Sacramento mayor Kevin Johnson lays out framework for Kings to stay put

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With reports swirling that the Kings’ move to Seattle is a mere formality at this point, the story on the ground in Sacramento is much, much different.

In the end, this story comes down to three things:

1. Can Seattle’s Chris Hansen close a deal with the Maloofs to buy the Kings? (According to reports, it was first and goal at the one-yard line about a week ago)
2. Can Kevin Johnson secure the opportunity to meet or beat that offer?
3. What will the NBA’s Board of Governors decide to do?

As we reported in September, in order for Seattle to be able to beat Sacramento’s offer financially they would have to drastically overpay for the team. This is because Sacramento owners do not have to worry about the Maloofs’ loan to the city, relocation fees, or moving costs.

The offer in Seattle has been reported to be $525 million based on the overall valuation of the franchise, so Sacramento can pay $425-$450 million based on the overall valuation of the franchise and still end up providing more money to the Maloofs than Seattle can.

With sources speaking to PBT on the condition of anonymity saying Sacramento has multiple buyers that meet both the city and NBA’s criteria for owning a franchise, the pertinent question has been whether or not David Stern and the other owners would allow Sacramento to present their offer.

We got that confirmation today at the State of Downtown Sacramento Breakfast when mayor Johnson announced that Stern had indeed approved Sacramento’s request to speak at the Board of Governors meeting in April.

This is an extremely significant development in this story. First, it displays the trust that has grown between Stern and Johnson, as well as between Stern and the city of Sacramento, who has met every deliverable that has been asked of them in the Maloof debacle.

Second, it shows that Stern and the other owners are willing to let this relocation issue play out at a more visible level. If they had no intention of giving Sacramento a chance, then it would be a curious decision to give the critical voices blasting the NBA for its relocation practices the oxygen to continue bashing them.

Indeed, the city of Sacramento has presented a “model offer of public funds” according to one league source, and for a complete rundown of what a decision to move the team from Sacramento would look like, you can check out previous write-ups about the NBA’s billion dollar subsidy industry and how that plays into the league’s decision-making here.

In short, the league has leveraged cities into providing $3 billion of public money since 1990 for the creation of state-of-the-art arenas – all predicated on the assumption that a long-term partnership would be honored so long as both parties are acting in reasonable good faith.

If Sacramento has done everything it can to keep their team, a fact that is not in dispute, then leaving them at the altar because the Maloof family ran their own finances into the ground is going to be a major problem the next time they go to ask a city for money.

Most importantly, with sources close to the situation confident that they will have an actionable offer that will reasonably meet or beat the amount of money that Hansen can put into the Maloofs’ pockets — assuming he and partner/Microsoft CEO Steve Ballmer don’t turn into the drunk guys at an auction — then Stern and the other owners are going to have to make an unprecedented decision to move the team out of Sacramento.

Not only would a Sacramento offer likely break the NBA record purchase price of a franchise, and include an actionable plan to build a brand new arena with a league vetted public-private partnership, but a decision to move the team would mark the first time a mid-market city had been poached for a larger market when the original city had everything the league could ever ask for in place at the time of the move.

Looking at the Maloof side of the equation, they are both driving this discussion but are also operating at an extremely weakened position in this debacle. Owing as much as $200 million by various reports and facing a financial crisis of their own (they just made a cash call to minority investors according to NBA.com’s David Aldridge), it would be a shocking move if they did not sell the team at this stage of the game.

Furthermore, both the family and the NBA could be in for a messy breakup should Sacramento not be given a fair chance to buy the team.

Any lawsuit filed by the city to stall the deal for what legal sources say could be any number of criteria relating to the improper moving of the franchise, including but not limited to union workers’ rights and the lack of a local bidding process, would necessarily put the Maloofs into a lame duck season in Sacramento.

When considering the Maloofs’ messy financial situation and considering the league’s likely desire not to get into a protracted battle over the Kings, all signs point to Sacramento getting a chance to present their offer with everybody at the table willing to vote their way should the deal points pan out as Sacramento sources say they will.

For all of the talk about the Maloofs not wanting to sell to a Sacramento buyer, and confirming Sam Amick’s must-read report about the situation, the talk of Ron Burkle appears to be overstated at this point.

