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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.

Mike D’Antoni: Kobe Bryant and Carmelo Anthony rejected my system, but new (old) approach with James Harden

LOS ANGELES, CA - NOVEMBER 20:  Head coach Mike D'Antoni of the Los Angeles Lakers celebrates with Kkobe Bryant #24 and Pau Gasol #16 after the game against the Brooklyn Nets at Staples Center on November 20, 2012 in Los Angeles, California. The Lakers won 95-90.   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 Stephen Dunn/Getty Images)
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I can’t understate how revolutionary Mike D’Antoni’s offense looked with the Suns. In his first full season, 2004-05, they scored 110.4 points per game – the most anyone had scored in a decade. And it wasn’t even close. Phoenix played fast and scored efficiently.

That offense eventually got D’Antoni jobs in the NBA’s biggest markets and with two of the league’s best scorers, Carmelo Anthony (Knicks) and Kobe Bryant (Lakers).

Ian Thomsen of NBA.com:

But his coaching relationships with Anthony and Kobe Bryant in Los Angeles did not turn out so well. The last two stars essentially rejected his system.

“They did,” acknowledged D’Antoni. “And they were paid 20-something million dollars for it — they were successful. So I don’t blame them. Nothing’s been proven up to that point.”

The Warriors had yet to show that D’Antoni’s offense could thrive in late May and June.

“They’re thinking, like, he’s crazy,” D’Antoni said of Anthony and Bryant. “So I don’t blame them at all. This is a much better situation.”

With the Knicks and Lakers, D’Antoni edged back from his own offensive principles in part because he wasn’t sure, either. He was in a lonely place as the proponent of a style that was rejected by NBA fundamentalists. In New York and L.A., D’Antoni lacked the proof that would be provided years later by the Warriors of Kerr, who when serving as GM of the Suns had himself objected to D’Antoni’s point of view. The inventor didn’t believe fully in his own invention.

“I wasn’t that confident,” D’Antoni insisted. “It was a little bit before analytics. Everybody was telling us that we couldn’t do it, no one was telling us we could. Analytics came in and said, hey, you can do this — this is good, actually. So now you’ve got (GM) Daryl Morey with the Rockets and how they play and different teams trying to do it, and now it’s kind of caught on.

This bucks the narrative that D’Antoni’s offense can’t work with a score-first star. If D’Antoni compromised his scheme for Kobe and Melo, we haven’t yet seen it full bore with a player like that.

We will this season in Houston, where D’Antoni has turned score-first James Harden into the Rockets’ point guard.

As D’Antoni said, it’ll be easier to sell his scheme now that it has been proven to work. But as other teams adopt elements of it, he’ll have less of a strategic advantage.

The best coaches have revolutionary ideas AND get their players to buy into them. D’Antoni’s methods are no longer as cutting-edge, but he’ll have an easier time selling his players. That’s a justifiable knock on D’Antoni’s overall coaching prowess, but he still brings positives.

We’ve seen D’Antoni’s system at full throttle, and we’ve seen him coach generational scorers. To get both simultaneously will be a fun experiment in Houston this year.

Paul Pierce: Clippers are a super team

PLAYA VISTA, CA - SEPTEMBER 26:  L-R; Paul Pierce #34, Austin Rivers #25, DeAndre Jordan #6, J.J. Redick #4, head coach Doc Rivers, Blake Griffin #32, Jamal Crawford #11, Luc Mbah A Moute #12 and Chris Paul #3 of the Los Angeles Clippers pose for a photo during media day at the Los Angeles Clippers Training Center on September 26, 2016 in Playa Vista, 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 the Getty Images License Agreement. Mandatory copyright notice.  (Photo by Jayne Kamin-Oncea/Getty Images)
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Derrick Rose opened the super-team floodgates by declaring the Knicks one.

Paul Pierce is trying to get the Clippers into the conversation.

Pierce, via Jesse Dougherty of the Los Angeles Times:

“To me, I think we have a super team here,” Pierce stated at Clippers media day on Monday. “You look at Chris Paul who’s been first-team all-NBA … Blake Griffin first-team … DeAndre Jordan currently first-team All-NBA.

“I mean how many teams can currently say that? You have the best three-point shooter in the NBA (J.J. Redick). You have the Sixth Man of the Year (Jamal Crawford). I mean why is this not a super team? What defines super team? When you look at those stats and you hear when I’m saying, this could very well easily be what’s considered a super team.”

If the Knicks are a super team, so are the Clippers – and Cavaliers and Spurs and Grizzlies and Bulls and…

But New York can’t be the standard.

With four players who made an All-NBA team last year – Stephen Curry, Kevin Durant, Draymond Green and Klay Thompson – the Warriors are the undisputed super team.

Relative to Golden State, the Clippers don’t hold up.

