KJ: Maloofs ‘Probably Prefer’ Kings In Sacramento

HANG TIME WEST – The Maloof family, disliked beyond measure in Sacramento for the way they have run the Kings on and off the court and ultimately for putting the city on the brink of losing the team to Seattle, have received support from the most unlikely of sources: mayor Kevin Johnson.

Johnson has recently gone out of his way to be complementary toward the Maloofs, notably at his State of the City address and most recently at Tuesday’s city council meeting that included approving the non-binding agreement with private investors to build a downtown arena. It was impossible to miss because Johnson could have easily avoided mentioning the Kings’ owners both times without coming off as unusual. It was especially impossible to miss because the Maloofs’ disgust for Johnson is a major reason, and perhaps the No. 1 reason, they never told Sacramento officials the team was for sale.

But, Johnson told NBA.com, he has remained in contact with the family, there are no hard feelings, and Kumbaya. Group hugs all around.

Oh, and the Maloofs want the Kings to stay in Sacramento.

(You just can’t make this stuff up.)

The recent obvious change of tone toward the Maloofs – including announcing Ron Burkle, likewise not on the family’s Christmas card list, as heading the arena project rather than part of the proposed ownership group – smacks of Johnson trying to mend fences, just in case. The Board of Governors will vote on the sale and relocation to Seattle as part of the April 18-19 meeting in New York, Sacramento has put together a strong counter-offer and wants to be in position if the BOG turns down Seattle in favor of the California capital.

If Sacramento beats Seattle, all the Sacramento group has done is stopped the move. It still has to buy the team and the Maloofs can turn the screws and inflate the price tag. The Maloofs can even keep the team. There is essentially no chance that happens, but consider the number of developments that have already occurred no one saw coming. At the very least, the Maloofs could drag negotiations into summer and still get out Monopoly-money rich before having to hide out another season.

Sacramento may still need to make nice with the family. There is the recent evidence that Johnson has, after the mayor and his top aides wrongly let earlier arena negotiations get personal when they should have understood the Maloofs are very emotional. But the mayor said that is not the case.

“No,” Johnson told NBA.com. “We’re just talking about the facts, and the facts are this: They have been a huge part of this community, they gave a significant amount of philanthropy back to this community, they kept the team here for 10-plus years, which is great. It didn’t end the ideal way. I’ve talked to and communicated with them since then. There are no hard feelings. We wish them the best. They wish us the best as a community.

“We think at the end of the day, if the price that they were going to get is similar to Sacramento, they would probably prefer to have the team in Sacramento. They certainly can’t say that. But I know they have an affinity for Sacramento and I believe very strongly that this is the way the story is supposed to end at the end of the day. They’ve been good to our community. We’re just thankful for that.”

No hard feelings? Seriously?

“They didn’t have to put in their deal that they can accept the backup offer,” Johnson said. “If there was no backup offer, we wouldn’t be able to do anything. There’s a backup offer because ultimately the NBA approves or disapproves a deal. By them being able to accept a backup offer, it keeps a community like Sacramento in play. If not, I have no idea what we’d be able to do. A silver lining in everything.”

Johnson is right to note the Maloofs’ positive impact around the region, a fact now quickly overlooked. No matter how much heat the family has taken, and will forever take, they poured big bucks into the market as well.

But to suggest the Maloofs want the Kings to end up in Sacramento, not Seattle, is the purest sign of all that KJ is schmoozing. If the Maloofs really wanted that, they could have made it happen. At the very least, they could have alerted Sacramento that the team was for sale, allowing a clean start rather than forcing the city to play catch-up to an excellent bid. The Maloofs did not do that because they wanted to jab a finger in the chests of Johnson and top aides who crossed the line by dealing with the family like dealing with North Korea. The mayor is trying to do something about that mistake now.

26 Comments

  1. Loose Change says:

    Well, they already sold the team. Ill neva know what goes on from behind the scenes but thats what I read. Plus, didn’t Hansen offered them more money anyway?

