Tag: Seattle


Sacramento approves new Kings arena in final vote


Years and even decades of struggles came to an end on Tuesday, when the Sacramento City Council voted 7-2 to approve a new Entertainment and Sports Center that the Kings will call home as soon as the 2016 season. This is the final vote on the arena and demolition of a failed mall at the new arena site in Sacramento’s downtown will commence immediately.

Tuesday’s vote was marked by all-day celebrations including appearances by owner Vivek Ranadive, point guard Isaiah Thomas, and a host of local figures that were instrumental in keeping the team in town.

Sacramento had tried for years to come to an agreement on an arena with the intransigent Maloof family, who lost the means to own an NBA team and desperately sought to relocate as a solution to their financial woes.

The team was eventually sold to Ranadive after Seattle billionaires Chris Hansen and Steve Ballmer tried to cut a quick deal with the Maloofs, which the league rejected because of its preference to keep the team in Sacramento. The Maloofs begrudgingly sold the team to Ranadive after it was clear that they had no other choice.

Kings fans have dealt with relocation threats for many years and their grassroots efforts to keep the team were well-documented. Their local politicians and business leaders made a concerted effort to keep the team in town. That support was the difference between keeping the team and suffering the fate of other cities like Seattle that did not want to play ball on the issue of public funding for state-of-the-art arenas.

While the topic of public funding for arenas is controversial, what isn’t in doubt is that Sacramento put its time and money on the line and the city deserves tremendous credit for keeping its team. Tuesday’s vote leaves just one last step in a long journey – opening night.

Kevin Johnson not interested in NBPA job, but he would be the best man for the job


One of the best opening playoff rounds in recent memory got turned on its head when TMZ released audio on Friday allegedly containing several terrible, racially-charged remarks that Clippers owner Donald Sterling made to his girlfriend.

The next day in Memphis, a somewhat overwhelmed Adam Silver held his first presser under duress as the NBA’s head man, just as news of the death of former Grizzlies owner Michael Heisley hit the wire.  The commissioner spoke in his usual lawyerly style, which was proper as the NBA tip-toes through a minefield of legal issues.

To date, the NBA Players Association has worked alongside Silver to ensure that due process is followed, that things don’t get out of hand from the players’ standpoint, and most importantly from their point of view that the NBA does everything it can to deal with the Sterling situation with the heaviest hand possible.

Part of why the players and the NBA have worked well together so far has been the familiar face of Sacramento Mayor Kevin Johnson.  Johnson has been in the process of finding a new executive director for the beleaguered union, but he was called upon by Clippers point guard Chris Paul to get involved with the players’ response to this issue.

Sources close to Johnson tell ProBasketballTalk that he is not interested in the union’s head job, despite round applause from people around the league for his handling of the Sterling situation so far.

Johnson was a driving force behind Sacramento’s success in keeping the Kings in town last year.  He worked alongside the league, David Stern and Adam Silver to secure a qualified owner and new arena with the Maloof family wanting out of the league.  The Maloofs knew they needed to create a bidding war in order to get the highest sales price possible, and they struck a controversial deal with Seattle billionaires Chris Hansen and Steve Ballmer to sell the team.  The deal was designed to quickly put pressure on Johnson and Sacramento to deliver a qualified response, and from Seattle’s point of view the strategy was to create an air of inevitability among decision-makers and media that Sacramento had a shaky proposal.

It was amidst this backdrop that Johnson methodically used his political background to outmaneuver his opponents and convince owners to reject the Kings’ relocation to Seattle.  His team boasted political heavyweight and crisis consultant Chris Lehane, and his network of contacts extend all the way up to President Barack Obama.

The NBPA would certainly love to have Johnson in their top spot because he would be the best man for the job, but they’ll have to settle for him finding the next best thing.

Bucks owner Herb Kohl seeking new investors to keep the team in Milwaukee

Terry Stotts Press Conference

Bucks fans will spend the next 2-3 years looking over their shoulders at Seattle, and that’s because they’re in jeopardy of losing their basketball team should owner Herb Kohl fail at securing a new NBA-approved arena.

