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History of public subsidy support could be key issue in Sacramento Kings’ future

Feb 20, 2013, 3:11 PM EDT

kj stern hugging

It’s no secret that public funds for arenas make the NBA world go round.

Seattle lost their Sonics because politicians did not want to play ball, right or wrong, and to top matters off they openly admonished David Stern and the NBA during the critical days and months that determined the Sonics’ fate.

The past behavior of Seattle politicians is not expected to be a defining factor in the league’s assessment of the two cities’ competing proposals.  However, an exchange between Stern and a Seattle reporter didn’t do much to quell any doubts.

When asked about whether or not he regretted the way the NBA left five years ago and if it would impact the league’s decision-making, Stern interrupted the reporter with visible irritation:

“Actually, no, it does not impact anything. This is being done by the book. I seem to remember, and correct me if I’m wrong, but there was $300 million-plus subsidy for the Mariners and $300 million-plus subsidy for the Seahawks. But there was legislation that precluded that for the Sonics. Speaker (of the House of Representatives Frank) Chopp said we should take the money from our players. Is there anything that I’m missing there? History is being rewritten in a way that your question gives me an opportunity to set the record straight.”

This strikes a stark contrast with the way Sacramento has worked with the NBA to secure public funds for an arena.  There is no doubt about the effort they made to get an arena deal done in 2011, working side by side with Stern and relocation committee head Clay Bennett to bring together $255 million in public funds for what league sources called a “model offer.”

When asked about Sacramento’s ability to extend their current offer of public funds from the last deal negotiated by the NBA, sources say Kevin Johnson’s strong support in the Sacramento city council last year is likely to continue this year.  The Sacramento City Council passed a 7-2 vote in favor of a symbolic resolution supporting the NBA on Tuesday.

Seattle and King County have also offered up to $120-145 million toward the creation of an NBA-only facility.

Stern has been careful to applaud Sacramento’s efforts in the public numerous times, most recently reminding reporters in Minnesota, “The mayor of Sacramento has advised that he will be back to us soon with a proposal from a group to buy the team in Sacramento and build a building in Sacramento with a substantial subsidy from the city of Sacramento.”

The league and its players have enjoyed over $3 billion in public funds for new arenas since 1990 and sources tell PBT on the condition of anonymity that the league is sensitive to what a move out of Sacramento could do to future subsidy collection efforts by the NBA.

Any additional ammunition given to public subsidy opponents could impact the league’s bottom line much more than what owners would proportionately receive in a relocation fee, which some have guessed to be in the $30-45 million dollar range.  The fee can be anything the league wants, and can be as high as the most recent franchise fee or franchise sale amount according to legal scholars at Loyola Marymount.

Sources tell PBT that a prohibitive relocation fee would only be sought by the league if it wanted to exert financial pressure against the Seattle deal, and that there has been zero talk of doing that at this time.

Should Sacramento produce the ‘fair and competitive offer’ sources expect before March 1, the league will be facing an unprecedented decision.  Never before has an NBA city shown strong support for a team, provided a “model offer” of public funds for a new arena and then lost their team.

With opposition of public subsidies for sports facilities growing every day, sources say the league wants to avoid a situation in which Sacramento provides a “model offer” only to have their team taken away.  This would send a message to future cities that their long-term investments in the NBA are not safe, even if the city does everything reasonably expected of them.

So even though the league probably won’t hold Seattle’s history against them, the fact that Sacramento has done everything that could ever be expected of them will be a point in their favor.

  1. yuckabuck - Feb 20, 2013 at 3:23 PM

    Link or attribution for David Stearn’s quote?

    • brianspider - Feb 20, 2013 at 6:46 PM

      Its directly from Stern’s “State of the League” pressor Saturday night over All Star Weekend. Was on NBAtv

  2. matttucker76 - Feb 20, 2013 at 4:08 PM

    Once again, it needs to be pointed out that Stern’s comments on the history in Seattle are without the appropriate context. The city gave a $75m subsidy to renovate KeyArena just 10 years prior, a renovation that was signed off on not only by the league but by Stern in person. After the Mariners and Seahawks got their public funds, the league suddenly declared that the Key was unfit and needed a major retrofit. That’s what caused the backlash that led to the creation and passing of Initiative 91. (It should also be noted that I-91 does allow public funds to be used to build or renovate a sporting facility but must guarantee a positive ROI.) Stern wants to rewrite history on his own.

    If anything, the Hansen group proposal for the arena is a stellar model for a public-private partnership that the NBA should embrace. It’s something favorable to both sides of the investment and would likely take a lot of the initial sting out of asking cities to pony up for new buildings.

  3. mazblast - Feb 20, 2013 at 4:25 PM

    The team will wind up where Stern wants it, and he’ll have the rationalization to back up his decision. Anyone else is window dressing.

  4. badintent - Feb 20, 2013 at 7:03 PM

    Ster getting touchy in his old age. Yeah Dave , Seattle was tapped out after spending $ 600 miilion on areas. So your league was at the back of the hand out line.The Kingdome roof panels were falling down, the 2006 earthquake would have killed thousands if a game was played at the time of the quake. Paul Allen made a decent deal to pay about half of the bill for the new digs. The NBA and Shultz were penny smart , pound foolish.And corrupt. So Herr Stern still wins the Spin Doctor of the Year Award. If he hadn’t been with the NBA , he would have been a credit swaps manager on Wall Street.”No risk here, toxic trenches, never heard of them “

  5. genericcommenter - Feb 20, 2013 at 7:51 PM

    Billionaires are the true “Welfare Queens.” And when they don’t get the welfare they want from one government, they find a desperate one that will.

  6. Robert - Feb 20, 2013 at 10:35 PM

    Pathetic. Fighting for the Sacramento “Tampa Bay Ray” Kings. 600 million for a team that will never win anything but a “Whipping Boy” trophy.

    Sacramento has the A’s minor league club the River Cats. It is followed heavily. The Oakland A’s are looking for a new home.

    Sacramento would make more money with a baseball team. JThe A’s actually have won some titles and are actually always good.

    Let this deplorable franchise go to Seattle, and work on luring the A’s to Sacramento.

  7. dans761 - Feb 21, 2013 at 11:15 PM

    This article was written by a SACRAMENTO based reporter so his interpretation on what really happened and his perceived views on what he thinks the NBA is thinking is biased.

  8. hsekl - Mar 2, 2013 at 6:44 PM

    Do you think Sacramento’s lawmakers would pony up enough taxpayers money to build three arenas/stadiums like Seattle had to do for the M’s, Seahawks, and now for the soon to be back Sonics? They are going broke just trying to get enough money to build one! Onward to Seattle!

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