  2. Jason Page says:

    This article is a very good read on facts that the NBA is aware of and why Seattle group is so quiet towards media
    http://www.newsreview.com/sacramento/sacramento-vs-seattle-tale-of/content?oid=9423417

  3. Jason Page says:

    Sacramento (thanks for correction) city government can not afford arena too and the GOP knows that! They are facing short falls financially that puts general fund in jeopardy.

  4. tony.m says:

    http://ow.ly/jrOZt. a Great Video , keep the Kings in Sacramento.

  5. Ric Flair says:

    woooooh seattle

  6. elliottknows says:

    Simple addition can help sum up where this situation currently stands:

    SAC
    -Sac currently is where the organization resides – less complicated than relocating = 1
    -NBA approved the Sac Arena deal last year that the Maloof’s backed out of – shows NBA is interested in Sac = 1
    -Ranadivé is currently an NBA owner and was fully vetted by NBA – known and approved commodity = 1
    -Burkle is the “arena master ” – huge confidence for NBA (and Sac) to have him involved with the league = 1
    -Sac has proven to be a viable market for NBA = 1
    *total = 5pts

    Seattle
    -Seattle has proven to be viable market for NBA = 1
    -Hansen and company have a heap of money = 1
    -Current binding agreement with Maloofs to purchase 65% of franchise – waiting for NBA approval = 1
    (the 7% of shares can still be matched by Kings minority owners, so this is not a ‘plus’ for Hansen…..no yet)
    *total = 3pts

    So, Sac = 5pts & Seattle = 3pts. I would say Sac is doing well. In fact, Sac now appears to be in the drivers seat. Now, there are many facets to this Sac vs Seattle saga, but when you water everything down and get down to the main differences, the above comparisons/advantages are what it comes down to in the end. Well, what is comes down to is the BoG really. All Sac needs is just 8 “no” votes and the team doesn’t go to Seattle.

  7. King4Life says:

    I just want my Kings to stay here in my home of Sacramento. The Kings were the reason why I became a basketball fan and for Seattle to think they are going to take our team away from us without a fight…. They are underestimating our community I have a lot of faith in our mayor and will stand by him until we get our Kings to stay where they belong.

  8. CFS clerk says:

    Why do people from Seattle kept saying that their team was stolen from them? Oklahoma didn’t steal your team..they left because you guys couldn’t built an Arena… Unlike here in SAC, Mayor Johnson and city of Sacramento came up with an arena deal last year and this year to keep the Kings in town. That shows you guys from Seattle how much we support the Kings…#HERE WE STAY, #HERE WE BUILT!!!!!

  9. Casual Observer says:

    Not sure why my previous comment got deleted but a couple of other useless ones were allowed. My point whole point was nothing has been decided and the influencers on the NBA BOG will likely make the decision. Bottom line is Sacramento only needs 8 votes to keep the team in Sacramento. The Maloofs could always change their mind and not sell to Sac group out of spite but I’m guessing they’ve more than worn out their welcome since purchasing the Kings. This is the second NBA team the Maloofs will be selling.

    Finally, the biggest bid doesn’t always win. If that were the case, Larry Ellison would own Golden State. Instead the NBA awarded Joe Lacob, who was a minority owner with the Celtics at the time. From recent protocol, the NBA likes to vet potential owners via having them as minority owners first. Ranadive must have told Stern he was interested in buying a franchise after he became a minority owner in Golden State. I don’t think it is coincidental that Ranadive came onto the scene after Stern told Mastrov/Burkle they needed to up their bid. Stern might have introduced Ranadive to Mastrov that night to facilitate the process for Sacramento.

  10. asian kid says:

    well we lost our team (seattle), to a different city but we are trying to get another one can’t be mad at the fact that we just want a team back in seattle, you know you would feel the same if your home team was stolen from you.