For small and mid-markets, having a state-of-the-art arena to maximize revenues is a requirement and any city that isn’t willing to make that type of commitment to the NBA will be threatened by 5-10 other cities that are dying to get into the game. It’s simple supply and demand.

Kohl, the former Democratic senator who is 78, is reportedly looking for other investors to join him in his attempt to keep the team in Milwaukee.

With a net worth that’s better described with an ‘M’ for millions rather than a ‘B’ for the billionaire owners that the NBA is attracting these days, it’s understandable why Kohl needs to deepen the pockets and broaden the influence of his group.

First and foremost he needs to deliver on an arena, and having more investors will help that along in many ways. But just as important to Milwaukee will be the overall value proposition this ownership group will have to the NBA, whether Kohl wants to continue as owner of the Bucks or not. That’s because if there ever comes a time when their arena plans are in doubt, it will be this group that gets measured against Seattle and any other city that wants to get into the game.

The NBA, whether being led by Adam Silver or David Stern, does not like to relocate franchises. In this day and age of information, the damage that relocation can do their brand is much greater than it was when Seattle’s elected officials told the NBA to go kick rocks and thus Sonicsgate was born.

At the same time, the NBA has found a sweet spot in its public subsidy pitch, which has been the target of many economists’ ire over the last 30 years when suburban arenas were all the rage. Economists have maintained that arenas don’t increase local spending because of things like the substitution effect, which simply stated means that people spend money at the game but stop spending their limited funds everywhere else. In essence, they contend, there is no overall gain.

However, economists have recently found themselves at an impasse on the issue with even the most ardent oppositionists still researching newer findings, in an area of study that isn’t exactly brimming with ongoing research.

The new revelations highlight the difference between suburban arenas and what city planners call ‘high density civic attractions,’ which are more likely to be sought after in the small-to-mid market cities that are most susceptible to relocation.  Instead of driving to a suburban arena, watching the game, and then leaving – a downtown arena can attract people for longer visits, attract all-important out-of-town dollars, and encourage use of mass transit.

In terms of increasing land value, a properly developed downtown arena district can increase surrounding land value by “hundreds of millions of dollars” according to a recent study by lead opposition subsidy voice Brad Humphreys. Arguments move into the both the micro- and mundane-levels from there, but an increase in land value around these downtown arenas stands on its face – it’s valuable for a reason.

The NBA has the cachet as an anchor tenant to bring in the private investment needed to make these downtown revitalization projects pencil out, particularly as public redevelopment dollars have dried up around the country.

With the NBA being the winner of over $3 billion in public funds since 1990, they have a massive financial stake in making sure they both polish that pitch and protect their reputation on that front.

For starters they have to maintain that they can be a loyal partner to any city engaging in good faith efforts to maintain a state-of-the-art arena.  Long-term, by building a portfolio of downtown success stories like L.A. Live, downtown Indianapolis and the soon-to-be built arena in downtown Sacramento — the league can keep the public funding narrative from collapsing under a wave of antipathy toward millionaires and billionaires bouncing a leather ball for amusement.

So look for the NBA to work with Kohl and Milwaukee to find the political will (i.e. public dollars) to get an arena deal done. As expected, the league released a statement from David Stern moments ago expressing support for that process. “Senator Kohl bought the Bucks in 1985 in order to ensure the team would remain in Milwaukee. During his extraordinary stewardship his goal remained the same — to bring the fans of Wisconsin high-quality basketball from a team they would be proud to call their ‘home’ team. With this announcement, Senator Kohl continues his mission: to assure continuity of ownership by broadening its ownership base, and assuring that the fans of Wisconsin will enjoy NBA basketball and other events in a new state-of-the-art facility,” said Stern.

And while everything is going to sound fine for Bucks fans until it doesn’t, they’re not going to know that they are indeed keeping their team until much more has been revealed in this slow-moving story.

Steve Ballmer “on a rampage,” playing Russian Roulette with Seattle’s NBA future


It has been said throughout the Sacramento Kings saga that the presence of Microsoft CEO Steve Ballmer in Seattle’s ownership team has been a big plus as they seek to buy and relocate the team.

