Mar 9, 2013, 9:00 PM EDT
We’ve discussed the issues that will determine whether or not the Sacramento Kings stay in California’s capitol or go to Seattle, including the impact of public subsidy support in both cities, the race between the two cities for an arena deal, and what lawsuits pending in Seattle mean to the process.
Next we take a look at markets, attendance, and ownership groups for both locations.
Sources with knowledge of the league’s thinking tell PBT that neither city will have a discernible advantage in these areas heading into meetings with the Board of Governors joint committees on April 3.
Seattle enjoys the nation’s No. 12 television market but shares that market with up to six sports teams, an issue that has come under great scrutiny when comparing Seattle with Sacramento, something the Sacramento side brings up often. David Stern pointed the issue out at All Star weekend, Chris Hansen’s group reported the same idea in its market analysis, and Sacramento’s group highlighted the same thing this past week when they unveiled their market analysis to the press.
A potential Sonics franchise would share Seattle’s larger market with the Mariners, Seahawks, Sounders, and University of Washington football, in addition to an NHL team if Hansen’s group can make it happen.
That would reportedly position Seattle closer to Sacramento’s No. 20 television market, where the NBA enjoys 100 percent market share.
Think Big Sacramento, the city’s arena task force, put out a report this week contending that they are a better market than Seattle, which is what they’re supposed to say, but when you look at a similar report put out by Chris Hansen’s group the two sides aren’t necessarily squabbling over the details.
Hansen’s report indicates that Sacramento has 1.4 million TV homes per team (NBA, NFL, NBA, NHL), compared to 937,000 TV Homes for Seattle under the current scenario of two sports teams (Mariners and Seahawks) already in town.
Under this metric, Sacramento ranks No. 2 and Seattle ranks No. 4. Orlando is ranked No. 1, L.A. is ranked No. 3, New York is No. 5, and from there it goes Atlanta, Philadelphia, Houston, Chicago and Dallas — mostly large markets.
Should Seattle secure both an NBA and NHL team they will fall to No. 15 on Hansen’s report. If you add the successful Seattle Sounders MLS franchise to the metrics as Hansen’s group does, then Seattle falls to No. 21 assuming they land two new pro sports franchises.
League sources say the TV Homes per team metric is one of the reasons small-to-mid markets like Orlando, Sacramento, and Seattle are coveted by the league. Networks understand the competitive impact of multiple sports teams in a region that steal away eyeballs and ratings, and they include such analysis in their bids for rights packages and the like.
Otherwise, leagues would contend that ‘TV Homes’ never watched any of the other sporting options available to them, and instead just the games that a particular league is selling to a network.
Still, Hansen’s report states that Seattle (84) has 30 more businesses than Sacramento (54) with 1,000 or more employees, and Seattle’s household median income is ranked No. 6 ($66,500) compared to Sacramento at No. 8 ($63,618). However, if you use the 2011 federal numbers for the counties of these cities (King County and Sacramento County, and work to draw fans outside the city limits) that gap grows to more than $15,000 a household.
Just like other professional teams cut into the NBA’s TV viewership in Seattle, sources say the same issue mitigates the advantage the Emerald City has in terms of potential sponsors. The issue was summed up by longtime Seattle writer Art Thiel, as he said in a recent roundtable discussion between local pro- and anti-arena groups that competition for sponsorships in Seattle could be a problem.
“Which team in Seattle is the sixth ticket in town? When you consider Seahawks, Mariners, Sounders, University of Washington sports and then these two new teams that might occupy Hansen’s arena … the complicated business problem in Seattle is that our major companies here like Amazon and Microsoft are either bit or ‘no’ players in the sports sponsorship scene. They don’t buy the suites, they don’t do the sponsorships at least at the same degree as you find elsewhere with Fortune 500 companies.”
At his State of the City address last week, Sacramento Mayor Kevin Johnson revealed that he had sponsorship commitments of $50 million over five years from local businesses, which is similar to the $10 million Johnson secured when the Maloofs tried to leave for Anaheim in 2011.
It is unclear what Seattle has presented to the league on that front, as Seattle supporters have maintained that Hansen is under a gag order and cannot talk about his proposal to the press.
As for Hansen’s arena task force marketing itself or leaking information to the media about sponsorship support in Seattle, league sources do not expect the group to be public about their position. As they put it, “when you’re trying to take a team from another city, particularly one that is fighting as hard as Sacramento is, it pays to be quiet.”
Past attendance will likely be a moot point or favor Sacramento, as Kings fans have turned out at the gate more frequently than their Sonics counterparts over the years.
Given the constant relocation threats and substandard ownership over the past five years, sources say the league is impressed that Kings fans continue to show up the way that they did, just as the league was impressed with Sonics fans when they showed up for the last two years under Clay Bennett prior to the team’s move to Oklahoma City.
Sources say the league won’t be overly critical of attendance in either city once public relations became a nightmare. This was the case starting in 2006 in Sacramento after the Maloofs torched an arena deal and in that same year when Bennett took over ownership of the Sonics.
Ownership groups are another area in which sources tell PBT that the league is likely to conduct itself with some ambivalence.
Steve Ballmer is ranked No. 51 on Forbes’ top billionaires list, while Chris Hansen, Ron Burkle, and Mark Mastrov are not listed. Each ownership group is “overly qualified” to own an NBA franchise, and the sports connections each group brings to the table are regarded as second-to-none. Burkle is a finalist to purchase sports and entertainment powerhouse AEG, while Ballmer’s wealth alone is enough to make most owners blush.
Sources with knowledge of the league’s thinking said this is a great problem for the NBA to have, but pointed out that the league is highly unlikely to make this a question about which ownership group is better, instead letting the other factors decide the matter. “There are only so many yachts these guys can water ski behind, and while Hansen and Ballmer are a dream team when it comes to ownership, it’s doubtful the NBA is going to downgrade Burkle and Mastrov.”
The source added that it didn’t make sense for the league to pit the ownership groups against one another, noting the association still wants to do business with both well into the future.
After David Stern’s press conference on Friday in which he said the Sacramento offer needed to be increased, and subsequent votes of confidence from Mastrov and Johnson that they would be able to deliver, the framework for discussion among owners is all but laid out.
Assuming Sacramento can provide the right offer, with the two cities drawing toward a tie on the issues of markets, attendance and ownership groups, the source said that with the advantage Sacramento has on the public subsidy issue, “Tie should go to the runner.”
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