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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.

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