Worth $15 billion according to Forbes and ranked No. 51 on its billionaire list, he and Chris Hansen were called the “perfect prototype for an NBA owner” by David Stern shortly after the NBA relocation committee unanimously recommended to reject a move of the Kings to Seattle.

But now that Seattle’s advances have been rebuffed by the NBA, sources say it’s Ballmer that has taken on a larger role in decision-making for the Seattle ownership group. The polar opposite of the soft-spoken hedge fund manager in Hansen – Ballmer is known for being loud and outrageous. Vanity Fair ran a seething piece (Microsoft’s Lost Decade) last August detailing a violent incident and more.

Now that Ballmer has taken on a larger role with the Seattle group, league sources tell PBT that the same bravado he has employed with Microsoft is turning heads at the league office – and not in a good way. It’s no secret that Ballmer is a handful — but a well-connected and filthy rich handful that the NBA would love to have in its stable. At least that was the case. According to league sources speaking to PBT under condition of anonymity, the recent power plays made by Seattle and the Maloof family have “started to weigh on the NBA to the point where any Ballmer-led proposal now or in the future could fall on deaf ears if he doesn’t change course.”

When asked to clarify, the source said that should the Seattle group continue to pursue a scorched earth policy with the Sacramento marketplace, they would jeopardize the city’s ability to secure an NBA team down the road should an opportunity present itself.

When asked how Seattle got to that point, several sources with knowledge of the situation have told PBT that once they recognized the Sacramento bid was likely to meet league requirements, and ultimately secure the Kings, then decision-making for Seattle’s strategy and PR effort slowly shifted into Ballmer’s hands. That strategy has been at odds with the due process the NBA has been following, and recently it has been at odds with the NBA itself.

“He’s on a rampage,” said one source. “He assumed he could backdoor Sacramento with a willing partner in the Maloofs, but he underestimated Sacramento and now he thinks he can twist enough arms around the league to force his way into the association.”

As reported by multiple outlets, the Hansen-Ballmer group has chosen a curious route to team ownership by working primarily with the Maloof family and often with little-to-no communication with the league office. Conversely, the Sacramento group has worked directly with the league and had very little communication with the Maloof family, who have not ruled out selling to the Sacramento group but also have done everything possible to repel it.

Leading up to the NBA’s recommendation to deny relocation of the Kings to Seattle, the Seattle-Maloof group saw their first shift in public relations strategy. Leaks attacking the NBA, David Stern and the Sacramento group had been occurring with greater frequency, but the first shot across the bow at the NBA occurred when they ignored the league’s public and private statements and tried to force a bidding war.

They “voluntarily” raised their offer to buy the team by $16 million for a total of $357 million. This development was not seen as pivotal by the league, and the Sacramento group didn’t as much as blink when they stood pat with their originally matched offer of $341 million for the Maloof-controlled 65 percent stake.

The core of the Seattle-Maloof strategy was two-fold. First, they would seek to sell owners on the idea of a higher franchise valuation – a nebulous concept given the many intangibles of such measurements. Does an equal offer in both cities create better comps for owners if it’s accepted in a smaller market? Do the next purchasing owners even include this aberration of a situation in their valuations? Regardless of the merits of the strategy, throwing money at the issue has always been the Ballmer way.

The second and more important factor in increasing the bid, sources say, is that it raised the idea of a Maloof antitrust challenge should the family not be allowed by the NBA to sell to the highest bidder. League sources say that the NBA has planned for this contingency, and while the potential litigation would always play a role in their decision-making, the ammunition the league would have against the Maloof family in court has made this a mostly benign threat.

NBA.com’s David Aldridge reported this past week that Hansen is not interested in any legal challenges if his bid is rejected (no word on Ballmer). Nevertheless, the threat of a lawsuit would never come from a Seattle group that hopes to one day join the NBA. The antitrust threat, benign or not, starts with the Seattle group’s offer and draws a Family Circus style map for the Maloofs to posture with. Nothing more, nothing less.

In coordination with this threat, the Maloofs have made constant overtures that the league cannot force them to sell or tell them what to do. When asked about what the league would do if the Maloofs try to act against the league’s wishes, sources say the NBA has always reserved the right to use the ‘Best Interest of the League’ clause to remove the family from the league. Sources say this outcome is unlikely, however, because there is enough “natural leverage” to manage the situation without using it.

