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


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.

Byron Scott isn’t thinking about next year’s draft

Byron Scott
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A month into the season, the Lakers the only team in the Western Conference that can absolutely be written out of any hopes of playoff contention. They’re in an awkward position with the upcoming draft: they still need talent long-term, and they owe their pick to the Sixers if it’s outside of the top three. Not surprisingly, Byron Scott isn’t thinking about it at all.

Via Mark Medina of the Los Angeles Daily News:

With the Lakers fielding the NBA’s second-worst record, how much effort will the franchise put in retaining its top-3 protected draft pick?

“I don’t think about that whatsoever,” Lakers coach Byron Scott said. “I probably won’t until April. That’s something I can’t control.”

The Lakers are in a precarious position. They appear likely bad enough to lose a lot of games. But will they lose enough to land in the top three? Otherwise, the Lakers owe Philadelphia their first-round pick as part of the Steve Nash trade.

“It’s impossible to think about the team, try to get our young guys better, the team better and also thinking about a pick,” Scott said. “That’s six months away and you might not even get it.”

Given Scott’s mentality, it’s not at all surprising that he isn’t thinking about the draft. But with his insistence on playing Kobe Bryant and Lou Williams more crunch-time minutes on this dismal Lakers team than D'Angelo Russell and Jordan Clarkson, it’s pretty laughable that he talks about wanting to develop their young players.

Scott may not be thinking about the draft, but with the position the franchise is in and the likelihood that they lose their pick, he should be.

Report: Jahlil Okafor stopped for driving 108 MPH three weeks ago

Jahlil Okafor, Derrick Favors

Jahlil Okafor‘s first month in the NBA has been eventful for all the wrong reasons. Early Thanksgiving morning, he was caught on video getting into a fight with a heckler in Boston. Then, a report surfaced of another altercation from October, in which Okafor apparently had a gun pulled on him. Now, Keith Pompey of the Philadelphia Inquirer reports that Okafor was recently pulled over in Philadelphia for driving 108 miles per hour:

Four sources independently confirmed to The Inquirer the 76ers center was pulled over on the Ben Franklin Bridge around three weeks ago for 108 miles per hour. Anything over 40 m.p.h. is considered reckless driving.

108 miles per hour in a 40-mile zone isn’t a minor speeding infraction—it’s incredibly dangerous. It might be possible to write off any of these incidents by themselves—particularly the one where he had a gun pulled on him, which doesn’t seem to have been his fault at all. But together, the Boston incident and this speeding report aren’t a good look at all for Okafor. He’s had a solid start to the year for the Sixers, but off the court has been another story.

Harrison Barnes could be out “a few weeks” with ankle injury

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The Warriors’ Friday night 135-116 win over the Suns was bittersweet: Harrison Barnes suffered a sprained left ankle in the third quarter and left for the remainder of the game. He missed Saturday night’s blowout win over the Kings as well, which extended the Warriors’ best-ever start to the season to 18-0.

Warriors interim head coach Luke Walton didn’t have an answer for how long Barnes will be out, but he said it could be a few weeks.

Via’s Ethan Sherwood Strauss:

“He’s being evaluated [Saturday]. We haven’t gotten the results back yet,” interim head coach Luke Walton told reporters before Saturday’s game. “It’s all speculation. It could be a few weeks. It could be a week.

“We’re not going to rush him back because we want to be healthy for later in the season and we don’t want lingering injures, so we’ll have him take his time.”

Losing a starter is never good news, but the silver lining for the Warriors is that they have enough depth and enough of a cushion to be able to take their time and not rush Barnes back. Saturday night, Walton opted to keep Andre Iguodala in his usual sixth-man role and instead start the little-used Brandon Rush in Barnes’ place. Rush responded with a 16-point performance, shooting 4-of-5 from the three-point line. If they can keep getting that kind of production out of their reserves, the Warriors will be able to withstand the loss of Barnes just fine.

Emmanuel Mudiay with the no-look, behind-the-head assist (VIDEO)

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Emmanuel Mudiay is still a work in progress on the court — he’s a rookie, what did you expect? — but he has the court vision and flair you cannot teach.

As evidence, I present this pass from Saturday night, where in transition Mudiay goes with the no-look, behind-the-head dish to Darrell Arthur for the dunk.

The Nuggets dropped this game to the Mavericks 92-81 and have lost six in a row.