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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.

Dave Joerger: Kings will play more small ball

Sacramento Kings head coach Dave Joerger talks to reporters during the Kings basketball media day Monday, Sept. 26, 2016, in Sacramento, Calif. Joerger, who was fired by the Memphis Grizzlies at the end of last season, was hired by Kings to replace George Karl, who was fired by the Kings.(AP Photo/Rich Pedroncelli)
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Shortly after the Kings chose center Georgios Papagiannis with the No. 13 pick in the draft, DeMarcus Cousins tweeted, “Lord give me the strength.” Sacramento already had an abundance of centers with Cousins, Willie Cauley-Stein and Kosta Koufos. If Cousins wasn’t talking about yoga, Sacramento adding center Skal Labissiere with the No. 28 pick would’ve driven Cousins batty.

At least Kings coach Dave Joerger is accustomed to using two bigs, as he did with Marc Gasol and Zach Randolph in Memphis.

Joerger, via Cowbell Kingdom:

I anticipate us playing a lot more small ball this year.

I’m not playing big.

Oh.

This is going to lead to some unhappy campers in Sacramento. It won’t be Cousins (not for getting his role reduced, at least). But this will make it hard for Cauley-Stein and Koufos to get satisfactory playing time. It’ll also make it harder for Papagiannis and Labissiere to get minutes to develop.

Like with most things, winning is the best way to quash griping. The Kings have enough wings – Rudy Gay, Matt Barnes, Arron Afflalo, Omri Casspi, Ben McLemore, Garrett Temple and Malachi Richardson – to theoretically play small effectively. If Joerger goes that route, he better find success with it. Otherwise, he could get plenty of heat – including from general manager Vlade Divac, who spoke incredibly highly of his first-round picks, the players most likely to get squeezed out of a small-ball rotation.

Dwane Casey: Jared Sullinger has Raptors’ starting PF job to lose

BOSTON, MA - NOVEMBER 05: Jared Sullinger #7 of the Boston Celtics drives to the basket against Patrick Patterson #54 of the Toronto Raptors in the first half at TD Garden on November 5, 2014 in Boston, Massachusetts. 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 Mike Lawrie/Getty Images)
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Last year, Patrick Patterson declared the Raptors’ starting power-forward job his to lose.

Well, he lost it.

Luis Scola started most of the regular season before Toronto tinkered in the playoffs. Patterson claimed the job. Then, the Raptors turned to DeMarre Carroll with Norman Powel in a small-ball lineup. Finally, Toronto reverted back to Scola.

A year later, there’s still no clear, great option at the position. Scola went to the Nets. Patterson returns. Pascal Siakam and Jarrod Uthoff are rookies. First man up: Newly signed Jared Sullinger.

Raptors coach Dwane Casey, via Doug Smith of the Toronto Star:

“I would say Sullinger is the guy now that it would be his to lose, but I reserve the right to change my mind,” Casey said, citing the need to see how that group reacts defensively.

If Sullinger’s bar is defensive, he’ll have a tough time clearing it. He neither protects the rim nor moves well on the perimeter – making him similar to Scola. But Scola got the job last year with similar contributions.

Sullinger rebounds well, and he has some shooting range, though he hasn’t been selective enough with it.

Patterson’s ability to defend the pick-and-roll might make him a better fit next to Jonas Valanciunas, especially if Patterson has confidence in his 3-point shot.

There should be a place for Sullinger in the rotation, but if he’s starting at power forward, that speaks to a lack of quality options.

Report: Cavaliers giving championship rings to 1,000+ workers

CLEVELAND, OH -  JUNE 20: The Cleveland Cavaliers mascot Moon Dog cheers on the fans prior to the arrival of the Cavs players return to Cleveland after wining the NBA Championships on June 20, 2016 in Cleveland, Ohio. (Photo by Jason Miller/Getty Images)
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The Cavaliers will reportedly give David Blatt a championship ring, and Anderson Varejao also has one available.

