The Maloof Brothers have entered into a binding agreement with Chris Hansen and his ownership group to sell the Kings. Since the Kings do not have a multi-year lease on Sleep Train Arena, it seems the Kings will be playing in Seattle for the 2013-2014 NBA Season. That is cause for celebration up Seattle, and consternation down in Sacramento; but this game isn’t over yet.
Sacramento has a fanatical fan base, a dedicated political leadership. They have several ownership groups that seem to be eager to buy the team to keep them in Sacramento, and make the rail yards arena work. Basically what I am trying to say is that this is far from over, and that the Kings very well might stay in Sacramento.
The five reasons the Kings might stay in Sacramento are (from weakest to strongest):
- Expansion to Seattle is still an option; Seattle is a market in need of a real regional sports network, and it sounds like Hansen is going to create one as part of the Sonics’s return. The income from that RSN would be able to help keep the franchise financially afloat and means that it wouldn’t need a huge chunk of the revenue sharing. Also, people keep bringing up the fact that the league was talking contraction during the CBA negotiations; stop, it was just a negotiating ploy to force the players union to take a more generous deal for the owners (who needed it, the majority of the league was swimming in red ink). Then of course there’s the fact that the owners split relocation and expansion fees; a relocation fee is probably going to be around $30-$70 million, while an expansion fee would be anywhere from $350-$450 million.
- Sacramento fans have pledged over $17 million in season tickets to a local ownership group; Here we Buy is a website were basketball fans in Sacramento pledge to buy season tickets from a local ownership group. Despite the douchebagery that is the Maloofs, Sacramento is still a strong NBA Market and should not be ignored. After all, $17 million is serious capital that the NBA would like to see its owners making off of its fans.
David Stern is giving Kevin Johnson a chance to present to the BOG; Sacramento Mayor Kevin Johnson has jumped in front of the relocation train before, and he will get that opportunity again. Fortunately for Sacramento, there is a lot on their side going into KJ’s meeting with the Board of Governers; they have an arena plan, ownership groups, and no other professional sports to compete for advertising/business dollars.
- It sounds like the King’s debt to Sacramento isn’t part of the sale; The City of Sacramento gave the Kings a $70 million loan back in the late 90’s. Currently, the outstanding debt on that loan is $67 million. Hansen is buying the Sacramento Kings for roughly $341 million (the $525 million is the total valuation of the franchise). It doesn’t seem that the debt payment is involved in that sale; this could be a potential hangup for the Hansen and company when they try to move the franchise to Seattle.
- This sets a really, really bad precedent for the NBA’s public arena subsidies; Sacramento put together a sweet heart of an arena deal for the Maloof brothers. The original deal was for a $391 million arena near downtown; of that $391 million, $220 million would be coming from Sacramento’s Construction Bonds, $58 million from the entertainment giant AEG, and the rest from the Maloofs and the NBA. If the Kings are allowed to relocate, despite this sweet heart arena deal, it indicates that no matter what a City does their team is not safe. Is that really something Stern and the BOG want to get into?
The Kings story is something that is pretty depressing, it’s like watching one of those lame dark comedies from the late 80’s and early 90’s. A storied franchise, with amazing fan support has been run into the ground and now looks like it’s on its way to another city that had its team ripped from it. Basically, this is anther indication that the NBA’s business model is broken.