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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.

Nikola Vucevic hits fade-away game winner for Magic against Hawks

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The Hawks almost came back and won this — Atlanta went on an 8-0 run in the final minutes to tie the game at 94-94 with Orlando. The Magic had one last chance with 2.2 seconds left.

Nikola Vucevic nailed it.

Can’t blame Al Horford‘s defense on this one, he pushed Vucevic out and contested the shot. But in a make-or-miss league Vucevic nailed the game winner, Orlando wins 96-94.

If that looks familiar, Vucevic knocked down pretty much the same shot against the Lakers earlier this season.

LeBron James on Super Bowl: “Got to go with the Carolina Panthers”

Carolina Panthers quarterback Cam Newton, right, embraces Cleveland Cavaliers forward LeBron James after the Cavaliers defeated the Charlotte Hornets in an NBA basketball game Friday, Nov. 27, 2015 in Charlotte, N.C. The Cavaliers won 95-90. (AP Photo/Nell Redmond)
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We know Stephen Curry — who spent many of his formative years in Charlotte and still thinks of the city as his hometown — is all in on the Carolina Panthers today against the Denver Broncos in Super Bowl 30.

On this, he and LeBron James agree.

LeBron sounded like the politically cautious, image-conscious version of himself at the start of this quote from Uninterrupted on Facebook, but as he gets going, you can quickly see who he wants in this game (hat tip Eye on Basketball).

“I don’t know if I quite got a prediction but I definitely want to see a great Super Bowl,” James said in the video. “But if it was a life and death situation and I had to choose one team and one player, I got to go with Killah Cam. Got to go with the Carolina Panthers, they’ve been playing the most consistent football all year round. Both offensively, defensively and special teams. Got to go with Cam and one of my boys plays for them too as well, Ted Ginn Jr., that’s been showing out all year as well.

“No disrespect to the Broncos. I love their team. They got the legend at quarterback, they got that defense that’s out of control. They got some receivers that be balling out as well. They’re really well coached as well and that’s the reason they are in the Super Bowl. But I’m rolling with the Carolina Panthers today.”

A lot of NBA players like the way Cam Newton plays — with exuberance, wearing his heart on his sleeve, dancing and celebrating. That’s how Curry and LeBron and other NBA players want to play their game, and they feel reined in by the league. They relate to Cam Newton and the ridiculous role model/celebration debate.

We’ll see how much celebrating the Denver defense lets Newton do.

Kevin Durant on Warriors, Spurs: “We’re not scared of neither one of those teams”

OAKLAND, CA - FEBRUARY 6: Kevin Durant #35 of the Oklahoma City Thunder while facing the Golden State Warriors on February 6, 2016 at Oracle Arena in Oakland, California. 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 Getty Images License Agreement. Mandatory Copyright Notice: Copyright 2016 NBAE (Photo by Noah Graham/NBAE via Getty Images)
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We’d seen this movie before. Against the San Antonio Spurs. Against the Cleveland Cavaliers. The Golden State Warriors offensive machine got cranked up, dropped 73 on Oklahoma City in the first half, led by 14 at the break, and it was about to turn into another rout, and another statement win for the Warriors.

Except the Thunder came back. OKC held Golden State to just 18 third quarter points and got the lead down to two points — the Thunder pushed the Warriors away from the things they like to do (Stephen Curry/Draymond Green pick-and-roll) and made life difficult for them. It was a fantastic performance for OKC, even if Golden State still prevailed with a 116-108 win.

After the game Durant would have none of any moral victory talk — even though it was — and he said the Thunder were not intimidated by the Warriors or anyone else, via Royce Young of Oklahoma City.

“That’s what we’re supposed to do,” Durant said of the comeback. “When we get down, we’re supposed to tie the game up. No moral victories in here…

“Man, we’re not scared of neither one of those teams,” Durant said, including the Spurs. “We’re going to play our game. Nobody in this locker room is scared. We gotta play ’em. If we want to get to where we want to get to, we gotta play ’em. We’re not ducking nobody.”

The NBA isn’t professional boxing; nobody gets to duck anybody.

But a Thunder team searching for respect gained a measure Saturday night. The Thunder picture themselves contenders and for much of the season listened to talking heads (myself included) say the Warriors and Spurs are in a different class. Saturday night was a step in showing that they belonged. There are still questions about how Golden State or San Antonio could exploit players such as Dion Waiters or Enes Kanter is a seven-game series, but the Thunder have two of the league’s top five players — they can beat and hang with anyone.

They have a shot at a title.

If Durant believes that, it would impact his decision this summer, but that is another discussion.

Watch Stephen Curry, Kevin Durant trade shots Saturday night

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Kevin Durant won the one-on-one battle — he dropped 40 points on the Golden State Warriors, while Stephen Curry had “just” 26 and needed 26 shots to get there (but did add 10 assists).

But the Warriors built up a lead thanks to their depth and were able to withstand a late Thunder run to get the win.

Enjoy watching Curry and Durant putting on a show Saturday night in the Bay Area.