Future of NBA arena subsidies, market comparisons to decide Kings’ fate

29 Comments

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.

Brooklyn Nets going gray with stylish newly redesigned court

Courtesy Brooklyn Nets
1 Comment

The Brooklyn Nets already had one of the sharpest court designs in the NBA.

However, they felt it was time for an upgrade — and they went gray.

It’s bold, not traditional, I’m curious how it looks on a broadcast, but the new look kind of works. It feels very Brooklyn.

Zach Lowe of ESPN had a story on how this all came together.

But [General Manager Sean] Marks wanted change, to put his artistic imprint on the franchise he has helped reinvent, and he had a radical idea: a gray floor meant to evoke blacktop courts, the streets of Brooklyn, and the borough’s “industrial vibe,” he says. Gray has been on the fringes of the team’s Brooklyn-era palette, including on the alternate Brooklyn Dodgers-themed uniforms they wore in past seasons.

Everything Marks and the Nets’ creative team toyed with from there centered around gray. It was a risk — an unknown. The NBA says it has never had an all-gray court, though a few teams — the New Orleans Pelicans, Denver Nuggets, Cleveland Cavaliers, Milwaukee Bucks, and others — have shaded enlarged logos and landscapes into sections of their floors…

There was no pushback. The league liked the idea right away, Marks says.

With Kyrie Irving trying to lead an intriguing young core — and Kevin Durant maybe coming back before the playoffs — the Nets are going to be a team to watch this season. We’re going to see a lot of that gray floor, we’ll see how it grows on us.

Nets reportedly not likely to sign Carmelo Anthony, who still waits for his shot

Elsa/Getty Images
1 Comment

NBA training camps open next week, and Carmelo Anthony will be… on a couch somewhere.

Actually, probably in a private gym in New York working out and staying ready for the day the phone rings. However, he will not be in an NBA gym with an NBA team.

One place he had been rumored to go was Brooklyn, where Kevin Durant and Kyrie Irving were reportedly pushing for him. That, however, is not happening, reports Shams Charania at The Athletic.

After losing Wilson Chandler to a 25-game suspension, Anthony and players such as Dante Cunningham, Lance Thomas and Luol Deng emerged as viable options to sign. There’s been a sense around the Nets that players are hopeful to bring in Anthony, but the trust belongs with the front office.

However, the Nets are very unlikely to sign Anthony as of now, league sources told The Athletic.

It appears more likely that the team will decide to sign players it has worked out over the past few weeks, such as Thomas and former Minnesota Timberwolves and Los Angeles Clippers forward CJ Williams, sources said. The Nets have two roster spots left.

Executives around the league think there is a place for Anthony in the NBA. As has been written here previously, people I’ve spoken to about him say something along the lines of “he absolutely could still play in the league, he’s just not a fit with us.” After how things ended in Oklahoma City, and then went last season in Houston, they question if he will accept and off-the-bench scoring role. Anthony has said he would, his people have pushed that he would, but people are not sold.

Anthony’s going to get his shot, and maybe still in Brooklyn. It will be somewhere. But like Dwight Howard with the Lakers this season, this is his last shot — play a role, play hard, get it right or nobody is taking a chance on him again.

 

Report: Andre Iguodala, Grizzlies reach agreement, he will not report to training camp

Gregory Shamus/Getty Images
Leave a comment

Andre Iguodala was traded to Memphis in a cost-saving move during the Warriors’ wild offseason. The franchise was upfront about the possibility, Iguodala is a smart man who understands the business of the league, there are no hard feelings.

However, he doesn’t want to play for Memphis. The Grizzlies don’t just want to buy him out — unless he’s leaving a lot of money on the table, which he will not do — they want to trade him for picks or a young player coming back to help their rebuild.

That left the sides at an impasse, but they have reached an agreement that allows Iguodala to not report to training camp and instead keep working out on his own, reports Chris Herrington of the Daily Memphian.

Andre Iguodala will not attend Grizzlies’ Media Day on Monday nor report to the team’s training camp under an arrangement reached between the two sides, according to team and league sources.

Iguodala will remain on the Grizzlies roster, likely well into the season. However, the team agreed the veteran can continue private workouts at a location of his choosing while Memphis pursues trades involving the former Golden State Warrior and NBA Finals MVP.

This almost certainly drags out into December, and likely much closer to the Feb. 6 trade deadline. On Dec. 15 the players who signed contracts this summer can be traded, opening up the trade pool. By then, contending teams — or, teams that fancy themselves contenders — will have a better sense if they could use Iguodala off the bench to boost a playoff run. And if they have the players and picks to get a trade done.

Iguodala talked about his situation in Memphis with NBC Sports Bay Area’s Monte Poole over the weekend.

“We’re trying to figure out things on both sides. They’re trying to figure out some things, and I’m trying to figure out some things. As of today, we’re on the same page. Camp opens the next week. We’ll see. We’re on the same page, though.”

“At this point, the only buyout that makes sense — if I’m speaking on someone else’s behalf, thinking as an agent — is you don’t leave money on the table,” he says. “Especially in this league. Because you’ll never get it back, no matter what people say. Negotiations are a tactic, so you’ve got to be careful how you approach it, or how you verbalize what you would do going forward. But you can’t leave anything on the table.”

Iguodala is in the final year of his contract, worth $17.2 million this season, and he wants to get paid. The Grizzlies want to jumpstart their rebuild. The best option for both sides is just to wait it all out, which is what they have decided to do.

For now. Expect Iguodala rumors to start ramping up around Christmas.

Andre Iguodala tells the story of how he knew he would get traded this summer

Jason Mendez/Getty Images
1 Comment

Andre Iguodala is a smart man, a veteran who gets the business side of basketball.

Which is why he knew he was likely getting traded this summer, especially if Kevin Durant left.

Iguodala told Monte Poole of NBC Sports Bay Area how he knew it would go down, and the inside joke he had with his wife that came true.

“But I have a sense that something is going down; Bob Myers and I are pretty cool. We have our conversations, so we’re on the same page. It was, ‘It might happen, but it might not. Most likely, it will. So, we’ll see.’

“So, I’m texting my wife, telling her I’ll probably get traded because I think it’s 100 percent sure, even though everyone else is saying, it’s only a chance. Then, once KD (Kevin Durant) left, I’m like, ‘Yeah, I’ll probably get traded. They’re probably going to do a sign-and-trade, so they can get something back, to at least get assets for him.’ No one was thinking that. But I was thinking they’ll want to get assets back because they can’t just let him go. And they’ll probably move me as well. So, she asked me where I thought I would go. I said, ‘I don’t know, I’ll probably end up in Memphis or some s–t.’

“She says, ‘For real?’ I was like, ‘Maybe. But probably not. I don’t know.’

“The next day, I got the message. It was Memphis. I fell out laughing.”

Iguodala remains a member of the Memphis Grizzlies, for now. Iguodala would like a buyout and to get to another contender, but he doesn’t want to leave a lot of money on the table because, as he told Poole, he would never get that money back. Memphis, on the other hand, would rather trade Iguodala in an effort to get a pick or player back that can help their rebuild. The Grizzlies are not going to be down with a buyout unless there are significant savings. Iguodala says that both sides are “on the same page.” We’ll see if the good vibes continue once training camps open next week.

Whatever happens, it’s going to be weird not seeing Iguodala in a Warriors uniform next season. He was the glue that helped hold the Warriors together and win three titles, seeing him in Grizzlies’ blue will just look strange and out of place.