  11. Spire says:

    why is it that idiots and inconsiderate people like the maloofs are always the richest

  12. mike says:

    IMHO. If the Kings STAYS, KEVIN JOHNSON is the HERO for saving the team from relocating..If the Kings goes to SEATTLE, the Maloofs and “seattle group” are the HEROES for bringing back a nba basketball team to SEATTLE regardless of their lousy standings.

  13. Sacramento Stands says:

    There is no forgiveness. Nor will there be for the NBA if the Kings leave Sacramento.

  14. starving in NJ says:

    mr. burkle did we give all our consessions at a. p. so you could invest in the kings? things are tough here at a.p. in n.j.!

  15. tony.m says:

    Chris Hansen’s Valiant Capital Management Takes A Record Hit

    As reported by the Seattle Times and Institutional Investor’s Alpha the numbers are in and the last quarter has not been kind to Chris Hansen. Valiant Capital’s portfolio took a 7.7% hit in Q4 2012. This contrasts to the S&P500 only decreasing 1% in that same quarter. Over the full year 2012, Valiant returned 10.3% but, if the 2% management and 20% of gains were pulled from that as a fee for the service is correct, investors may have only seen 10.3% * 0.8 – 2 = 6.2% of that. That’s pretty abysmal compared to the S&P total return of 16% in 2012.

    According to regular SEC filings, Valiant Capital’s largest holdings are in Apple and Facebook. Apple decreased from around $660/share to $532/share from October 1 to Dec 31, 2012. Facebook increased from $22/share to $26.6/share during the same time period. For a preview of what Q1 2013 will bring to Valiant I would suggest you take notice that Apple is trading around $430/share currently with Apple trending lower, and March 31st is just around the corner. Facebook is up slightly to around $28/share. For the most part, the long-term holdings of Valiant Capital Management aren’t actively trading around, as you can see from this Q4 2011 holdings summary.

    As most investment funds collect fees as a set % of money managed and a larger % of any gains being taken by the fund itself, Valiant’s performance may not be directly related to Hansen’s wealth. However, in the electronic age we’re in now, transferring money out of an under-performing fund into one with more promise can be accomplished in a matter of minutes. Hansen will need to do some things that help investor confidence before announcing further fund losses or he might need to scale back the lifestyle to keep his net worth above $300 Million.

  16. itsfinn says:

    The Maloofs did not approach Hansen, Stern introduced them and suggested that Hansen make an offer. Stern laid out the terms and suggested $500/m as a number. Hansen threw in 25/m extra and also agreed to pay off the Kings debts to the NBA as an extra bonus to Stern.

    Burkle made a low ball offer last August and was rejected. If he had made the 500/m offer then he would own them. Unfortunately Burkle is a bottom line guy and will only buy bargains and then he leverages other people’s money when possible. That is why he is rich.

    A couple of weeks ago Stern publicly humiliated Mastrov about being so cheap so Mastrov brought in two more money guys as he cannot swing the deal himself and Burkle is only interested in leveraging the city money and free property for development around the arena.

    As for the 7% Sacramento has until Friday at close of business to match. The 25 millionaires KJ signed up cannot bid on the 7% (even if they wanted to) so only the 3 minority owners have a right of first offer. A great case can be made that they already had time to make an offer for the 7% but failed to do so. There is no Right of First Refusal, only a Right of First Offer when notified of an interest in selling.

    KJ and his whales were caught with their pants down on the 7% as they needed to be vetted by the NBA (a three week process) before being allowed to bid and none of them made the application. Now it is just blather from KJ about Hansen buying the shares. The 7% is meaningless in the grand scheme of things but it does show Hansen, once again, putting his money on the line. All the Sacramento group have done is run there mouths and keep their money in the deepest pocket they have.

    • JarHead44 says:

      What amazes me is all the information you have regarding this transaction! I thought there was a gag order on all owners and NBA employees regarding this transaction between The Maloofs and the Hansen Group. But, this can only be the only explanation! So tell us, no one else will know, are you Mr. Silverstein, Commissioner Stern’s secretary vetting his calls, no wait you are the Clay Bennett himself posing as a Sonics supporter! Come on come clean!

