less than previous seasons.

But the real question: What did Jackson think he would accomplish with this? He’s too smart, too calculated — he doesn’t just say things to the press without a motive. But with everything going about as well as one could hope with the Knicks, and with Anthony not at a point in his career he’s going to change his game, what’s the point?

Anthony has a right to be ticked.