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Bruski: Sacramento lines up offers in effort to keep Kings

Jan 13, 2013, 10:02 AM EDT

Los Angeles Lakers v Sacramento Kings Getty Images

It has been a whirlwind of a week for Kings fans and the Sacramento Kings relocation story in general.

We reported first in this saga that ‘Kings to Seattle’ was not a done deal, as sources close to negotiations told us there were many hurdles for the deal to clear, and that Sacramento had multiple, qualified buyers that could either meet or beat Chris Hansen’s offer.

This has played out over the last 24 hours as multiple buyer groups have stepped up in Sacramento to buy the Kings, including a group that is connected to Ron Burkle.

In terms of the math and money, as we reported in September the reason Sacramento has a shot against top-tier owner prospects such as Seattle’s Hansen and billionaire deluxe Steve Ballmer is that they don’t have to pay as much for the team.

Anybody moving the team will have to account for at least $100 million in unpaid loans to Sacramento (~$75 million) and relocation fees (~$30 million), and this is a very low estimate. That number increases as you account for moving costs, and the fact that the relocation fee could be more than $30 million. We’re reporting that this number could go as high as $300 million if the league really wants to flex its muscles in getting what it wants.

Our report Thursday estimated a $425-450 million price tag for Sacramento to hit in order to start outperforming Seattle’s offer. Sam Amick of USA Today was able to confirm with Sacramento mayor Kevin Johnson at his charity event that this was indeed the city’s initial target, and also that the mayor would be approaching David Stern to speak at the NBA’s Board of Governors meeting.

In a moment of levity at that charity event, attendee LeBron James was asked by Johnson if he could buy the Kings and keep them in Sacramento and he responded with, “get me my check book.

LeBron isn’t going to have to reach far because Sacramento buyers have been making themselves known over the past 24 hours. Mark Mastrov, former CEO of 24 Hour Fitness and San Francisco investment firm JMA Ventures have thrown their hats in the ring.

JMA Ventures is proposing to buy the team and build a $400 million downtown arena where a downtown mall they recently purchased currently sits. CBS 13’s Steve Large reports that group includes Darius Anderson, who is the same man that connected mayor Johnson to Ron Burkle.

According to sources there are more interested buyers being filtered through the process, too. The Sacramento market is all-but rubber stamped with $200 million or more of public investment toward a new arena and has an extreme level of fan support. Being the No. 20 television market doesn’t hurt, but having no other sports teams to compete with is what puts it in the same category as a larger market like Seattle, which has the Seahawks, Mariners, and Sounders to steal entertainment dollars.

In Sacramento, all they have is the Kings.

Assuming Hansen and his group don’t want to start acting like the drunk guy at an auction, then the NBA is going to be choosing between two similar offers. The owners in Sacramento might not be Ballmer-rich, but Burkle was good enough to drop David Stern’s jaw and Mastrov finished second to Joe Lacob’s group in Golden State, ahead of Larry Ellison.

The NBA isn’t picking between steak and chopped liver, here.

But if for some reason they don’t let California’s capitol city have a shot here, and they allow the team to be moved to Seattle, then the NBA will be the ones left holding the Sacramento’s beating heart after the Maloofs rip it out of their convulsing chest.

Charles Barkley said it best on TNT:

“I’ve always like the Maloof brothers, but they’ve screwed this thing up royally. All these teams try to screw these cities, that’s what the deal is. I don’t think it’s right for all poor people to build these cities all these major stadiums year after year after year. Every ‘x’ amount of years, they screw the fans and the taxpayers and make them build them bigger stadiums and bigger stadiums and bigger stadiums. I think these owners are worth so much money … does a city benefit? Of course a city benefits. But this thing in all sports been screwing these fans for the last 30 years, moving from city to city. Because those people in Sacramento, those were some of the best fans in the world. They screwed Seattle because they wouldn’t give them a new arena, and those fans in Seattle were amazing. But this is all about the owners just being greedy and screwing these fans.”

We’ve reported the NBA’s billion dollar subsidy issue here for nearly two years now, as the league and its players have received over $3 billion in public funds for arenas since 1990.

This happens because the league and its owners pit cities against one another with threats of relocation if a city doesn’t pay up for an arena, but in the case of Sacramento they did everything they could and then some according to multiple league sources.

One league source with intimate knowledge of the situation called it “a model offer of public funds.”

The league is walking dangerously close to the line in which people get fed up and they start to lose those subsidies they love dearly. In Seattle, yes their own politicians screwed up and were culpable in the matter, but the league’s underhandedness and heartlessness was brought to life in the documentary Sonicsgate. It’s not pretty.

But unlike that story that was told after the fact, the saga in Sacramento is playing out in real-time. The NBA media is getting constant updates on their Twitter feed about the incompetent, despicable Maloof family and how they’re leaving the house in worse condition than they found it.

This twisted tale is filtering all the way down to the fans, and when Charles Barkley talks about the deplorable business tactics of the NBA on TNT the cat is out of the bag.

