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.

Rockets wear jersey patch to honor Santa Fe High School vs. Warriors

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The Houston Rockets have been supportive of the Texas community after a gunman killed 10 people and injured 10 others at Santa Fe High School in Santa Fe, Texas.

Rockets point guard Chris Paul called NBA basketball “minor” compared to what those in Santa Fe are having to endure, and on Thursday the team took things a step further and donned special jerseys for their playoff matchup against the Golden State Warriors.

As Houston prepared to take on the reigning champs in Game 5 back in Texas, the team tweeted out a photo of the jerseys — complete with a special patch on the left shoulder — to honor the victims of the shooting.

Via Twitter:

The NBA has a lot of advocates for social and political change, not just individually but organizationally. How the Rockets responded is good to see in the face of yet another school shooting.

Andre Iguodala out for Warriors again in Game 5; Klay Thompson available

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The Warriors missed Andre Iguodala in Game 4 against Houston. They don’t have a Death/Hamptons 5 lineup without him. Without his depth, the Warriors had to lean more on players such as Kevon Looney (who started), Nick Young, and others who are can be a liability at the high level of play in this series. Not having Iguodala to keep minutes down, play fierce defense, move the ball on offense, and be a stabilizing force was one of the issues that led to the Warriors fourth-quarter issues in Game 4.

Now they are without him for Game 5, too.

Having Klay Thompson on the court is huge for Golden State, although it will be worth monitoring to see how he moves.

The Warriors have gotten sucked into the switching/isolation game the Rockets want to play, if they are going to take Game 5 on the road they need to get back to “the beautiful game” they want to play. That would have been easier with Iguodala.

Two years after NBA retirement, Amar’e Stoudemire talking comeback

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NBA teams seemed to have moved on from Amar’e Stoudemire. After an impressive NBA career — five-time All-NBA, Rookie of the Year, six-time All-Star — he wasn’t physically the explosive player that dazzled with the Suns. Teams were interested in getting younger and more athletic, and Stoudemire was doing neither. He retired from the NBA and played for a season in Israel where he won a league title. This summer he’s signed up to play with the Big3.

After that he’,d like another crack at the NBA. When asked about an NBA comeback, here’s what Stoudemire told CBS Sports’ Bill Reiter on ‘Reiter’s Block’:

“I am. I am. I’m definitely planning on (coming back). I’ve been training like you wouldn’t believe, my body feels great. I had an amazing year last year playing overseas and so I’m gonna definitely continue to work my way back to top shape and see if there’s a team that needs my talents.”

I’m not sure there’s going to be much demand. Maybe a team does an old friend a favor and brings him in for some workouts. However, his knees and body struggled with the physical grind of the NBA the final few seasons of his career, and it’s unlikely with age that got better. No doubt he’s worked on his conditioning and strength, but Father Time always wins the race and it already felt like this chase was over.

That said, good on Stoudemire for not giving up on the dream. His agent should be making calls, maybe he can become the second player to make the Big3 to NBA leap.

 

 

Kristaps Porzingis after conversation with David Fizdale: ‘Man im excited!’

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David Fizdale learned a lot of lessons in his first go around as a head coach, spending 101 games with the Memphis Grizzlies. At the top of the list: Build a strong bond with your star player. Or else.

Fizdale is trying to do that, saying he would fly to Latvia this summer to spend time with Kristaps Porzingis. But first came a phone call, and that seemed to go very well.

It’s not just Porzingis. Fizdale was bonding with Frank Ntilikina, Emmanuel Mudiay, and Damyean Dotson on Wednesday night in Boston. A little “this is where we want to be” motivation.

Good on Fizdale for all of this.

The Knicks got the best coach for them on the board in Fizdale, and so far the new front office — general manager Scott Perry and president Steve Mills — are making smart decisions. Knicks fans should be optimistic. Knicks ownership just needs to be patient (not James Dolan’s strong suit), because with no Porzingis for a large portion if not all of next season the team will struggle. Wins will be hard to come by. Fizdale needs a season to develop players and lay the foundation for what he wants to build, while the new front office needs time to clean up the salary cap mess that is New York right now.

With some patience, the Knicks could have something special in a few years. And Fizdale may have found the right home for his talents because he’s already got players buying in.