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.

Heat camp arrives, and Goran Dragic says he’s more than ready

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MIAMI (AP) — This time last year, Miami’s Goran Dragic was already tired and the season was just getting started.

It’s very different now.

When the Heat hold their first practice of the season Tuesday, Dragic expects to be as rested and ready as he’s been for any training camp in years. The point guard who went to his first All-Star Game last season wore down as the year went along, in part because of the grind he put himself through last summer while leading his native Slovenia to the European championship.

This summer, he played less – and is hoping that pays off this season.

“I feel amazing. I feel great,” Dragic said. “I think one of the smartest moves I made was retiring from the national team, because I feel energized and pumped for this season. I always kind of hit a wall toward the end of a season, but I feel like this season is going to be a totally different story.”

At 32, Dragic is Miami’s third-oldest player – among those in the Heat locker room, only Udonis Haslem (38) and the entering-his-final-season Dwyane Wade (36) have seen more birthdays. But Dragic is still a starter, still a very intregal part of everything Miami envisions for this season, and is coming off a year where he averaged 17.3 points.

“The band is still together,” Dragic said. “I’m very happy that I’ll be part of this last dance with Dwyane.”

The biggest malady Dragic was dealing with at the end of last season was tendinitis in his right knee, something that bothered him for several weeks. He still led Miami in scoring during its five-game playoff appearance against Philadelphia, averaging 18.6 points.

He wasn’t the only Heat starter ailing when last season ended. Josh Richardson was playing through a bad shoulder, Hassan Whiteside had knee problems, James Johnson had a sports hernia and Tyler Johnson‘s thumb needed surgery. The Heat – who are one of the many teams that have been talking to Minnesota about a trade for Jimmy Butler – are hoping some health luck comes their way this season.

“I think we’re going to be good,” Dragic said.

If nothing else, he’s not coming into this season as harried as he was last fall. Dragic has been back in Miami for about a month, after spending most of his offseason in Slovenia. A year ago, the European championships meant Dragic was still playing right up until the start of Heat camp.

It wasn’t a popular decision in Slovenia for Dragic to stop playing for the national team, which didn’t qualify for the 2019 FIBA World Cup of Basketball in China and now faces an uphill climb if it’s going to reach the 2020 Tokyo Olympics.

“But it was the right decision for me,” Dragic said.

The Heat sat out this past June’s NBA Draft in part because of the deal they made in 2015 to bring Dragic to Miami. The package sent to Phoenix included two first-round selections, the first of which was used this year at the No. 16 overall spot. The other will be used in 2021.

The price was steep, and the Heat aren’t complaining.

“I’d much rather have Goran Dragic than those two picks,” Heat President Pat Riley said.

Dragic is hoping to give Riley even more bang for his buck this season.

The All-Star nod – even though it came as an injury replacement – was particularly meaningful for Dragic, and he felt that last season was one of his better seasons anyway.

His goal for this season is simple: Be even better.

“I want to be at a high level for as long as possible,” Dragic said. “If you come into a season without goals, you’re just going through practice and it doesn’t mean anything to you. But if you set goals, you’re pushing yourself. And for me personally, my goal is to have a better season than I did last year. I don’t want to drop a little bit at the end this season. I want to be energized, fresher, more consistent the whole way this time.”

Dwight Howard challenges Shaq on Instagram, Shaq roasts him

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Shaquille O’Neal is still not Dwight Howard‘s biggest fan. And Shaq still loves the tired “ringzzzz” argument.

It all started because Shaq was watching a couple of guys roast Howard on MTV’s Wild N’ Out. Shaq liked it so much he decided to post it to Instagram.

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Dam lol

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Howard took the bait and responded in the comments. He should have known better.

Let’s be clear: Dwight is a future Hall of Famer. No question. The Orlando version of Howard was an MVP-level player who was a three-time Defensive Player of the Year, eight time All-NBA and All-Star, who was a beast on the boards and averaged 17.4 points and 12.7 rebounds a game for his career.

And yet Shaq’s right, Howard’s not on his level. Not close.

As Sunday winds down, Miami heats up talk of Jimmy Butler trade

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There has been much speculation over the past 48 hours about where disgruntled Minnesota Timberwolves star Jimmy Butler will end up once owner Glen Taylor finds a suitable trade partner for him. We have already discussed at length where Butler might fit best, and Sunday morning saw an influx of new teams ready to come to the Timberwolves with an offer now that it is known that Butler is on the table.

As Sunday came to a close, it became apparent that yet another team is trying to work their way into the Butler sweepstakes.

According to multiple reports, the Miami Heat have been active and are trying to get a deal done for Butler. Once thought of as a middle-of-the-pack suitor, the Heat have apparently been one of the more engaged teams as a deal for the Timberwolves guard is sought before the team opens training camp on Tuesday.

Via Twitter:

Miami joins the Washington Wizards, Portland Trail Blazers, Brooklyn Nets, Detroit Pistons, Milwaukee Bucks, Los Angeles Clippers, Houston Rockets, Philadelphia 76ers, and Cleveland Cavaliers in teams looking to exchange parts for the next season on Butler’s contract.

No doubt league GMs are trying to weigh the risk vs. reward when it comes to Butler. His contract has a player option for the 2019-20 NBA season, which he will almost certainly opt out of in order to become a free agent. That means that without a guarantee that Butler will re-sign, any team trading for him will need to be careful with what young assets they leverage for the present.

For example, one report out of Portland says that the Blazers are unwilling to give up who they see as their young main core for a one-year rental on Butler. Damian Lillard, CJ McCollum, and Jusuf Nurkic are all off the table for the Blazers.

We still don’t know what the asking price for Butler will eventually be, or how the Timberwolves prioritize getting a solid return for him vs. shipping him outside of the Western Conference. For now, we have to wait and see what happens.

At least until Tuesday.

Elton Brand on 76ers contending for a championship: ‘I think we still need a piece’

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Elton Brand last played in the NBA in April of 2016. Now, in September of 2018 he is the general manager of the Philadelphia 76ers.

The 17-year NBA veteran helms one of the best young teams in the NBA, and takes over a GM position that has previously been under turmoil. Brand has perhaps been blessed with the departure of LeBron James from the Eastern Conference, but so too will other teams try to take over that perennial top spot.

The Boston Celtics have similar assets to Philadelphia, with proven stars mixed with an excellent supporting cast and young players who could develop into stars themselves. The Toronto Raptors are a very good team who just added a Finals MVP in Kawhi Leonard. The road ahead will be tough.

But the Sixers still have cap space and they are still looking for a third star to fill a necessary role on their team. Brand said as much during a recent appearance on ESPN, and from all indications it looks like he’s not going to be shy about pulling the trigger either in free agency or in the trade market if he feels he can solidify the Sixers’ position in the east.

Via ESPN:

Everyone talks about free agency, but we may have to pull the trigger on something else before free agency. If we feel we can’t get one of those stars that I can’t name. I still think we need a piece. We’re close. If you ask Joel [Embiid] we have enough and if you ask Ben [Simmons] we have enough, because that’s the chip they have on their shoulder … they don’t want to hear that, but I think we still need a piece.

Brand went on to say that he felt like development was also important in this process, and that it’s possible that Philadelphia has their additional star in Markelle Fultz, Dario Saric, or both.

Philadelphia has reportedly been one of the teams that has jumped into initial conversations with the Minnesota Timberwolves about trading for Jimmy Butler. Whether or not Butler is the right move for the Sixers notwithstanding, that Brand appear is ready to wheel and deal certainly is interesting.