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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.

WNBA rescinds fines regarding protest shirts

FILE - In this Wednesday, July 13, 2016 file photo, members of the New York Liberty basketball team await the start of a game against the Atlanta Dream in New York. The WNBA is withdrawing its fines for teams and players that showed support of citizens and police involved in recent shootings by wearing black warmup shirts before and during games. WNBA President Lisa Borders said in a statement Saturday, July 23, the league was rescinding penalties given to the Indiana Fever, New York Liberty, Phoenix Mercury and their players for wearing the shirts–which was a uniform violation. The players started wearing them to show solidarity after shootings in Minnesota and Baton Rouge, La. (AP Photo/Mark Lennihan, File)
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LeBron James, Kyrie Irving, and a number of Cavaliers and Brooklyn Nets players wore “I can’t breathe” T-shirts in warmups after the death of Eric Garner in New York. LeBron and his then Heat teammates wore hoodies for a photo shoot after the Travon Martin shooting. NBA players have made other protest fashion statements, with no repercussions from the league.

But when WNBA players wore black warmup shirts in support of Black Lives Matter and other anti-violence protests, the WNBA came down with fines for the Indiana Fever, New York Liberty and Phoenix Mercury ($5,000) and players involved ($500) for uniform violations. That led to a lot of backlash — including among WNBA players. Some refused to answer basketball questions with the media after recent games.

Saturday, the WNBA rescinded the fines. As they should have.

The women’s players’ union supported the move, via a statement from the director of operations Terri Jackson.

“We are pleased that the WNBA has made the decision to rescind the fines the league handed down to the players on the Fever, Liberty, and Mercury. We look forward to engaging in constructive dialogue with the league to ensure that the players’ desire to express themselves will continue to be supported.”

I want a league — for men or women — where player’s individuality and statements can be made — I don’t want the NBA to be the button-down, cookie cutter NFL. Let the players be themselves. And if players want to weigh in on the biggest social issue of our time, they should. Without fear of repercussion.

Good on the WNBA for coming around to that.

Meyers Leonard says he hopes to be ready by start of Blazers’ season

CLEVELAND, OH - DECEMBER 8: Meyers Leonard #11 of the Portland Trail Blazers takes credit for a foul call during the first half against the Cleveland Cavaliers at Quicken Loans Arena on December 8, 2015 in Cleveland, Ohio. (Photo by Jason Miller/Getty Images)
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Meyers Leonard could be poised for a big season in Portland. His minutes jumped last season because he provided spacing. With Portland adding Evan Turner on the wing to go with Damian Lillard and C.J. McCollum, any big who can stretch the floor is going to get run, and Leonard has turned himself into a stretch four.

Leonard just hopes he can show what he can do at the start of the season — he’s still recovering from shoulder surgery. Here is what he told the Associated Press.

“My hope is to be ready right around the start of the season,” he said. “It’s a progression, first introducing rebounding, grabbing stuff overhead, then one-on-one, three-on-three, extending to the full court. We’ll see. You just never know.”

Leonard had surgery to repair a torn labrum in his left shoulder in April (they could have used him in the playoffs), and the timeline then was to have him back around the start of the season. Before he was shut down, he proved enough to get a four-year, $41 million contract extension with the Trail Blazers this summer.

The Trail Blazers will start Al-Farouq Aminu at the four, and Moe Harkless can certainly play there too (I’m far less sold on the future of Noah Vonleh). Leonard wants to get back before someone starts to steal any of his minutes.

Pelicans sign Jones for 1 year, Frazier for 2 years

HOUSTON, TX - DECEMBER 21:  Terrence Jones #6 of the Houston Rockets reacts to a play as Cody Zeller #40 of the Charlotte Hornets looks on during their game at Toyota Center on December 21, 2015 in Houston, Texas. 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 Scott Halleran/Getty Images)
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NEW ORLEANS (AP) The New Orleans Pelicans say they have signed free-agent forward Terrence Jones and re-signed guard Tim Frazier.

A person familiar with the negotiations says Jones, a four-year veteran, signed a one-year deal Friday for the NBA minimum of about $1.14 million, while Frazier has signed a two-year deal worth about $4.1 million. The person spoke to The Associated Press on condition of anonymity because the Pelicans have not released contract terms.

The 6-foot-9 Jones, who was Anthony Davis‘ teammates on Kentucky’s 2012 national championship team, has spent his first four NBA seasons with Houston, posting career averages of 10.4 points and 5.8 rebounds.

Frazier played in 16 games for New Orleans late last season, averaging 13.1 points, 7.5 assists, 4.4 rebounds and 1.4 steals in 29.3 minutes per game.

Deron Williams says he is recovering well from sports hernia, will be ready to go at camp

DALLAS, TX - MARCH 01:  Deron Williams #8 of the Dallas Mavericks during the first half at American Airlines Center on March 1, 2016 in Dallas, Texas.   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 Ronald Martinez/Getty Images)
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Deron Williams will be back with the Dallas Mavericks next season — and be ready to go by the start of the season.

He’d like to say he’d be back for the next few seasons, but coming off a Sports Hernia injury his options were a little limited. However, his recovery is going well he told NBC Dallas in an interview from American Century Championships celebrity golf tournament in Lake Tahoe (which you can watch this weekend on NBC).

“Feeling really good. It’s healing pretty well, I’m doing a lot of work on and off the court. I haven’t got the full-go clearance yet, but that’s coming soon. I’ll be ready to go definitely by the time training camp rolls around.

“I’m running, I’m jumping a little bit. I’m just not going crazy. I kind of have to wait for August 1 for that, to go see the doc and get the go ahead. But it’s not much restriction right now.”

Williams averaged 14.1 points and 5.8 assists per game for the Mavericks last season and was solid at 32. His efficiency slipped a little (to be expected as he is on the wrong side of 30 and has plenty of miles) but he played well for Dallas.

Dallas signed him to a one-year, $10 million deal. Williams was hoping for a little more security.

“I was happy to come back. Would have liked a little longer deal but I’m back for one year and hopefully can build on last year and improve. I think there’s room for a lot of improvement. Hopefully I can stay healthy. I think that’s the biggest key but I’m excited about this year and this team.”

The one-year deal is more about Dallas than Williams — they could see a significant shift in plans when Dirk Nowitzki steps away (he inked a two-year deal but the second year is only $5 million guaranteed, so he could be in his final run if he wants).

Dallas added Harrison Barnes and Andrew Bogut from the Warriors to a starting five that also includes Nowitzki, Williams, and Wesley Matthews. If they can stay healthy — no little thing with that group — it’s a quality starting five that coach Rick Carlisle is going to love.