Tag: Seattle


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.

Who’s winning the race to open a new Kings arena?


While Sacramento’s fight to keep their Kings could extend all the way to the NBA’s Board of Governors meeting on April 18-19, this week will prove pivotal as both Sacramento and Seattle are set to give their best pitch to the BOG’s joint committees tasked with reviewing the matter today in New York.

League insiders have bounced around on a lot of issues surrounding the Kings saga, but one of the issues that they are in agreement on is that the city that can build an arena first will have a key advantage in the eyes of the owners deciding the fate of the franchise.

In what may be a surprise development to some given Seattle’s head start on the arena building process, sources say that in Wednesday’s meeting and in the coming weeks, Chris Hansen’s group will reveal that they have “very little chance” of opening an arena before the 2017-18 season due to expected challenges under environmental law.

Seattle and Hansen are expected to agree to proceed with an arena deal as early as January 2014, after a final environmental review is conducted.  It is at that time that they are expected to face significant challenges (lawsuits) to their environmental review over traffic and arena location.  Those lawsuits have no time limit to be heard within, so a one-year lawsuit would make it a race for Seattle to open for the 2017-18 season if arena construction takes two years.

Sacramento is on track to open an arena in the 2016-17 season, and has no significant legal opposition to its arena plan as of yet.  There was practically no opposition against the last Sacramento arena plan, although that plan never got into the details of design (where opposition to large developments often form, as it has in Seattle). Also, the Downtown Plaza site for Sacramento’s arena plan is favorably zoned in the eyes of both the city and the league.

Sources with knowledge of the NBA’s view have identified two main differences that define each city’s path to an arena.

The first is a difference in environmental laws that provides Sacramento with an ‘expedited process’ to address any environmental challenges made against their arena deal once an environmental review is complete.

California recently enacted law AB900 at the urging of AEG (which has plans for a football arena in downtown Los Angeles near Staples Center). That law limits environmental challenges to a 175-day time-frame following the approval of an environmental review. Because any challenge must be heard in an appellate court, with statutory directives designed to expedite a challenge, Sacramento has a key legal advantage in the race to build an arena.  Co-Author of the law and member of Sacramento’s arena task force Darrell Steinberg is expected to attend today’s meetings with the joint committees to answer any questions about how the law works.

Should the NBA’s BOG approve the sale of the Kings to Sacramento buyers, an environmental review lasting for one year would result in a construction start date of no later than November 2014 when considering the maximum 175 day review for any environmental challenges.

Because of the certainty the expedited review process provides, Sacramento can present a firm timeline to the league whereas Seattle’s environment laws have no time limit for challenges to be heard and any legal proceedings go through superior (lower) courtrooms.  The expedited process in California takes place in appellate courts, and also gives those courts additional tools to further expedite an arena deal.

The second difference is the amount of resistance the Seattle arena deal is currently facing and will continue to face until all environmental challenges are heard. There are already challenges under Washington environmental laws that will take anywhere from one year or more to resolve according to Peter Goldman, who is currently suing the city on behalf of the local Longshoreman’s union over traffic concerns and the lack of a viable alternative site analysis required under state environmental law. The union’s main concern is union jobs at the port, which it wants to see grow as trade along the Pacific rim grows.

The main issue for opponents of the arena deal is where the arena is being placed. Opponents contend that the stadium district that houses the two existing stadia for the Seahawks, Mariners and Sounders is already congested with traffic that interferes with the Post of Seattle. They’re arguing that even with attempts to mitigate additional traffic issues, the development of an “L.A. Live-like facility” on top of the other stadiums is an issue that cannot necessarily be fixed.

Whether or not these opponents’ claims have merits, league sources expect Hansen to be forthcoming about the possibility that the challenges delay the opening of the new facility.

There has been Seattle-based talk about a pair of pro bono attorneys in Sacramento that have been pursuing a potential lawsuit demanding a voter referendum on the recently approved arena deal.  Those attorneys sent a copy of their ‘intent to commence action’ (a threat to file a lawsuit) to Seattle television stations on Tuesday.

The attorneys contend that Sacramento’s parking monetization plan is effectively a tax that needs to be voted upon by the public, but according to Sports Illustrated and NBA.com Legal Analyst Michael McCann, who has been following the Kings situation closely, he said that’s not likely to be the case.

“An administrative action like a parking monetization plan is not generally subject to referendum, but could be subject to an administrative review by a local agency such as the city treasurer or zoning board.”

Sacramento sources told PBT that they have “no concern about a referendum whatsoever.”