This isn’t just league insider talk anymore, it’s coffee talk.

If the Kings leave Sacramento, it will transcend sport. The story of Sacramento Kings fans, arena workers, and the like will make the morning talk show rounds, ultimately culminating in a national discussion about the role of public money in professional sports.

Seattle — a victim of the system – is excited that their Sonics might be coming home, but the mere exercise of having to replace the team that was stolen from them is a trying experience.

And even if they can secure an NBA team, some Sonics fans are having trouble with their own moral relativism.

For years they’ve railed on the NBA for stealing their team and now they’re trying to steal Sacramento’s team. They’re slowly understanding what it means to have that blood on their hands, and many Seattleites are already speaking out saying the juice isn’t worth the squeeze – especially when they know they stand a very good chance of getting a team down the road under more moral circumstances.

Unlike the Oklahoma City fans that can point at Seattle’s politicians and argue that they slept on the job – Seattle fans have no such target.  Kevin Johnson has moved mountains to keep this team while the Maloof family can’t get out of their own way.

Besides wanting to move the team since they purchased it and ruining every arena deal the city tried to create in good faith, the Maloofs sold profitable businesses to build a pipe dream casino a mile off the strip in Vegas and it led to their downfall.

Rather than atoning for their financial mistakes, the Maloofs have dragged the league through embarrassment after embarrassment through the years, all because they cannot afford to own an NBA team.

Every subsequent episode is their worst one and the shenanigans come with increasing frequency, as just Friday night a report surfaced that their Palms Casino was getting popped with a $1 million fine for a prostitution and cocaine ring (no word if the price of the Kings just went up).

This isn’t a case of Sacramento not deserving the team, or not having the wherewithal to keep the team, but rather a case of a Maloof family that makes Antoine Walker look like Warren Buffett.

Sacramento has been paying for this Maloofery for years, and nobody is comfortable with an indecent proposal leaving Kevin Johnson at the altar. Not Stern, not Seattle, and probably not Gavin and Joe Maloof — whose love of Sacramento has been trumped by brotherly grudges and family needs.

It’s against this twisted backdrop that sources close to the situation believe Sacramento has a chance, and some sources believe they are actually favored to keep their team. I happen to share that belief.

Once again it all comes back to the NBA. They can tell the Maloofs what to do here. If the offers between the cities are close, they can decline the move to Seattle and force the Maloofs to take them to court in an antitrust case if they don’t like it.  There, the league can show a laundry list of claims that show the Maloofs are putting the league’s subsidy industry at tremendous risk by selling to Hansen.

After all, what city or politician can sell their constituents on making a long-term investment in the NBA when Sacramento did everything a city could to protect their investment and got told to kick rocks.

Also in the NBA’s arsenal would be the aforementioned increased relocation fee up to $300 million, and if push comes to shove David Stern can remove the family from the league using the ‘best interest of the league’ clause.

Regardless of what some of their intermediaries might like you to think, the Maloofs aren’t going to wade too far into those waters.

With the family’s debt to the league upwards of $127 million and as high as $217 million by some reports, and their financial situation a total mess, they’re bringing a whoopee cushion to a gun fight if they want to go to court.  And if they do, they won’t have the law on their side unless Hansen can drastically overpay for the franchise, giving the Maloofs the argument that the league is costing them significant money by forcing them to sell to Sacramento.

Even then, the cash-strapped and beleaguered Maloofs would still have to win that battle in court.

Looking outside the courtroom and toward the league office, there has been a lot of talk about the wrongs that David Stern wants to ‘right’ in Seattle, and how he wants to remove that inscription from his tombstone.

You can’t cross out Seattle’s name and simply write in Sacramento’s and change your legacy.  We all learned in kindergarten that two wrongs don’t make a right.

But that’s not what’s really at stake here.

As usual it comes down to the money, and with all things equal in this case the threat of killing the public subsidy goose will be the tiebreaker.

With Kevin Johnson’s legitimate, comparable offer from more-than-reputable buyers in hand, the NBA will have to both look a gift horse in the mouth and sanction Sacramento’s open-heart surgery if they move the team to Seattle.

And if they do, it’s going to leave a mark. A $3 billion mark.

And unless you’re the Golden State Warriors that’s not good for business.

  1. Gordon - Jan 13, 2013 at 10:45 AM

    Great write-up. You wonder at what point communities will really get fed up with these public subsidies for billionaires. I guess there’s always a sucker out there to leverage against your current community, if you’re an owner.

  2. echech88 - Jan 13, 2013 at 11:15 AM

    The part of this write-up I don’t buy for 1 second: Assuming Hansen’s group won’t start acting like a drunk guy at an auction or that they’ll even have to to outbid Sacramento investors.

    Most people not paying attention to this story probably aren’t aware of the fact that this guy and his group have been spending YEARS and tons of time and money getting an arena approved by the city of Seattle. They are this close and you think they will bail over $25-$50M when no other team is going to be going on the market soon? I’ll have to see it to believe it because once this thing went public the Seattle group has insane pressure to make this happen now.

