Will Seattle billionaire Chris Hansen drastically overpay for the Sacramento Kings?

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News of billionaire Chris Hansen striking a deal with the Seattle City Council hit the wire late Monday night, as the sides have agreed to a framework on an arena deal that moves them a few smaller hurdles away from becoming an NBA-ready city (courtesy of Chris Daniels of King 5 in Seattle).

In a bit of twisted irony, the city that had its team stolen away will now set its sights on any available team, and there is no team that is more available than the Sacramento Kings, who nowadays have a different rumored destination every week.

This most recent news solidifies Seattle’s place on the top of that list, though they still need the Maloofs to sell, and they still have to outdo Sacramento. Neither task should be considered a slam dunk, or even likely at this point.

The idea that Sacramento could lose its team, of course, is a black eye for the league as the city has supported its team in every conceivable way, including where it counts financially and at the ticket gate. The only reason we’re having this discussion is because the Maloof family, internal squabbles aside, doesn’t want to be there.

Their roots are in New Mexico, Los Angeles, and Las Vegas, and being broke in relative NBA owner terms they’re looking for a short-term infusion of cash, which they hope to find by moving the team to another city that will both build them an arena and also let them keep the profits from it.

Cities such as Virginia Beach, Louisville, Vancouver, Kansas City, and the like are potential candidates if anything because they’re willing to pay to be on the NBA map. But the math starts to get fuzzy because the markets are smaller than Sacramento, and the Maloofs end up no better off than they were in Sacramento over the long haul.

That, and the NBA doesn’t really want those markets, at least not at the expense of Sacramento, where the league enjoys the No. 20 sized TV market without interference from other sports leagues. When you factor in the public relations hit of moving the team – it’s hard to see the league supporting a move and to date we have not.

Even when considering a larger market like Anaheim, the league isn’t falling all over itself to allow a move. The NBA blocked the Maloofs’ relocation attempt last year after Sacramento mayor Kevin Johnson raised over $10 million in untapped sponsorships at the drop of a hat and promised a viable arena deal. Things seemed to be moving along reasonably well and a deal for a new arena was agreed to in principle during All Star weekend in Orlando.

But that was before George Maloof created a how-to-guide for burning bridges in Sacramento. He torched the deal live on public television in a tirade for the ages, and any goodwill that was leftover at the league offices was probably lost. Commissioner David Stern has used measured words in describing the arena situation since then, and none of them have painted the Maloofs in a flattering light.

In fact, the commissioner would probably like to see the family sell the team, but as usual the issue comes down to money, antitrust law, and the other 29 owners that one day will be negotiating with both the league office and their home city about something.

Aside from not wanting anybody to tell them what to do, owners want the right to move their teams to the cities they feel they can make the most money in. Leagues don’t like to allow this as it creates a number of problems, and the courts have found that the intersection of those opposing ideals lies in the concept of a relocation fee. Relocation fees are the amount that a league can charge to indemnify parties that are damaged by an owner’s decision to move.

The law is much more detailed than this, and the case law that has been favorable to relocating owners isn’t an exact match to the situation in Sac, but one thing is clear – neither party wants to land in court over this.

And that’s why the Kings arena situation has been allowed to play out, to the detriment of the league’s image, and as an affront to the other 29 owners that one day will have to negotiate with their municipalities.

While it’s unclear right now what impact the Maloofs’ apparent bad faith dealings in Sacramento will have on other team owners seeking public subsidies, a small shift in public sentiment could cost the league and its players tens of millions of dollars and a large scale shift could put the billion dollars the league has received in subsidy back on its balance sheet.

But even with the Maloofs’ name now toxic inside the league and out, to the point it’s being pulled off the signage at the Palms, the league cannot afford a bad ruling in an antitrust case. Aside from treble damages the Maloofs would seek, which are significant, a bad ruling would be held over all sports leagues’ heads by owners wanting to play franchise free agency.

The best hope for the league has always been to see the issue play out on its own, with the Maloofs realizing that they have no options besides going back to the city with its hat in its hand, or selling the team outright.