They aren’t the only two unexpected ring recipients.

Joe Vardon of Cleveland.com:

Majority owner Dan Gilbert and his partners decided to present rings to more than 1,000 full and part-time employees throughout the Cavaliers and Quicken Loans Arena organization, employees who’ve been fitted for rings told cleveland.com.

A conservative cost for distributing rings to employees is more than $1 million.

This is very cool by Gilbert. Obviously, lower-level team employees won’t receive the same blinged-out rings the players get. But this is a nice way to reward their hard work.

Not to go all Jerry Krause, but organizations win championships. Some pieces – LeBron James – matter much more than others, but everyone plays a part. Security guards keep players safe, preventing a dreadful incident that could derail a playoff run. Public-relations staffers ease the burden on players. Ushers improve the fan experience, which increases revenue and helps Gilbert afford a massive luxury-tax bill.

It all adds up, as Gilbert clearly recognizes.

Mike D’Antoni: Kobe Bryant and Carmelo Anthony rejected my system, but new (old) approach with James Harden

LOS ANGELES, CA - NOVEMBER 20:  Head coach Mike D'Antoni of the Los Angeles Lakers celebrates with Kkobe Bryant #24 and Pau Gasol #16 after the game against the Brooklyn Nets at Staples Center on November 20, 2012 in Los Angeles, California. The Lakers won 95-90.   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 Stephen Dunn/Getty Images)
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I can’t understate how revolutionary Mike D’Antoni’s offense looked with the Suns. In his first full season, 2004-05, they scored 110.4 points per game – the most anyone had scored in a decade. And it wasn’t even close. Phoenix played fast and scored efficiently.

That offense eventually got D’Antoni jobs in the NBA’s biggest markets and with two of the league’s best scorers, Carmelo Anthony (Knicks) and Kobe Bryant (Lakers).

Ian Thomsen of NBA.com:

But his coaching relationships with Anthony and Kobe Bryant in Los Angeles did not turn out so well. The last two stars essentially rejected his system.

“They did,” acknowledged D’Antoni. “And they were paid 20-something million dollars for it — they were successful. So I don’t blame them. Nothing’s been proven up to that point.”

The Warriors had yet to show that D’Antoni’s offense could thrive in late May and June.

“They’re thinking, like, he’s crazy,” D’Antoni said of Anthony and Bryant. “So I don’t blame them at all. This is a much better situation.”

With the Knicks and Lakers, D’Antoni edged back from his own offensive principles in part because he wasn’t sure, either. He was in a lonely place as the proponent of a style that was rejected by NBA fundamentalists. In New York and L.A., D’Antoni lacked the proof that would be provided years later by the Warriors of Kerr, who when serving as GM of the Suns had himself objected to D’Antoni’s point of view. The inventor didn’t believe fully in his own invention.

“I wasn’t that confident,” D’Antoni insisted. “It was a little bit before analytics. Everybody was telling us that we couldn’t do it, no one was telling us we could. Analytics came in and said, hey, you can do this — this is good, actually. So now you’ve got (GM) Daryl Morey with the Rockets and how they play and different teams trying to do it, and now it’s kind of caught on.

This bucks the narrative that D’Antoni’s offense can’t work with a score-first star. If D’Antoni compromised his scheme for Kobe and Melo, we haven’t yet seen it full bore with a player like that.

We will this season in Houston, where D’Antoni has turned score-first James Harden into the Rockets’ point guard.

As D’Antoni said, it’ll be easier to sell his scheme now that it has been proven to work. But as other teams adopt elements of it, he’ll have less of a strategic advantage.

The best coaches have revolutionary ideas AND get their players to buy into them. D’Antoni’s methods are no longer as cutting-edge, but he’ll have an easier time selling his players. That’s a justifiable knock on D’Antoni’s overall coaching prowess, but he still brings positives.

We’ve seen D’Antoni’s system at full throttle, and we’ve seen him coach generational scorers. To get both simultaneously will be a fun experiment in Houston this year.