    Will be interesting but I still imagine Seattle will get the Kings at an overpay AKA exactly as the Maloofs planned.

  3. smcgaels1997 - Jan 13, 2013 at 11:30 AM

    Well written, it’s nice to see an objective column..not one hell bent on touting that Stern wants to right things in Seattle by wronging Sacramento. The Maloof’s ate morons continuing to preach the Sac market isn’t good….really you have buyers lining up against this so called “power ” group from Seattle

  4. buttfumbles - Jan 13, 2013 at 11:43 AM

    Seattle: Where two wrongs make a right.

  5. Mr Baker - Jan 13, 2013 at 11:58 AM

    Bruski, will the $75 million dollar loan magically vanish? Does it get forgiven by benevolent bond holders? Do the fine citizens of Sacramento eat that $75 million dollars and pay the loan off for the new local owner? Or, is your math f’d up? Do the new owners not have to pay that off right away but still carry that debt and have to pay off the loan, making that $75 million dollar discount a complete BS statement?

    It’s one of those things.
    Explain it.

  6. rdav29 - Jan 13, 2013 at 12:06 PM

    Expand NBA to 32 teams like NFL. Force Maloofs to sell to local buyers. Allow Seattle group to start expansion team. Gather up interest in another worthy city like St. Louis or Baltimore or San Diego who lost an NBA team and have arenas ready to also start an expansion team. Just lower the expansion fees so they’re profitable quickly. Creates jobs and everybody wins.

    • thefox61 - Jan 13, 2013 at 9:02 PM

      I agree. Being a longtime Sonics fan I would love to finally get a team, but, most certainly not at the expense of the Kings fans or the city of Sacramento. What we went through here in the state of Washington I would not want to wish that on any fan.
      Stern needs to force the Maloofs out and expand the league. Then and only then will he be able to wash some of the blood of his hands.
      Go Sacramento, do whatever it takes to keep your team and hopefully soon Seattle will be awarded a team and we can start beating the stuffing out of you guys once again.

  7. hawkblocked - Jan 13, 2013 at 4:59 PM

    Good article, but, the situation in Sacramento and Seattle is not the same. I do feel bad for the fans of the Kings, but if the Maloofs sell the team to Hansen and company they know that team will leave.

    Bennet bought the Sonics under false pretenses before anyone in Seattle knew the team was up for sale.

  8. Robert - Jan 13, 2013 at 6:01 PM

    The Kings are the most successful franchise in history. Most NBA championships and they have sold out every game since 1975. This Tampa Bay Devil Franchise should never be touched.

    • Robert - Jan 13, 2013 at 6:02 PM

      “Devil Ray”

  9. mazblast - Jan 13, 2013 at 7:13 PM

    Sacramento as a town is not simon-pure in this. They didn’t exactly say, “No, thank you, we don’t want to hurt Kansas City’s feelings” when the team was moved TO Sacramento. You help rip out another city’s heart when you accept their team, you shouldn’t piss and moan when the same happens to you years later.

    As for David Stern’s “assistance”, remember, he’s only lying when his lips move, and when you dine or meet with him, always sit with your back to the wall.

  10. susie95603 - Jan 13, 2013 at 10:40 PM

    Great Article, Finally someone writes the truth about the situation in Sacramento

  11. badintent - Jan 14, 2013 at 2:21 AM

    Really Patheitic when a casino gets busted on hooker and marching powder
    But given the Maloof family of parasites and SOBs(son of a business ), this should not come as a big surprise, probably had some famly or cronie as casino GM.
    Memo to Maloofs” Watch the movie “Casino”,know what is going on in your business, instead of money business.Chumps

  12. rollteal - Jan 14, 2013 at 2:56 AM

    Well rewritten article.
    Big Ive said if before the NBA needs to get the Kings out of the Maloofs hands and over to some local owners who would manage the franchise properly.
    Then offer NBA 32 to Seattle as the Sonics. If Charlotte can get a replacement team for the Hornets in 2 years then there is no reason the Sonics aren’t in Seattle.

  13. MyTeamsAllStink - Jan 14, 2013 at 11:16 AM

    Still convinced the Maloofs want to stick it Sacramento for what reason I don’t know.I can see the Maloofs refusing to sell to a local buyer and dealing exclusively with outside buyers wanting to move.Theyve done everything they can to alienate the fan base there as well as the city officials.

  14. jeffesky - Jan 14, 2013 at 11:28 AM

    As a Sonics die hard fan I can’t accept stealing the Kings. We have lost our teams in this city (NHL-Metropolitans,MLB-Pilots and the Sonics,almost lost the Seahawks in the late 1990’s) one to many times and its gut wrenching. The Kings are the only team Sac has ,lets not do this deal Chris. We love what you have done for us but we can wait a few years to do this in a moral way. I want to feel good about the Sonics coming back.

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