For one, the Maloofs cannot afford to run the Kings under normal conditions, let alone with an empty arena and no sponsors – something we’re told would not be held against the Sacramento market if the impossible scenario of them keeping the team came into play. The family is also indebted to the league to the tune of an estimated $150 million, and the family has done plenty of damage to the league’s reputation on the public subsidy front and in general.

“There are no shortage of claims to be made against the Maloofs should they stumble their way into court,” said a source speaking to PBT under conditions of anonymity.

Back in reality-land, Hansen’s announcement that he would “voluntarily” increase his bid was uncomfortable for the league, but because they had not gone public with a recommendation the strategy wasn’t seen as an affront to the league’s due process.

Any doubt about Seattle’s contempt for that process would eventually be erased once the league’s relocation committee unanimously recommended against a move to Seattle. Sources say it was at that point that Ballmer officially took control over the war room.

Immediately after the league’s announcement, an aggressive statement was put out by Hansen on the SonicsArena.com website stating that despite the NBA’s recommendation, they “fully committed to seeing (the) transaction through.”

“It was at that point that Ballmer put the league on notice,” said one league source. “Knowing that he could offer virtually anything with a decision on the Kings’ future all-but made, Ballmer has been dead-set on embarrassing the league by making them turn down a much higher offer.”

This past weekend the Seattle-Maloof group leaked news of an increased $406 million offer for the Maloof-controlled 65 percent stake of the team. They also leaked news that the Maloof family would not sell to the Sacramento group.

Lastly, they leaked a scenario in which 20 percent of the team would be sold to Hansen and Ballmer as a ‘backup’ bid in case their original bid for a majority stake was denied. The Seattle-Maloof group would supposedly work with the city of Sacramento on an arena deal in this impossible scenario – one that has drawn a collective eye-roll around the league. Sources with knowledge of the league’s thinking have called that scenario a “non-starter.”

In shades of past Maloofishness, the Sacramento Bee reported today that the family is still willing to consider the Sacramento offer. Whatever the case may be, league sources have consistently told PBT that not only do the Maloofs have practically no leverage in this situation, but they also have practically no chance of being NBA owners next season. Sources expect the family to accept Vivek Ranadive’s bid after the Seattle relocation bid is denied, perhaps as soon as Wednesday.

With the NBA expected to eventually stand behind the Sacramento group, the larger issue being discussed in league circles is whether or not Ballmer and Seattle will follow the Maloofs off the NBA’s ledge. Their sneak attack attempt to procure Sacramento’s team was never well-received by the league, who would have rather seen the Maloofs conduct a good faith effort to sell the team locally. Even with Seattle holding Sacramento’s feet to the fire at every turn, sources say that there was never a point in time in which insiders thought Seattle had gone too far. After all, taking a team from a market that has done everything it needed to in order to keep the Kings is messy business.

Despite an all-out assault by Seattle to create an air of inevitability surrounding the relocation of the team, including reports that the NBA would quickly and overwhelmingly approve the move, and near daily leaks from Seattle-Maloof sources about make-believe problems with the Sacramento bid – the feeling around the league was that though the situation has been undesirable, once the ball was thrown in the air, all was fair in a basketball war.

As for Seattle, the strength of their ownership group, their oversold but actionable arena plan, and strong No. 12 TV market made them a shoo-in if the Sacramento group faltered. As we know now, Sacramento did not falter, but Seattle was certainly well-positioned for the future.

“(Seattle) was in the driver’s seat when it came to potential opportunities with the Bucks or whatever team might face arena or market troubles down the road,” said one league source. “If the league was going to consider expansion, you could have written Seattle’s name in ink to get a team.”

Now that Ballmer is leading Seattle down the path of conflict with the NBA, sources aren’t so sure.

“You don’t get into a knife fight with the NBA and then ask if you can come hang out in the clubhouse,” said one high-level source. “Ballmer is playing a game of Russian Roulette with SEA’s NBA future. He can’t throw money at the problem like this is Microsoft.”