      When did Stern set up this meeting between the Maloofs and Hansen? Stern has met with Balmer and who wouldn’t want to meet with someone who is worth $19 or so billion. I just had lunch with Warren Buffett’s 15 cousin twice removed from his mother’s side but, I am not buying a railroad anytime soon! But back to the point, so the negotiation was set at $500 million and Hansen, just to sweeten the pot through in another $25 million. Okay, so lets throw unneeded money at desperate owners needing cash for no reason! Just to be a nice guy I guess. If that is how he manages his hedge fund, how did he make all that money? With the exception of $30 million, Hansen and company, has not paid anything for the Kings either! And when they do, if they do, it will be roughly $320 million, minus of course the $30 million already paid, $70 million to the city of Sacramento, $100 million owed to the NBA, and an undisclosed relocation fee! I believe the Maloofs will then have roughly $50 million remaining. Not chump change for us chumps, but I digress!

      However and since you are working in the NBA office you can confirm this, the sale price does include these settlements of debt correct! Because if they do not and Hansen Group pays for 65% of the $525 million (valuation figure not sale price), but you already know that, plus $15 million for 7% interest (that is not final either, duh you know that too, I am sorry), and another $200 million (noted above), that is what roughly about $555 million for the Kings. Even Mr. Hansen, Ballmer, and the Nordstrom’s are that desperate for a team! If they were willing to throw money like that around for no guarantee on return of investment, they would not be where they are financially. This does not include SoDo.

      As you so eloquently explained, the whales have not stopped running there mouths and put up nothing. Well, $30 million is only about .10% of the Hansen groups net worth. That is like me dropping $300 at the tables in Vegas with Buffett’s cousin, it was after lunch and not at the Palms!

      The end game for Sacramento could not have been made easier by the Maloofs, the NBA, and Hansen to a certain degree. Allow the enthusiastic horse set the pace for the race and then the old work horse can make its move down the stretch! I agree with you, that Stern met with the Maloofs, Hansen/Balmer but not together. He told the Maloofs, ‘you are selling and I will see to it. Mr Hansen/Balmer I have a team you MAY be able to purchase. However, you may see a counter offer from the city for that team and there are no guarantees.’ Otherwise, with other owners involved with the Kings this back door meeting cold be perceived as collusion and that is against the law and brings lawsuits. Although you already knew that or did you miss that day of law school?

      Can I be honest, you really need to pay attention more in the NBA office meetings or you won’t be employed there much longer! I am just saying!

  17. Casual Observer says:

    Hard to say if the Maloofs did all of this out of spite. I doubt it. They don’t have to accept backup offers. One BIG reason they likely invited the Seattle group to make an offer is that they knew Sacramento would come up with a bid. The only thing that can drive the price up is two cities competing for the team. The Maloofs likely wanted to sell the team all along but were looking for two groups to buy the Kings in order to drive the price up. This is why they went to Anaheim and Virginia Beach over the last year. They were just looking for a competitive offer. It is called supply and demand and getting the best price possible. They wouldn’t tell Mayor Johnson the team was up for sale until they had secured that other offer. The Maloofs are going to make off like bandits on this one because of how they’ve handled it. And I do think they would rather see the team stay in Sacramento. They have no ties to Seattle and all their ties are in California.

    The 7% secured by Hansen yesterday was a known thing by Ranadive, Johnson and the rest of the partners in Sacramento. Cook has said told local sources in Sacramento he has no intention of letting the 7% share go and will match it and would never do anything to help the group’s chances in buying the team. The other minority holders of the Kings have 15 days to also match the offer Hansen put forth for the 7% share. My guess is Cook came to an agreement with Hanson in order to let the others know the price and they will sell it back to him after he gets out of bankruptcy court. This is more like Donald Trump filing for bankruptcy. Finally Hansen said yesterday that he simply tried to get the 7% in order get back in the spotlight. He will pay nothing and get nothing and get good publicity all while maintaining the gag order the league has placed on him. He needs to stay in the good graces of the league if he wants a team and this is why he hasn’t done anything untoward.

