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.

Cleveland GM David Griffin: “I hope everybody says we have no chance”

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The Golden State Warriors are heavy favorites to win the NBA title. According to bovda.lv, bet $100 on the Warriors to win the title and you get $41.7 dollars. Bet $100 on the Cavaliers and you get $200. And that number is likely to get worse for Warriors fans.

The Cavaliers are okay with that. They like being the underdogs. Look at what GM David Griffin said in a televised interview after they eliminated the Celtics in Game 5, via Cleveland.com.

“I hope everybody says we have no chance,” General Manager David Griffin said during a TV interview following the Cavaliers’ 135-102 win Thursday night against the Boston Celtics, clinching a third straight NBA Finals appearance.

“Obviously the team we’re playing is as good as you can possibly put together, it’s going to be an unbelievable battle for us, but I think [the Cavs] love battling together. The greater the odds, the better we seem to play together. We really do rally around each other in that sense.”

There is some truth to that.

There’s also a difference between that truth and slowing Stephen Curry and Kevin Durant. How the Cavaliers are going to do that will be the interesting part of these playoffs.

Detroit’s Van Gundy honored for cooperation with media, fans

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AUBURN HILLS, Mich. (AP) — Stan Van Gundy of the Detroit Pistons has won the Rudy Tomjanovich Award, which honors an NBA coach for his cooperation with media and fans, as well as excellence on the court.

The Professional Basketball Writers Association announced the winner Friday. Van Gundy was one of five finalists for the award. The others were Steve Clifford of the Charlotte Hornets, Mike D’Antoni of the Houston Rockets, David Fizdale of the Memphis Grizzlies and Brad Stevens of the Boston Celtics.

Dwane Casey of the Toronto Raptors won the award last season.

No surprise: It’s Cavs-Warriors in the NBA Finals, again

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OAKLAND (AP) — Here they go again.

For the third straight year, it’s Cleveland and Golden State in the NBA Finals. The 2016 champions versus the 2015 champions . The first “threematch” – rematch of a rematch – in league history. It’s the matchup most expected, the matchup most predicted, and probably the matchup the Cavaliers and Warriors wanted as well.

Let the hype, and the waiting, begin: Game 1 isn’t until June 1.

“I’ve been very blessed the last few years to be a part of this league and play on the big stage,” said Cleveland star LeBron James, who has now reached the Finals for the eighth time – including each of the last seven years. “But we’re going to enjoy this for a couple more days before we have to lock in on that juggernaut out west.”

The Cavaliers and Warriors split their two meetings this season, both winning at home. Cleveland won by one on Christmas Day, Golden State prevailed by 35 on Jan. 16.

Golden State led the league with 67 wins this season and is a staggering 27-1 in its last 28 games – including a perfect 12-0 in the Western Conference playoffs, the first time a team has gone this deep into an NBA postseason without losing. Cleveland, which seemed sleepy at times in the regular season, went 12-1 in the Eastern Conference playoffs that ended with a win over Boston on Thursday night.

“Playing in this league, you can’t take anything for granted,” Warriors guard Stephen Curry said. “Thirty teams suit up every year trying to get to this point, and only two teams do. So you have to appreciate it. … We need to understand the privilege that we have and the opportunity that we have to play in the Finals again, to have the opportunity to win a championship.”

Already, the back-and-forth is underway.

Cleveland coach Tyronn Lue was quoted earlier this week saying he thought Boston’s offense was “harder to defend” than Golden State’s. Countered Golden State acting coach Mike Brown, when asked about it Thursday: “That’s his opinion. It’s cute.”

And there will be reminders of the Halloween party that James threw for the Cavaliers last fall, with “3-1 Lead” – a nod to what the Warriors lost in last year’s Finals – prominently displayed on the drum set.

Much more of that sort of that will likely follow over the next week, filling time before Golden State plays host to Game 1. But there’s also a clear respect level between the clubs as well.

“The best team in our league the last three years,” James said of the Warriors. “And they’ve added an unbelievable player in Kevin Durant this year. So it makes it even more difficult. They’re going to challenge us a lot, offensively, defensively, mentally, physically. We have to be ready for the challenge.”