There are sources in Sacramento that believe he could still be a party to these talks, but that the KJ camp is not relying on any one white knight at this time. It has been reported here and elsewhere that the Maloofs don’t want to sell to him because of their dislike for the billionaire, who they believe ruined their chances to move to Anaheim in March of 2011.

The reality here is that they are going to have to fall in line with what the NBA’s BOG decides or face the prospect of a lame duck season going heads up against both the NBA and Sacramento, and in their financial situation that is a non-starter according to most sources with knowledge of the situation.

These sources aren’t going to predict what the Maloofs will try to do, but most believe that the family will take a financially favorable offer in Sacramento and also that if the league decides to back Sacramento in a relatively close deal that they family will back down and take the offer.

With the decision to have Kevin Johnson out to the BOG meetings already made, the focus of this story shifts to the work at hand for Sacramento. They have to get their ownership group finalized and ready for presentation.

Those following the situation should not be surprised if a deal is announced in Seattle, but like the San Francisco Giants’ eventually blocked sale to Tampa Bay in August of 1992 this will be decided by the owners once Johnson’s deal is finalized should Hansen come to an agreement with the Maloofs.

And for those handicapping the action, Kevin Johnson is not going to make that presentation without having owners in place that meet the shared criteria of both his camp and the NBA office. He will come boasting a ravenous No. 20 television marketplace with some advantages and disadvantages compared to Seattle, but nobody will deny Sacramento’s appetite for NBA basketball.

In 24 hours since announcing their grassroots effort, Here We Buy has received pledges totaling nearly $10 million from local individuals and businesses toward season tickets under the new ownership group.

Johnson will come armed with the ability to force the Maloofs into a lame duck season if he has to, but mostly he will arrive at that meeting with yet another stirring example of his city stepping up with all odds against it.

The images of the Sign Lady, Carmichael Dave on a ladder telling crying Kings fans that ‘this is not over by a long shot,’ and the 600-1000 arena workers that are going to lose their jobs are not going to be lost on the proceedings, and for the owners without tear ducts in their eyes they will look at the financial risk of a decision against Sacramento side by side to the incremental benefit of a very qualified Seattle offer.

That decision to rip out Sacramento’s heart is all risk and marginal gain, assuming Kevin Johnson has one more career-defining slam dunk left in him.

And since he hasn’t missed a shot yet, it seems silly to bet that he’s going to fall apart in the fourth quarter.

Damian Lillard opposes idea of later NBA season start running into summer

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At the MIT Sloan Sports Analytics Conference a few weeks back (although it feels like a lifetime ago), Atlanta  CEO Steve Koonin suggested the NBA should permanently shift its schedule to a mid-December start with the Finals running into August. The idea was to stop going head-to-head with the NFL and college football at the start of the season. Then the pushed back playoffs forced by the coronavirus have made that discussion more relevant. NBA Commissioner Adam Silver has said everything is on the table.

Damian Lillard is not a fan of the idea.

He likes the schedule just the way it is, something he said during a video conference with the media on Tuesday, hat tip to Dwight Jaynes of NBC Sports Portland.

“I just don’t see it. I mean, the season starts when it starts now, then February all-star weekend, getting toward the end of the season in April and then getting into the playoffs. You get that early June Finals and then you get to go off into your summer…

“You get to enjoy real-time summer,” Lillard said. “Our break is into the summer and then you get to come back as summer is leaving. I think that’s been perfect…

“It’s been perfect for us,” Lillard said. “So, for that to change and for things to be pushed back, I’m definitely not a fan of that and I don’t see many guys being a fan of that.”

Lillard is not alone in thinking this way, but Silver is more open to change than most sports commissioners. That said, changes that break with long-standing traditions are hard to make a reality.

There would be a lot of questions around a schedule change. Would the ratings still be as high for a Finals series in the heart of the summer? The NBA season no longer would sync with the NCAA or international leagues’ schedules, leading to questions about the draft and timing for players who want to test the waters. There would need to be reworked television contracts, both regionally and nationally. It could make scheduling a challenge at arenas used to having more concerts and other events in the summer.

