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.

After Thunder win, Russell Westbrook trolls Joel Embiid, waves goodbye, tells him to “go home”

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Joel Embiid was making friends all over the court on Friday night.

First, he got into a jawing match with Carmelo Anthony. Also during the first overtime, Embiid blocked Russell Westbrook‘s driving attempt at a game winner.

After the Thunder, Westbrook trolled Embiid by waving goodbye to the Sixers’ center, who was yelling back at him.

When asked about it, Westbrook said Embiid was talking a lot so he told the Sixers center to go home.

That can have some serious connotations — Embiid was born in Cameroon. Westbrook may have meant “go to the locker room” or “go to where you live,” but considering Embiid is an immigrant it comes off very poorly for Westbrook.

Embiid threw a little fire back at Westbrook.

The league office is going to be looking into this one.

DeMarcus Cousins doesn’t expect Pelicans to trade him at the deadline

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The New Orleans Pelicans have a decision to make as they approach the trade deadline: Do they think they can re-sign DeMarcus Cousins next summer to stay in the Big Easy with Anthony Davis?

If the answer is no, then they have to consider trading Cousins at the deadline to at least get something back. There is a lot of context, however, that makes this seeming binary trade/keep decision far more complicated.

Cousins himself doesn’t think he is going anywhere, as he told Marc Spears of ESPN’s The Undefeated.

While the Pelicans have a lot to consider with the unrestricted free agent, Cousins says he is confident that he will still be playing for New Orleans after the Feb. 8 trade deadline.

“I am confident in my team,” Cousins said. “I am starting to understand this business a lot more than I did before. You can kind of tell when things are about to come about. We’re a very competitive team. A talented team. I don’t think that will be the case at all….

“A.D. hits me with little jabs about free agency all the time, but he also understands,” Cousins said. “It was Jrue in that situation last [offseason], and we understood his situation. Of course, they throw their little jabs. They throw their little jokes. But they are serious at the same time. They are respectful about it at the same time.

The Pelicans are 15-14 and the seven seed in the West entering Friday night’s games, and if New Orleans has a shot at the playoffs come the deadline there is no way he gets moved. Ownership and management want a playoff appearance. They have greenlit adding one of the game’s top centers (Cousins) to go next to Davis, and last summer they paid big to keep Jrue Holiday at the point in New Orleans. If the Pelicans don’t make the playoffs (and possibly even if they do squeak in and get swept out in an ugly fashion), everyone in the organization expects a housecleaning. They have been on edge all season. With jobs on the line, they are not trading Cousins and getting worse short term even if you could argue it was the right basketball move long term.

Will Cousins re-sign with the Pelicans next summer? That will be about the money — what the Pelicans offer, and what other teams will offer in what is expected to be a tight free agent market, especially for centers.  DeAndre Jordan will be on the market as well, not to mention second-tier guys who will be more affordable for teams such as Brook Lopez. In that market, Cousins may want to stay where he likes his teammates and seems happy.

But first he has to get past the trade deadline.

Joel Embiid scores over Carmelo Anthony, then they exchange words (VIDEO)

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Joel Embiid gives zero… well, you know where I’m going with that.

Embiid trolls the world and backs down from no man, and that includes Carmelo Anthony. Late in the fourth quarter of the barn burner between the Thunder and 76ers Friday night, Embiid backed ‘Melo down and scored over him, then did a little jawing — which Anthony didn’t appreciate.

I love that Embiid egged on the Sixers crowd after this. He knows his audience. After the game he said this.

Embiid talks a lot — A LOT — but he is backing it up.

For example, in the first overtime Russell Westbrook thought he made a drive that was going to win the game, and Embiid rejected him.

If you did not watch this game, go find a replay. This is the new best game of the season.

Rudy Gobert leaves game vs. Celtics with likely knee sprain. Again.

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Rudy Gobert missed 11 games this season due to a bone bruise in his knee. While the Jazz defense suffered as should have been expected with their anchor gone, their offense found a groove without him — and with more Donovan Mitchell and Derrick Favors — resulting in Utah going 7-4 with their star center out.

Now the Jazz will be without him again for a while — he seems to have sprained his left knee just minutes into Friday night’s game against the Celtics when Favors fell back into him. That is the same knee he injured before. Gobert was forced to leave and will not return to the game.

If that diagnosis holds, it will be weeks again the Jazz will be without Gobert.

The Jazz know how to play without Gobert. Favors moves to center and while he’s not near the same defender his offensive skills got them buckets and opened up the floor. The rookie Mitchell, as well as Ricky Rubio at points, took advantage of it to give the Jazz a top-10 offense with Gobert out. They need to find that groove again.

Still, Utah needs Gobert back and himself to really reach the heights they are capable of.