    Finally, the backup offer can easily be taken if the league finds anything wrong with the first offer. Seattle also needs 24 votes to say yes while Sacramento only needs 8 to say no on the board of governors vote. Remember the BOG already said yes to the previous Sacramento offer last year of building a new arena even with the league’s help. It was the Maloofs that backed out. The ownership and arena are two different issues. The Seattle group has no one who’s built an arena the way Burkle has. Burkle is the lynchpin for the arena deal while Ranadive is going to own the team. These are actually two separate transactions. Seattle has no one like Burkle, who has experience with building arenas for specific uses.

    Based on all of the above and the fact that Stern essentially gave away the fact that Sacramento will have the opportunity to match or better their offer., I’d say Sacramento is in the driver’s seat. The BOG won’t look at Sacramento’s offer as a backup offer.

  18. Jason Page says:

    I think the Maloof family is not happy and holding a grudge with Sactremento for whatever reason? The Maloof’s do not have to accept any offer from Sacremento group and it is strange that they did not announce they were selling their share of the team prior to deal with Seattle group. The fact that they negotiated and sold the 65% they own is a pretty good indication of all of that! All the effort Seattle group has put into offering a complete package is looking really good to the other owners who will vote on it. The gag order for the Seattle group is another indication they are looking very hard at their package and the 7% just purchased makes an even stronger case. I put Sacremento groups chances at the percentage of shots missed at free throw line by Steve Nash.

    • Tony E. says:

      Please learn to spell “Sacramento.” Thank you.

      • Jason Page says:

        Sacramento (thanks for correction) city government can not afford arena too and the GOP knows that! They are facing short falls financially that puts general fund.

      • Jason Page says:

        Sacramento (thanks for correction) city government can not afford arena too and the GOP knows that! They are facing short falls financially that puts general fund in jeopardy.

  19. Brien says:

    I don’t buy it. KJ is just trying to smooth things over with the Maloofs in hopes a deal can be worked out after the BOG denies their sale to the Hansen/Ballmer group. Make no mistake about it, the ENTIRE city is pissed at the Maloofs for trying to sell the team to Hansen/Ballmer without giving Sacramento a chance to buy the team first. Their spiteful actions will NEVER be forgotten.

  20. Karen Day-Lyon, RN says:

    Yes, but……….Hansen just bought another 7% of the team yesterday (making him a 72% owner), he/Ballmer/Nordstrom have a signed and (presumably) binding contract with the Maloof family, have a capitalized arena agreement signed off on by King County and the City of Seatte, and have paid $30MM up front as earnest money (non-refundable per the contract), with arrangments to house the team’s games until the new arena is finished. One would think that, in terms of timeline before the S offer(s)/plan(s), and the potential for a high dollar litigation if their contract is not honored, would influence the BOG, who –as has been said many times in the past weeks–NEVER do anything that is against their own self interest. How much do dyou think they want to pay out in damages if the SEA ownership group sues and wins? Also, what makes SAC think that they can capitalize their share of the arena deal on parking taxes alone???? The parking and hotel taxes worked for Safeco Field here in SEA, but……….SEA has a bigger tourist industry than SAC.

    • Jeremy says:

      Hansen has no ground to stand on if it comes down to legal action; he put that 30 mil up front knowing full well it is still up to the board of governors to approve a sale. David Stern has said all along Hansen’s group does not dictate the sale of any team. It is solely up to the board of governors and it always has been. Just because he took it upon himself to put up that money doesn’t give him the right to sue anyone. That case would get thrown out of court so fast it probably wouldn’t make the next day’s news reel.