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

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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.

Rumor: People close to Kawhi Leonard think he’ll re-sign with Raptors

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Kawhi Leonard has made it known that he wants to play in Los Angeles. Specifically with the Lakers, although playing for the Clippers reportedly has become more of an option as of late for Leonard.

Still, for the meantime the former San Antonio Spurs star will be playing with the Toronto Raptors, at least to start the season. Raptors general manager Masai Ujiri leveraged his goodwill from the city as well as the future of his team by trading DeMar DeRozan to get Leonard. Now, the question is whether Leonard will be healthy enough to play, or whether he will prove difficult much in the way he was last season in Texas.

Rumors are already swirling in Ontario about whether or not Leonard will prefer to stay with the Raptors after this season when he can opt out of his current deal. According to at least one rumor, some close to Leonard think he will stay with Toronto.

Via The San Diego Union-Tribune:

Here’s what someone who knows Leonard as well as anybody told me privately: “He’s going to fall in love with Toronto – it’s going to happen. He’s not going to leave, I’m telling you.”

We have to treat this as hearsay at this point, as a lot of the recent talk from people rumored to be close to Leonard has turned out to be inaccurate.

Even further, Leonard’s wants and actions have been hard to predict. Two years ago, Leonard changed agents and with the help of his uncle, has taken a new direction with his business management. It’s been staunch, and conservative, and stubborn. On paper, forcing his way away from the best-run franchise in the NBA is a real head-scratcher.

That’s also why you can’t necessarily dismiss the idea of Leonard staying in Ontario. His wants and needs seem to shift, and what will affect him one day to the next seems hard to gather. It’s entirely possible that he ends up liking playing in Toronto, and the city itself, which is magnificent.

Yes, we all saw the rumor that Leonard doesn’t like the cold, but that contradicts with the idea that Leonard is “all about basketball”. It’s not as though the basketball situation in Los Angeles is better than the basketball situation in Toronto. And despite their playoff failures, you could say that management installed in Canada is better than those acting in Southern California.

We will see whether Leonard even plays a significant amount of games for the Raptors. We all thought it was impossible that he would sit out an entire season for San Antonio last year, and now we can’t dismiss that possibility moving forward. Getting him on the floor and in a Raptors jersey is first.

Then we can talk about him re-signing in Toronto.

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JR Smith finally says goodbye to LeBron 21 days after Lakers announcement

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Cleveland Cavaliers guard JR Smith isn’t the most aware player on the court. We learned that the hard way during the NBA Finals.

But life in Cleveland will move on, and with Smith apparently still on the roster for the foreseeable future. Smith was at one point in time a favorite of LeBron James, who is now wearing a Los Angeles Lakers jersey.

Apparently, that fact has finally kicked in for Smith. On July 22nd, three weeks after James made it clear that he was heading to the Lakers, Smith decided to finally acknowledge the departure of The King.

Via Instagram:

Thanks bro @kingjames

A post shared by JR Smith (@teamswish) on

NBA players were not shy about sending out their reaction to James heading to the Lakers on social media the day it happened. No doubt actual teammates of LeBron would need to take some time to process it, but even guys like Cedi Osman were more punctual with their well wishes.

Some people bring out the worst in you, others bring out the best. And there are remarkably rare ones, who just bring out the most of everything that even you don't know that you have. They build you up. They make you feel alive. They make you feel strong. They make you feel indisputable. From the first moment we met, you’ve always been that rare one for me, King. I don’t believe in coincidences. I choose to believe my path crossed with you for a reason. And that reason will be uncovered as I continue to walk through. Please accept my highest gratitude for your support and appreciation for your inspiration. I’m truly blessed to have been surrounded by your charm. Bazı insanlar doğanızdaki kötü tarafları ortaya çıkarır; bazıları ise içinizdeki iyiyi katlayarak yansıtmanızı sağlar. Ama bazı özel insanlar vardır ki, onların sayısı çok azdır, sahip olduğunuzun farkında bile olmadığınız yönlerinizi parlatmanızı sağlar. Sizi geliştirir, yaşadığınızı hissettirir ve güçlü olduğunuzu hatırlatır. Kral, ilk buluşmamızdan itibaren benim için eşsiz biri oldun. Biliyorum ve inaniyorum ki seninle yolumuz özel bir nedenle kesişti. Bu özel neden, hayatım boyunca benimle olmaya devam edecek. Verdiğin tüm destek için sana kalpten teşekkür ediyorum. Seninle geçirdiğim her dakika için minnetarım. Yolun açık olsun…

A post shared by Cedi Osman (@cediosman) on

Los Angeles and Cleveland will be interesting teams to watch next year, and largely for the same reason. Each might end up being a complete tire fire, although they will attack things from different ends of the spectrum. How Smith operates in that void for the Cavaliers will be interesting to watch.

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DMV in Cleveland tapes a photo of LeBron to their camera to stop people smiling

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A trip to the DMV is never at the top of anyone’s list of ways to spend an afternoon. Still, it’s a necessary evil of adult life.

The DMV is a place for rules, one of the most common ones is that you are not allowed to smile in your picture for your driver’s license. In Cleveland, the DMV there has decided to make a small alteration to their camera setup to ensure that citizens follow this rule.

Specifically, they taped a photo of LeBron James in a Los Angeles Lakers jersey to the camera that takes the driver’s license photos.

Via Twitter:

At least for this year, putting a photo of LeBron on a camera at the DMV in the Cleveland should keep straight faces on people getting their photo taken. However, seeing as the Cavaliers probably won’t be very good moving forward, it might be just as easy to tape a photo of the team logo up there.

It appears that everyone is upset about Lebron leaving for the LA.

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DeMar DeRozan with classy goodbye to Toronto fans

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DeMar DeRozan did not want to be traded from the Raptors.

He will eventually warm to San Antonio and the Spurs, but for a franchise that has seen star after star push their way out of town — Chris Bosh, Vince Carter, Damon Stoudamire, and on down the list — DeRozan was the one guy who embraced the city, repped it, and not only said he wanted to stay but did just that. DeRozan was all in on Toronto and loyal, and they shipped him out anyway. It may well have been the right basketball move, but it was cold. And a lot of Raptors fans were not happy about how it went down.

DeRozan, classy as always, thanked the Raptors fans in a heartfelt Instagram post.

Someday they will retire DeRozan’s jersey in Toronto. Deservedly so.