Plus, all of this would need to be negotiated with the players union — and Lillard speaks for a lot of players on this issue.

If the NBA could somehow convince players that starting later meant more money in their pocket, those union negotiations would take on a different tone. But would the move increase revenue? That’s not an easy sell.

With this NBA season likely running late, the start of next season could be pushed back, and this theory could get a little bit of a test. Or, the next season could be shortened a little to get the league back on its regular schedule.

Which would make Lillard happy.

Report: NBA deprioritizing playing regular-season games for local TV

Steve Kerr and LeBron James before NBA game
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The NBA is financially incentivized to play more regular-season games to satisfy local-TV contracts.

How does that square with resuming play – currently suspended due to the coronavirus pandemic – with a play-in tournament and playoffs?

It doesn’t.

Marc Berman of the New York Post:

According to one source, getting some teams to a magical number of 70 regular-season games had been a goal, but in the last week has taken on less of a priority.

This stoppage is going to cost the NBA a lot of money. There’s no way around that. Not every source of revenue can be preserved. It’s about finding the optimal setup.

Importantly, canceling games could allow the NBA to reduce player salaries through force majeure. Of course, the union would consider that action when negotiating how to proceed.

LeBron James advocated for playing some regular-season games before the playoffs so everyone could get back into shape. But Steve Kerr called it very unlikely the Warriors would play another regular-season game. Perhaps, playoff-bound teams like the Lakers will play tune-up regular-season games while Golden State – the only team officially eliminated from the playoff race before the hiatus – doesn’t. It’d be a little odd to have such different formats, though. (Then again, these are odd times).

Considering this report, we ought to give more credence to the idea that Kerr knows something about the NBA’s plan and that the regular season is finished.

Lakers update that all players ‘currently symptom-free of COVID-19’

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Nearly two weeks ago, the Lakers announced that two of their players tested positive for the coronavirus. “Both players are currently asymptomatic, in quarantine and under the care of the team’s physician… All players and members of the Lakers staff are being asked to continue to observe self-quarantine,” the Lakers said at that time.

On Tuesday, the team provided an update saying nobody on the team is showing any symptoms after a couple of weeks of quarantine.

“All Lakers players are currently symptom-free of COVID-19. The team will continue to follow the health and safety guidelines set by government officials, the Lakers and the NBA,” the statement said.

The Lakers’ players who tested positive were never publicly identified (in fitting with HIPAA regulations).

A total of 10 NBA players — plus five members of staff associated with teams — have tested positive for the virus that has upended life in the United States. None reportedly have had to be hospitalized. Players such as Marcus Smart and others have recovered and free from the virus.

The NBA remains suspended, with the league hoping to jump-start the playoffs in June, possibly with all the teams in one location.

Report: NBA won’t hold draft until after season

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The NBA draft is scheduled for June 25. Most expect that date to change as the coronavirus pandemic causes postponements around the world.

Apparently, the draft will come after the NBA season – whether the season is completed in a modified format or just cancelled.

Adrian Wojnarowski of ESPN:

I think everybody in the league feels it’s almost impossible to have a draft if you still have a season that’s ongoing.

You can’t have a draft while teams are still playing. You can’t have some teams able to do trades because their season’s done and then some teams unable to do trades because they’re still playing.

It doesn’t strike me as difficult to hold the draft before the season ends. Teams wouldn’t be allowed to trade current players. The restriction would apply across the board, just like the interrupted pre-draft process. That’s not ideal, but compromises must be made amid this chaos.

Importantly, holding the draft sooner could appeal to both sides of the Collective Bargaining Agreement.

It’d be an opportunity to hold a revenue-producing TV event. Obviously, drafted players wouldn’t attend a mass gathering. But with sports fans starved for content, people would watch the selections. A handshake with NBA commissioner Adam Silver is only a small part of the festivities.

The National Basketball Players Association should also push for an earlier draft. Prospects want information sooner so they can prepare for their next step – whether that’s the NBA, returning to college or playing overseas. That said, the union has bigger priorities than potential future members.

So, it’s easy to see why postponing the draft has gained momentum, even if that’s not a no-brainer solution.