|The Maloofs have sold majority ownership of the Kings to Seattle group. (Getty Images)|
News of the Maloof family trying to sell the Sacramento Kings to a Seattle-based ownership group has been been circulating and being vetted for a couple of weeks now. And after the city of Sacramento began rounding up investors to try to save NBA basketball in their city, the Maloofs have reportedly decided to sell to the Hansen-led group in Seattle:
Just going online now: Maloofs have struck deal to sell 65 percent of Kings to Chris Hansen group in Seattle for $525 million, sources say— Marc Stein (@ESPNSteinLine) January 21, 2013
Kings deal to Seattle group still requires formal NBA ratification but Hansen group intends to file forrelocation by March 1 if approved— Marc Stein (@ESPNSteinLine) January 21, 2013
While the city of Sacramento isn't completely out of this fight just yet, this news makes it look extremely bleak that the Kings will stay in California.
So what's next? The deal will be announced, the NBA Board of Governors will need to approve the sale, 65 percent of the team will belong to Seattle, and the new owners will file for relocation by March 1. Meanwhile, the city of Sacramento will still try to bring money and investors in to have a clear plan of attack to keep the team in Sacramento. They will eventually present their case to the NBA Board of Governors and we'll see just how much the NBA wants to keep a team in Sacramento or give a team back to Seattle.
Since reports of the Kings' move to Seattle have hit the net from very reputable sources, Sacramento has been firing on all cylinders in what has been a long-term initiative to respond in the event the Maloof family was willing to sell the team. Indeed, sources close to the situation in the California capitol have told PBT that preparing for this contingency has been a prime focus of the city, and that when it comes time to present Sacramento's offer to the Board of Governors that they believe it will be a compelling and competitive offer.
It will be up to the Board of Governors — made up of the 29 other NBA owners — to make that determination.
We calculated that an offer from Sacramento of $425-450 million for the overall price of the Kings franchise would put more money in the Maloofs' pockets than the reported $525 million offer from Hansen, because a Sacramento owner would not need to worry about the Maloofs' outstanding loan to Sacramento (~$75 million). The city also doesn't have to worry about the league's relocation fee, which was $30 million when the Sonics moved to Oklahoma City and became the Thunder, although the Board of Governors can set that fee at whatever level they wish. USA Today's Sam Amick confirmed Sacramento's target offer in his exclusive interview with Sacramento Mayor Kevin Johnson last week.
The Maloofs are getting their money no matter what, but how much money?
The $525 million price is a "valuation" on the total franchise. For 65 percent, Seattle group would pay approximately $340 million.— Adrian Wojnarowski (@WojYahooNBA) January 21, 2013
This information from Woj explains a bit more of what Bruski is talking about in that last paragraph from the excerpt. The Maloofs will be getting roughly $340 million because of their sale of 65 percent at $525 million. The Maloofs still owe the city of Sacramento about $75 million and they reportedly owe the NBA "well over $100 million."
The sum of around $340 million would more than cover that and leave them plenty of money to use for future investments and business deals. However, the city of Sacramento and new potential local ownership groups could trounce that number and turn this into a potential bidding war, depending on how the NBA wants to handle their allowance of the city of Sacramento to present their case. If the sale is pushed through and approved by the NBA, then it's unclear how Sacramento would still have punches left to throw.
Now the fight between two cities officially begins for the opportunity to rebuild the Kings into what was once a fun and successful franchise. Whether that happens in Northern California or the Pacific Northwest will be determined some time in April when everything gets sorted out.
Both cities will still be at the mercy of the NBA, as they've often been over the years.