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.

Report: Warriors “perplexed” by Kevin Durant’s offseason fighting old battles

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Kevin Durant made his move to Golden State last summer — it was an emotional, wrenching decision for him — and it went as well as he could have dreamed. He felt at home. He’s got a ring (or will have one on opening night), he was Finals MVP, and he not only strengthened his legacy with a title, but also helped it out by taking a paycut that made it easier for the Warriors to keep their core together this summer.

So why is he living in the past? Why release a shoe line taking shots at his detractorsWhy did he blast his former organization on Twitter? Sure, he apologized, but why slide back down that rabbit hole? For that matter, why take a shot at Stephen Curry’s shoe line?

Chris Mannix at The Vertical at Yahoo Sports said some with the Warriors are wondering the same thing.

But make no mistake: Many in Golden State, team officials and players alike, have taken note of Durant’s oddball offseason and are perplexed by it. They see a bright future for Durant in Oakland, league and team sources told The Vertical, and are bewildered as to why he is still addressing his past.

Oklahoma City will always be in Durant’s DNA, but it’s time for him to move on. Slapping around a team that was loyal to him, even in rejection, is a bad look. He’s a Warrior, and the possibilities for this Golden State team are endless. He can win championships, can win awards, can build one of the great dynasties in NBA history. The Thunder are doing their thing. Durant should forget about them, and do his.

This will all blow over. Soon the season will start, Durant and the Warriors will look dominant, and this will all seem like a minor distraction in the deadest part of the offseason. The focus will be on the rings.

But if you want an answer as to why, Durant’s response to a YouTube comment to someone who told him “who cares what other people think, just do you.” (Hat tip For the Win.)

…of my stature, I play basketball, I got acne, I grew up with nothing, in still figuring myself out in my late 20, I slide in DMs, I make fun of my friends, I drink beers and play Xbox. I’m closer to you than u think

Durant still can be a little immature, still wants to be a regular guy, and just like a regular guy he wants to be liked. And like a lot of people, he snaps at people when he knows he should just let it go and rise above. Maybe that will come with the lessons of this offseason.

Despite revoked passport, Enes Kanter says Thunder have arranged his travel to Mexico City, Toronto

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Thunder center Enes Kanter – who had passport revoked by Turkey – lacked documentation to travel for a December game against the Nets in Mexico City and a March game against the Raptors in Toronto.

Apparently, that issue has been resolved.

Brett Dawson of The Oklahoman:

Kanter said on Sunday that the team has worked out an arrangement to allow him to travel to games in Toronto and Mexico City even without a passport.

It always seemed highly likely Kanter would get to Toronto and Mexico City. He’s a high-profile millionaire working for a billion-dollar company.

Report: Carmelo Anthony’s camp ‘cautiously optimistic’ Knicks will trade him by Monday

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In July, Carmelo Anthony was reportedly confident he’d be traded to the Rockets.

That optimism always seemed misguided. A couple months later, with Anthony still on the Knicks, it looks downright foolish.

Yet…

Frank Isola of the New York Daily News:

Anthony’s camp is cautiously optimistic that a deal will be struck before Monday, and trying not to think about the potential media circus that will take place if Carmelo is still with the Knicks.

It’s more likely Anthony’s confidants are hopeful than optimistic. If they’re actually optimistic, they’re very likely to be disappointed.

If Anthony hasn’t been traded by now, what will change between now and Monday? Houston still must find a taker for Ryan Anderson, and that’s no easy task – not without relinquishing sweeteners more valuable than Anthony. I suppose Anthony could waive his no-trade clause for additional teams, but it’s late for a deal to come together.

Hopefully for Anthony, his advisors aren’t pinning everything on a longshot trade and are helping him craft answers to the numerous questions he’ll face at media day next week – likely in New York.

Rick Pitino predicts NBA draft will accept high schoolers within two years

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Once an advocate of increasing the age minimum and a willing accepter of one-and-done, NBA commissioner Adam Silver sounded more open about allowing high school players to declare for the NBA draft.

The new Collective Bargaining Agreement left the issue open, but Louisville coach Rick Pitino predicts change is coming – relatively soon.

Pitino, via ESPN:

When I was at Kentucky, I had seven high school basketball players, told me they were coming, and instead, they went to the pros out of high school. And by the way, I think that rule is going to change back to that. I think high school players are going to be able to go pro again.

I think the commissioner is probably going to do it within two years.

Does Pitino know something? With decades of experience in the NBA and college, he could have many contacts with inside information. It’s certainly imperative for devising a recruiting strategy to know how this rule will change.

It’s also possible Pitino saw Silver’s comments, like any outsider could have, and is making a relatively blind guess.

But the possibility of inside information makes his comments more intriguing.