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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.

PBT Extra: Who do you want to see most in first All-Star Game?

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Tonight the NBA All-Star Game starters will be announced. Then the coaches have a week to vote and the rest of the roster will be put together by them.

This year should see a few first-time All-Stars, guys bursting on the scene and grabbing fans attention — so we asked people on Twitter who they most wanted to see in his first All-Star Game and I break it down in this PBT Extra.

The winner? Giannis Antetokounmpo with 45 percent of the vote. Which shouldn’t be a surprise, he’s second in the fan voting for the frontcourt in the East (behind only LeBron James). Good news for those fans, the Greek Freak is almost guaranteed to be a starter, he’s getting plenty of media votes and likely a lot from the players as well.

Second place in the poll? Joel Embiid of the Sixers. I’d love to see him, but will players and media members vote in a guy on a minutes restriction? Will the coaches pick him for that same reason? He is on the bubble.

Russell Westbrook: ‘Don’t say what’s up to that b— a—’ (video)

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Did Russell Westbrook and Kevin Durant talk during the Warriors’ win over the Thunder last night? Westbrook said no, though video and first-hand accounts indicate otherwise.

Even more clearly: Westbrook – who walked near teammates Enes Kanter, Anthony Morrow and Jerami Grant – didn’t want someone talking to someone as they left the floor after the game. ESPN caught Westbrook saying, “Don’t say what’s up to that b— a—.”

You will never convince anyone Westbrook is referring to anyone but Durant.

Russell Westbrook commits epic travel (video)

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Between getting laid out by Zaza Pachulia and apparently talking with Kevin Durant, Russell Westbrook committed a travel for the ages.

The Thunder guard took an inbound pass against the Warriors and just started walking up court without dribbling. The violation was so blatant, NBA officials even called the travel.

And it’s not as if they’re inclined to blow a whistle in that situation. Before Westbrook, Kemba Walker set a high bar last season, but he got away with this walk:

Are Russell Westbrook and Kevin Durant on speaking terms after apparent conversation? Westbrook: ‘Nah’ (video)

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Russell Westbrook deleted Kevin Durant‘s goodbye text and, months later, told the whole world they still hadn’t talked.

That apparently changed during the Warriors’ win over the Thunder yesterday – though not if you ask Westbrook.

Westbrook dunked in the third quarter, and according to ESPN commentator Mark Jackson, Westbrook told Durant, “Don’t jump.” Anthony Slater of The Mercury News also wrote of the same quote.

ESPN’s telecast caught Durant clearly speaking to Westbrook shortly after. It appears Westbrook is talking back, but his back is to the camera.

After the game, Westbrook denied the exchange:

 

  • Reporter: “Are you and KD on speaking terms?”
  • Westbrook: “Nah.”
  • Reporter: “You guys had a little exchange in the third quarter.”
  • Westbrook: “What exchange?”
  • Reporter: “You and KD said something to each other.”
  • Westbrook: “Oh. You gotta maybe sit closer to the game. You maybe didn’t see clearly.”

This is so Westbrook – stubborn to the point of denying reality.

That approach worked for him when everyone rightly told him he was a significantly lesser player than Durant. Westbrook ignored that fact until it became false.

I suspect he wants to forget this exchange so he can maintain a cold animosity toward someone he prefers to resent.