And with Seattle standing in the on-deck circle and doing what they need to do to land itself an NBA franchise, the question on everybody’s mind is whether or not Hansen will be able to drastically overpay for the Kings.

The Maloofs owe about $70 million to the city of Sacramento and well over $100 million to the NBA, and a sales price in excess of $400 million is needed to give the 43 percent stakeholders an easy way out of Dodge. Considering the franchise is valued at $300 million by Forbes, which is a generous valuation, Hansen would need to hope that the bump of moving to a larger market in Seattle and owning land near the arena would justify the Maloofs’ likely asking price.

But more importantly, when you factor in a relocation fee, which sources tell me will be assessed to give Sacramento buyers a fair shot at buying the team, Hansen could be looking at $500 million or more to buy the Kings. After paying $300 million and counting to build an arena, that’s approaching a billion dollars to get in the game.

It’s possible that the man known for his patience will wait for a less toxic situation to pop up, and it’s fair to wonder now if the league would reconsider expansion now that multiple cities have expressed interest in NBA clubs.

As for Hansen’s involvement with the Kings, he said weeks ago that he had not made an offer to purchase the Kings after a local report emerged saying otherwise. If he decides to make a play for the team, and assuming the Maloofs are ready to cry uncle, it probably puts Sacramento on notice that it’s time to formalize an offer to buy the team.

Sources on the city’s side have indicated that they have more than one buyer lined up, and ultimately Seattle’s progress could force some sort of endgame here. If the goal is to sell for the Maloofs, then they will likely have squeezed the best sales price out of Sacramento that is possible, and anything close to a Seattle offer (after the relocation fee) will likely be supported by the league.

If the Maloofs still don’t want to sell, they’ll continue to play the dating game with other cities and the league will continue to deal with a public relations nuisance. The family will not get a different arena deal in Sacramento, and any talk of renovating the unrenovatable Arco Arena with public funds has been met with collective laughter both inside and outside of the city.

Even if the Maloofs can find a sweetheart deal somewhere else, it’s unlikely that they’ll have the clout to force a move the league doesn’t want. Sure, they may have some antitrust law on their side, but they probably can’t afford the lawsuit and even if they win, they’re left in a place where they’re not wanted. They don’t have the fortitude of antitrust victor and deceased Raiders owner Al Davis. And other than George, they want to be wanted.

In Sacramento, the framework for a deal exists not just for the Maloofs but for any owner that wants to pick up the ball and run with it.

The deal that was struck between the city, arena giant AEG, and the NBA is still considered a good deal by each of those parties, and the only thing that would theoretically change are the owner contributions. In a concept the Maloofs cannot come to grips with, if a new owner wants to pay more for arena construction they can enjoy more of the profits.

Unlike anywhere else in the country, including Seattle, an agreement can be reached in Sacramento under the current terms and design could start within about a month according to sources.

As usual, though, the story goes right back to the Maloofs and whether or not they’re ready to face the music. They can’t do nothing, as Arco Arena is dilapidated and barely up to NBA code. They’ll eventually need to do more than polish the concourse floors.  Eventually, they’ll either need to take the Sacramento offer, try to make something out of nothing in an unlikely move out of town, or sell the team.

And when the music stops and the only thing left to do is sell, will Hansen or any other buyer want to drastically overpay for this particular franchise to the extent that Sacramento can’t match the offer?

Until these questions are answered or the Maloofs are nudged out the door with greater efficiency, Sacramento Kings fans have to endure the same fears that plagued Sonics fans before their team was ultimately ripped away.  And that’s just not right.

Missouri U.S. Sen. Josh Hawley calls for NBA to put more politics into sports

Missouri U.S. Senator Josh Hawley
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Americans are increasingly inviting progressive politics into sports. Football players kneeling the national anthem are no longer an easy target. Even President Donald Trump has softened his tone on Colin Kaepernick.

So, some Republicans are pushing for MORE politics – their politics – in sports (sometimes under the guise of less politics in sports).

