Sacramento or Seattle? Duel for Kings could drag on
After competing presentations from Sacramento and Seattle groups to a joint committee of NBA owners on Wednesday, the unprecedented duel for the Kings could, and probably will, drag on beyond its anticipated conclusion later this month.
NEW YORK -- An unprecedented duel between two cities vying for an existing NBA team could, and probably will, drag on beyond its anticipated conclusion later this month.
Negotiations, as we’ve learned all too well, never end on time in the NBA.
It’s not clear whether Sacramento won a stay of execution for the Kings Wednesday in New York, but the news that emerged from meetings before a joint committee of owners was the overwhelming possibility that determining the team’s fate -- Seattle or Sacramento -- will take more time than the league has allotted.
“Yes,” was the simple answer commissioner David Stern gave when asked if it was possible that a vote on the proposed sale and relocation of the Kings to Seattle could drag beyond the April 18-19 meeting of the full ownership board, a timeline that had been targeted for the conclusion of a three-year referendum on the Kings’ future.
“We have to plan for a season, so there's a combination of a timeline set out in the [NBA] Constitution for making a determination, and then there are also the factors as you point out … setting a schedule, selling a tickets for next season, sponsorships,” deputy commissioner Adam Silver said. “The owners are mindful of all of those factors.”
Though Stern said there’s “a combined interest in having some clarity come to this situation,” owners nonetheless were left with more questions than answers. They asked the league’s legal staff to get more information about the dueling proposals – including details on the respective deal points and arena financing plans and timelines – before proceeding with any votes. The joint committee of owners will meet a second time before the full Board of Governors convenes later this month.
“We’ve never had a situation like this,” Stern said. “… The seriousness of purpose, to me, is really incredible, because[the owners] know that there’s a lot at stake here for two communities and the NBA.”
The respective Seattle and Sacramento groups vying for the Kings made separate presentations to the eight of the 12 owners who were present: Peter Holt, Glen Taylor, Clay Bennett, James Dolan, Ted Leonsis, Larry Tanenbaum, Herb Simon and Wyc Grousbeck. Committee members not present were Micky Arison, Robert Sarver, Jeanie Buss and Greg Miller.
The only similarity was the presence of current Kings owner George Maloof, who sat in on a portion of each meeting. He told owners during the Seattle presentation that he wanted to “move forward” with the deal that has been agreed upon to sell the Kings to the group led by Chris Hansen and Steve Ballmer, who would move the team to Seattle. Maloof also was present for the Sacramento presentation.
“This is something that we all welcomed,” Sacramento Mayor Kevin Johnson. “We were pleased to share our story in front of them.”
If the tone of the news conferences was any indication of where this “weighty” issue (Stern’s word) is going, then Sacramento has a decided edge. Johnson entered the interview room applauding, and his presentation to the media was impassioned and upbeat.
Of course, the owners will not be deciding the future of the Kings based on who won the press conference. And with so many questions to be answered – chiefly, it seems, the lack of finality to arena construction schedules in both cities – there are no good alternatives if owners conclude that neither proposal is solid enough. If the team stayed in Sacramento next season, it would be forced to play in a sub-par arena. If it moved to Seattle, it would be forced to play in a sub-par arena.
Even such fundamental issues as what factors the owners will consider, and how they will conduct votes on the matters before them, aren’t yet clear.
“It’s what we’re all discussing right now,” Silver said.
There is an agreement between the Maloof family to sell its shares of the team to the Hansen-Ballmer group for $340 million – based on a $525 million valuation. A vote on that ownership transfer would require 75 percent approval among the 30 owners to pass.
Then there is the issue of relocation, which presumably would only come to a vote if the Hansen-Ballmer purchase were approved. Relocation would require majority approval of the owners.
Johnson, who has spearheaded the formation of a four-man team of proposed equity partners and pushed an arena financing deal through the Sacramento City Council for the second time, has long been optimistic that his city would get a fair shake in the process. Part of the reason, Johnson revealed Wednesday, is that there is a provision that would permit the Maloofs to accept a “backup offer” if owners were persuaded not to accept the Seattle deal.
“That, to all of us, was why we worked so hard in such a short period of time,” Johnson said. … “Secondly, I was assured by the commissioner and by the owners that we would get full consideration, an opportunity to come to New York and share our story.
“Think about it for a second,” Johnson said. “The NBA does not want to move a team from one market to another, period. We already know that. They normally move a team from one market to another when the fans don't support it or you can't build a building. That's not the case in Sacramento."
So in addition to arcane financial spreadsheets, political uncertainty and construction timelines, owners are faced with two key issues they’ve never faced before: 1) How do they set the dangerous precedent of moving a team from a city that has delivered a viable ownership group and the promise of a new arena? And 2) How do they weigh the relative financial strength of each market in their decision?
When teams have moved in the past – the SuperSonics from Seattle to Oklahoma City, for example – the door was closed on the team’s existing city when it couldn’t deliver on a new arena. Now, for the first time in its history, the NBA has the choice between two markets with new arenas in the works: the team’s existing city and the proposed poacher (which, of course, was the victim of franchise relocation only five years ago).
If all else is equal, do the owners simply vote on self-interest? Do they look at the projected economic contributions of Seattle vs. Sacramento on the league’s overall business and pick the one that will make more money?
“It’s one of the factors that we look at,” Silver said.
Further, do the owners simply look at whether the team will be a revenue-sharing payer or recipient in either city ? And what do the league’s projections say about which market is more economically viable for the overall business?
“It’s too early to say,” Silver said. “It’s part of the analysis.”
An analysis that obviously will be continuing for a little longer before the fate of the Sacramento Kings is decided.
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