For James, the Finals are an annual rite.

For Durant, this trip ends a five-year wait.

Durant’s only other time in the Finals was 2012 when he was with Oklahoma City. The Thunder lost to Miami in five games, a series that made James a champion for the first time.

At the very moment where the clock ran out in that series, the person James was embracing was Durant – telling the then-Thunder star, his offseason workout partner at the time, how proud of him he was.

“Hopefully,” James said that night, “I don’t continue to have to run into him.”

They’ll collide again, starting next week.

Durant’s decision to leave the Thunder for Golden State as a free agent last summer meant the Warriors went from mere overwhelming favorites to win the West again to super-duper-overwhelming favorites to win the West again. They got a big scare in late February when Durant had a left knee injury, but he’s back and the Warriors have rolled since.

“It’s a little different, definitely. I can’t lie,” Durant said, when comparing the 2012 Finals trip to this one. “I went when I was 23 years old, and it felt like the Western Conference Finals was almost like the championship. Just getting to that point, you know how hard it is and how much work you put in to start the season. So it’s a little different now, obviously. We have a bigger goal in mind.”

The storylines are many. Can James win his fourth ring? Can Durant win his first? Will the Warriors be haunted by letting last season’s 3-1 lead slip away? Will they become the first team in NBA history to go undefeated in a postseason? How will Golden State guard Kyrie Irving? How will Cleveland try to contain Curry?

There’s also the irony that Brown, the first coach who took James to an NBA Finals in 2007 – Cleveland was swept by San Antonio – will now coach against him, likely in the same leading role he’s had for Golden State since head coach Steve Kerr was forced to take a break because of continued problems with his surgically repaired back.

“I don’t care who you’re playing, to make it to the NBA Finals, to win your conference finals, it’s a big task,” Brown said.

The biggest task awaits.

Isaiah Thomas wants Celtics to sign free agents, reportedly they are not looking to trade him (yet)

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The Boston Celtics made a huge leap forward this season: They got the No. 1 seed in the East and made it to the Eastern Conference Finals. For a team on the rise, that’s impressive.

However, as soon as they landed the No. 1 pick in this draft, a big question started to bubble up:

What is the future of Isaiah Thomas with this team? Which is a strange thing to say about a guy who averaged 28.9 points per game and was All-NBA this season, but here we are.

First, the Celtics are not looking to trade IT this summer as some have suggested, reports Sean Deveny of the Sporting News.

That starts with All-Star Isaiah Thomas, whose name has lately been the subject of trade speculation. But league sources indicate that any talk of dealing Thomas is strictly speculation at this point — the Celtics have had no such discussions. Not yet, at least.

The challenge for the Celtics seems to be this: If they draft Markelle Fultz No. 1 (as is expected by everyone around the league), then what is the future for Thomas? Do you want to pay Thomas max money just as he turns 29 when you have a stud young point guard coming up behind him?

That led to talk of extending Thomas this summer with the team’s cap space (which assumes they do not sign Gordon Hayward). Except Thomas would rather the money be spent on free agents than himself, as he told Chris Forsberg of ESPN.

“We need the best possible player that’s gonna help us win, and I’m with that,” said Thomas. “Anything Danny and this organization need me to do to help bring even more talent to this city, I’m all for that. I want to win a championship and being so close to getting to the Finals, that makes you want it that much more.

“I’m all help if they need it. I’ll be around.”

Nothing is certain in the NBA, but here is the most likely outcome of the Isaiah Thomas situation: They keep him, they draft Markelle Fultz, they do not extend Thomas (whether they land Hayward or not), and they see how it all fits together for a season. Then they make a decision on Thomas in the summer of 2018. The bottom line is he may well have more value to the Celtics than another team, and while he’s certainly getting a raise from the $6.3 million, he will make next season he may fall short of the max, and in a zone where the Celtics are willing to keep him.

In pure basketball terms, the Celtics may be hesitant to spend on Thomas, but he is also the most popular player on the team by a mile. Letting him go is not that simple.

There are a lot of questions to be answered between now and next summer when it comes to IT.