Perhaps this is an unsolvable problem for the Seattle group – a zero-sum game and all participants have nothing to lose by going all-in. Perhaps they know that expansion is off the table.

With the way the local media has demonized David Stern and the NBA the average fan in Seattle is being told that they’re being screwed if Stern doesn’t rob Peter to pay Paul. Perhaps the Hansen-Ballmer group believes that the only thing that can satisfy the masses is the Sacramento Kings, or an iron-clad promise of expansion down the road. If you listen to the most strident voices in Seattle, they believe it’s time to spill blood in one gigantic last stand.

Sources say these realities are understood by the league, as is playing hard through the final whistle. “The league is more than willing to support Seattle in its bid for NBA basketball, but when they choose to trash an existing, supportive market in Sacramento and then set their sights on the logo, all bets are off.”

The NBA’s Board of Governors conducted a conference call on Monday and no changes were made to the relocation committee’s recommendation. The owners will see presentations by both groups on Wednesday with Jon Humbert of KOMO in Seattle reporting that a full vote will indeed take place.

Report: Maloofs want NHL or MLB team, so they will sell to Sacramento if Seattle deal dies

Sacramento Kings v Los Angeles Lakers

The Maloof family — the owners of the Sacramento Kings still — were in the room with the Seattle group trying to buy the team when they made their pitch to a committee of owners last week. How much that really helped the Seattle group is up for debate — the one thing everybody on both sides of this debate agree on is they are sick of the Maloofs.

Next Thursday and Friday in New York the NBA owners (officially as a group called the Board of Governors) will meet in New York and among the topics to be discussed is whether to approve a sale of the Kings to a group led by Chris Hansen and Steve Ballmer — wealthy guys with a plan to move the team to Seattle starting next season and build a new arena.

Sacramento mayor Kevin Johnson put together a counter offer with billionaire money (Vivek Ranadive, Mark Mastrov, and Paul Jacobs) and a stadium plan of its own to get built near downtown Sacramento. It’s the kind of offer the NBA and other professional sports leagues want to see from cities with teams — a lot of public money and community support rallied around the franchise.

Anybody who tells you they know for sure what the owners will do next week is a fool — nobody is certain on this. But read the tea leaves and it seems Sacramento may have the eight votes they need to block the sale to the Seattle group.

And if that happens, as we have said before would likely happen, the Maloofs will sell to the Sacramento group.

This is confirmed by a new report in the Sacramento Bee — but it is the reasoning that is new. And kind of funny.

They want their money and they want to pursue another professional sports franchise in Major League Baseball or the NHL, hence their 5 p.m. deadline today for the Sacramento-based investors to submit a written matching offer for the Kings….

On Thursday, sources close to the Maloofs said that if the Sacramento group submits a matching offer that satisfies the league’s other owners, they will embrace an outcome that keeps the Kings in Sacramento.

To be up front, PBT never reported on the Friday deadline before now because it’s meaningless. It’s just the Maloofs trying to assert some control over a situation where they have no control. If Seattle is rejected the Maloofs only options are to sell to the Sacramento group or hold on to the team. So they will deal with Sacramento. And a deal will get done. The deadline is moot.

But let’s get to the key point — the Maloofs don’t want to hold on to a team because the guys too poor to field a quality NBA team want into the NHL business? Or the MLB business?

The Maloofs have met with NHL Commissioner Gary Bettman and have for months looked into buying a hockey franchise, with Las Vegas among the possible destinations. Their interests also have expanded and included opportunities in Major League Baseball.

I know how popular Bettman is among hockey fans, what they think of his intelligence, but even then he is too smart to get into bed with the Maloofs. Right? Same with Bud Selig. Right?

The NBA owners do not have an easy choice next week — these are two good offers before them. Seattle is a bigger, wealthier market and its owners define the words “deep pockets.” But for a league that will go to more than a dozen cities in the next 12 years and say “you need to help us out with arena upgrades/a new arena” to walk away from a city that did everything a league could ask sets a bad precedent. The owners will ultimately vote what they think is best for their own pocketbooks long term. But nobody knows for sure what that choice will be.

One way or another, a week from now we should know the fate of the Kings. And then maybe this franchise and its fans can move on to the next step.