All four All-NBA Warriors are expected to remain elite. Paul is 31 and coming off injury, and Griffin had an injury/suspension-ravaged season that kept him from making All-NBA last year.

Jordan made All-NBA at center, where a bevvy of players have cycled through in recent years. None of the All-NBA Warriors relied on that wide-open position to make it.

Golden State has two players – Curry and Durant – better than any Clipper.

Redick is one of the NBA’s most underrated players, but he’s not a star, leaving the Clippers with just three to the Warriors’ four. Crawford’s Sixth Man of the Year award last year was dubious, and I’d rather have Golden State reserve Andre Iguodala.

With three All-NBA players in or near their prime, the Clippers might have been a super team in a different era. They stack up reasonably well in stature with Pierce’s 2008 Celtics, who also had Kevin Garnett, Paul Pierce and Rajon Rondo.

But the Warriors have pushed the bounds of what a super team can be so far, I’d consider them the league’s only super team now.

At least Pierce’s claim sparks discussion of the term and his team’s credentials – unlike the response Rose inspired: laughter.

Cavaliers keep re-watching their Game 7 victory over the Warriors

OAKLAND, CA - JUNE 19:  Kyrie Irving #2 of the Cleveland Cavaliers shoots a three-point basket against the Golden State Warriors in Game 7 of the 2016 NBA Finals at ORACLE Arena on June 19, 2016 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 the Getty Images License Agreement.  (Photo by Ronald Martinez/Getty Images)
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The Cavaliers’ win over the Warriors in Game 7 of the NBA Finals was an all-timer.

LeBron James bringing a championship to title-starved Cleveland, the Cavs topping the 73-win defending champions who’d built a 3-1 lead, Kyrie Irving‘s shot, Kevin Love‘s defensive stand – the game had it all.

The Cavaliers obviously enjoyed it. And enjoyed it, and enjoyed it and…

LeBron James, via Brian Windhorst of ESPN:

“I’ve seen it a few times,” James said. “It was on NBA TV throughout the summer. I watch it from a fan’s perspective. I see what we could’ve done better, but I also watch it for enjoyment, to see those three zeros on the clock.”

Irving, via Windhorst:

“I was rewatching the games and talking to my teammates about it, sending them snapchats of me watching,” Irving said. “I got chills. My stomach was dropping knowing the ball is going in but knowing exactly, emotionally how I felt at the time. It still gets me excited thinking about it. It’s such a huge moment for not only Cleveland but our team, our families, our friends.”

Iman Shumpert, via Windhorst:

“I’ve watched it over and over,” Iman Shumpert said. “Oh, it was enjoyable.”

At some point, the Cavs have to refocus on the upcoming season. Maybe they already have.

But I’m not going to tell them to stop reliving Game 7. It was a big deal. Enjoy it.

This can even be healthy if it motivates them to chase that euphoric feeling again.

And if it just distracts them from their goal of repeating? There are worse things – like being stuck on a Game 7 loss.

Report: Rockets give Gary Payton II fully guaranteed salary

TARRYTOWN, NEW YORK - AUGUST 07:  Gary Payton II #0 of the Houston Rockets poses for a portrait during the 2016 NBA Rookie Photoshoot at Madison Square Garden Training Center on August 7, 2016 in Tarrytown, New York. 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. Mandatory Copyright Notice: Copyright 2016 NBAE  (Photo by Nick Laham/Getty Images)
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The Rockets scooped up undrafted point guard Gary Payton II shortly after the draft ended.

How did they do it?

Fully guaranteeing his deal, according to Eric Pincus of Basketball Insiders.

I rated Payton a borderline first-rounder coming out of Oregon State, but he went undrafted. Perhaps, the league just deemed him unworthy. Or maybe the teams that liked him most weren’t positioned to draft him. Or maybe teams opted for lesser players in the second round who were willing to spend a year overseas or in the D-League.

Houston guaranteeing his deal certainly points to a robust market for the point guard. It could also indicate the Rockets plan to keep him into the regular season.

Payton gives the Rockets 15 players with guaranteed salaries plus restricted free agent Donatas Motiejunas, who has an outstanding qualifying offer and seems likely to return. There’s no obvious candidate for Houston to waive to reach the regular-season roster limit of 15 – and it could be Payton. This could just be a (more expensive than usual) way of getting Payton onto the Rockets’ D-League affiliate. They won’t be the only team to eat a guaranteed salary this season.

With James Harden (yup), Patrick Beverley, Pablo Prigioni and Tyler Ennis at point guard, Houston doesn’t have a pressing need for Payton. But Ennis, who has accomplished little in two NBA seasons, should be on notice. That Houston values Payton so highly could mean Ennis is the odd man out. Both players, and everyone else, will have the preseason to prove themselves.

Payton, son of the former SuperSonics guard, has major defensive potential. Running an NBA offense will be a tall order, but he has enough raw skills to offer intrigue on that end. He’ll need his defense to buy him time.