Missouri U.S. Senator Josh Hawley, like Tennessee U.S. Senator Marsha Blackburn, has criticized the NBA for its relationship with China. It’s grandstanding while the United States itself has a trade deal with China.

Now, Hawley is objecting to the NBA’s pre-approved list of social-justice messages players can wear on their jerseys.

Hawley press release:

Today Senator Josh Hawley (R-Mo.) is sending a letter to NBA Commissioner Adam Silver blasting the league’s apparent decision to strictly limit messages players can wear on their jerseys to a few pre-approved, social justice slogans while censoring support for law enforcement officers or the military and any criticism of the Chinese Communist Party (CCP). Senator Hawley writes that, as the NBA is now sanctioning political messages, they must stand up for American values and make clear where they stand on China’s human rights abuses.

Senator Hawley writes, “The truth is that your decisions about which messages to allow and which to censor – much like the censorship decisions of the CCP – are themselves statements about your association’s values. If I am right – if the NBA is more committed to promoting the CCP’s interests than to celebrating its home nation – your fans deserve to know that is your view. If not, prove me wrong. Let your players stand up for the Uighurs and the people of Hong Kong. Let them stand up for American law enforcement if they so choose. Give them the choice to write ‘Back the Blue’ on their jerseys. Or ‘Support our Troops.’ Maybe ‘God Bless America.’ What could be more American than that?”

OF COURSE the NBA was going to limit jersey messages to a pre-approved list. The league doesn’t want the pressure of censoring players’ individual choices. Nor does the league want to condone messages that would offend offend customers and jeopardize revenue. Support for Hong Kong protesters would definitely qualify as financially perilous.

The NBA – a business trying to make money – wants to support its employees and appeal to its audience. These relatively benign phrases accomplish those goals.

That doesn’t prevent NBA players from criticizing China. I take NBA commissioner Adam Silver at his word (especially after the Daryl Morey controversy) that the NBA endorses its employees right to speak out.

The NBA just isn’t going to allow players to give just any message through their jerseys.

Some players are understandably bothered by that limitation. But the biggest pushes for change aren’t going to come through multi-billion-dollar corporations. That’s just reality.

Likewise, though Hawley raises legitimate concerns about China’s treatment of Uighurs and Hong Kongers, scolding an American company for legally acting in its best financial interest is… um… certainly a choice for a U.S. Senator.

Also, ESPN’s Adrian Wojnarowski sent a profane two-word response in response to Hawley’s press release.

Wojnarowski:

NBA executive predicts every team will lose money next season

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The NBA is launching an unprecedented and ambitious operation – hosting the rest of its season in a centralized location with frequent testing – because that’s what’s necessary to play amid the coronavirus pandemic.

What about next season?

Coronavirus will likely remain a danger on Dec. 1, when the league hopes to begin. That threatens fan attendance. Heck, that could undermine teams playing at all in their home markets. All 30 teams, rather than just 22, adds complications.

Even if the season gets off the ground, there will be financial issues.

Brian Windhorst and Tim Bontemps of ESPN:

“The truth is, things are changing so fast that, when it comes to next season, the best we can do is put a stake in the ground and make a guess,” an Eastern Conference team president said. “The reality is nobody is probably going to operate in the black next season.

“The only question is how much each of us are going to lose.”

NBA owners love to cry poor. The actual math often reveals a different picture. There are complexities that teams can hide.

Some teams have already cut employees salaries. But some teams are also doing extravagant things like shipping their courts to Disney World for practice:

Still, NBA commissioner Adam Silver estimated 40% of league revenue comes from ticket sales and other game-day sources. If teams are ever believable about losing money, it’d be now. Coronavirus has wrecked so many sectors of the economy.

Revenue falling significantly would be felt by players, who – per the Collective Bargaining Agreement – receive about half of Basketball Related Income. (That 50-50 agreement supersedes players’ stated salaries in their contracts.)

It’s undecided how and when players would suffer those losses.

The 2020-21 salary cap could be reduced. But that would put the burden on players – free agents, draft picks – signing new contracts next offseason.

That’s why the salary cap is reportedly expected to remain roughly flat. There are a couple options within that scenario.

Players could have a larger share of their salaries withheld (as they’re doing this season). Then, at the end of the season, owners would return whatever money is necessary to reach the 50-50 split. However, that would reduce players’ spending power during the season.

Or players could collect their usual salaries with an artificially high salary cap. However, that would likely mean they get more than their entitled 50% share and the salary cap would be reduce in future seasons to offset. Current players – some of whom won’t be in the league in future years – would probably love that. Owners likely wouldn’t accept paying players more sooner.

Increased withholding from player salaries is probably the best option. But there’s plenty to decide about the exact withholding amount and how long the money is held. To ensure enough money is withheld, the percentage should initially be fairly high. Then, as the revenue picture becomes clearer, the withholding amount could decrease in future paychecks.

Of course, that assumes the league finds a safe way to play. Which is the biggest challenge.

Report: Wizards’ Thomas Bryant and Gary Payton II test positive for coronavirus

Wizards players Thomas Bryant and Gary Payton II
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Bradley Beal not playing sunk the Wizards’ for the NBA’s resumption, anyway.

If that and Davis Bertans sitting out weren’t enough, Washington is also without Thomas Bryant, Gary Payton II and Garrison Mathews.

Ava Wallace of The Washington Post:

The NBA announced 25 players tested positive from June 23-29. It’s unclear whether Bryant and Payton were among that group or additional positive cases.

It’s also unclear whether Bryant, Payton and Mathews will join the team at Disney World.

Bryant would be a particularly significant loss. His optimism and energy in tough situations are exactly what the Wizards need right now.

With the Nets severely shorthanded and the Magic looking uninspiring, Washington still has a path to the playoffs.

LaMelo Ball reportedly wants to play for New York Knicks

LaMelo Ball Knicks
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Ultimately, LaMelo Ball does not control where he plays basketball next season. On Aug. 25 the ping pong balls will determine the NBA’s draft order, then on Oct. 16 a team will select Ball and he will have to play in that city (or sit out all organized basketball for a year so he can re-enter the draft, which will not help his stock).

New York is reportedly high on Ball. It turns out, LaMelo Ball wants to play for the Knicks — shocking, I know — reports Ian Begley of SNY.TV.

As teams do their homework on players in the draft, there’s been a consistent theme about LaMelo Ball: multiple teams believe Ball and those in his circle prefer that he lands in New York. (Those teams have picks projected later in the first round than the Knicks, for what it’s worth.)

LaMelo’s father LaVar has said as much, very loudly, but nobody takes what he says terribly seriously. Plus, again, ultimately LaVar and LaMelo do not control the process. The ping pong balls and picks will fall where they may.

LaMelo is considered a likely top-five pick in the 2020 NBA Draft. The Knicks have a 37.2% chance of landing a top-four pick, where they have a shot at selecting Ball. They also have a 50.4% chance of selecting seventh or eighth, when he is likely off the board (and whether Ball is worth trading up for is up for debate… at best).

NBC’s own Rob Dauster has said LaMelo Ball has the highest upside of any player in the 2020 NBA Draft. The potential for stardom, especially in the modern game, is there. He’s a 6’7″ guard with impressive handles and elite court vision, which combine to make him dangerous initiating the pick-and-roll. Ball’s supporters see a ceiling of a Trae Young, All-Star level of offensive impact for Ball.

Whether Ball can reach that ceiling is another question entirely. He lacks a consistent shot, especially from deep — he shot 37.5% overall and 25% from three in Australia.  In addition, his decision making needs work, his defense is unimpressive (and he seems disinterested), and there are lingering questions about his work ethic.

Ball is the classic high risk/high reward player — maybe he can be developed into an elite star, but his floor is also pretty low.

Knicks fans can debate amongst themselves if LaMelo Ball is the kind of player they need, but New York is where he wants to be.