The Business Of Buying An NBA Team

HANG TIME WEST – Now the group trying to buy the Kings and move them to Seattle has increased its offer in what is either the latest smart strategy move to put disorganized Sacramento on the clock with another problem (the Seattle viewpoint), or the desperate act of an operation that knows a big lead is about turn into defeat and is resorting to Hail Mary passes (the Sacramento viewpoint).

The $25-million bump by the always-proactive enterprise from Washington state would push the sale price for the Maloof family’s 65 percent of the team to $357.5 million – and put the total valuation of the Kings at $550 million. The Sacramento Kings. The Sacramento Kings annually residing in the lottery. The Sacramento Kings rated by Forbes in 2012 as the 23rd-most valuable franchise in the league, with an estimated worth of $300 million.

Those Sacramento Kings.

Except, in what has become the factor too often overlooked, no one is trying to buy a basketball team. That goes for both sides, the Chris Hansen-Steve Ballmer group aiming for the reincarnation of the SuperSonics and the Sacramento counter-strike led by mayor Kevin Johnson and Vivek Ranadive and Mark Mastrov as majority investors trying to keep a civic institution in town. Neither party is paying a record amount for an NBA franchise, the prorated equivalent of $100 million more than what the Warriors sold for in 2010, for the chance to decide what to do about DeMarcus Cousins.

They are trying to buy a piece. As much as they are sports fans with the chance for the ultimate toy, the Kings are the catalyst for a much larger plan. The Washington Generals would be worth $550 million.

Both cities have arena plans. Seattle’s projected building is close to the stadiums of the Mariners and Seahawks. In Sacramento, though, the bigger picture is the revitalization of an entire downtown area. No NBA team, no arena. No arena, no economic injection from construction. (Or at least no arena of this scale – Johnson has said his city will need a new entertainment complex with or without professional sports as an anchor tenant.)

Also, Ron Burkle, once part of the Sacramento bid for the arena and team before a conflict of interest forced him to drop out, has committed to being part of development around the arena. Burkle invested in your city is a very good thing.

In financial terms alone, apart from the emotional value of the only major-league team in town, losing the Kings would have a dramatic effect. The team is a marketing tool that helps Sacramento stay on the national map, and some local leaders through the years have expressed worry that convention business would suffer without the loud presence of the NBA.

How much is having the league back in Seattle worth to Hansen-Ballmer? According to Chris Daniels of King 5, the NBC affiliate there, the group has alreaady spent $100 million just to put itself in position for the honor of setting the value of a 28-53 team at a record level. This is, of course, about much more than the 28-53 team that could be playing its final game in Sacramento when the Kings face the Clippers on Wednesday night at Sleep Train Arena. The Seattle group envisions $40 million a year from local television alone, Daniels reports.

The original plan was to have Sacramento-Seattle resolved when the Board of Governors meets Thursday and Friday in New York. When both cities made presentations to a group of owners and league officials April 3, commissioner David Stern raised the possibility of the answer not coming within days of the end of the regular season. Tuesday, it became official: no vote this week, and no new date set.

8 Comments

  1. Mitch EDH says:

    Unfortunately for SEA this is playing out well for the Kings. SAC is abiding by NBA process for months. The reason for no vote this week is the required amount of time (cooling off period if you will) for the owners to receive the bid from Sac (Tuesday) and then vote (this upcoming Tuesday). They will inform the SEA group they don’t have the votes; they will rescind the offer. This will be leaked either on Thursday or Friday.

  2. Brandon says:

    Stern needs to stop holding Sac’s hand through this whole process. Seattle is far ahead of this deal and he need to let the owners vote. He is a lame Duck Commish.. And one way or another isnt going to save face, unless expansion comes into play.. Let the BOG vote.

    If Sac’s money or plan isnt there it wont be unless they go out and add more “whales.” By the end of this deal no one in Sac is going to know who is in charge..

    Oh wait KJ will end up running it all.

    • cplu5 says:

      I think the fact that Stern is publically so firmly in Sacto’s corner is bad news for Sac. He’s retiring soon and doesn’t want to be remembered as the bad guy. Smart move by him would be to latch on to the destined loser, so when they get shafted by the owners, Stern will be able to say he tried soooooooooooo hard to keep the team in Sac.

      In full disclosure, I’m a Seattlite and would love the Sonics back, but hope the team stays in Sac. Ideal situation is we are awarded an expansion team immediately and both sides are appeased. Oh and Isaiah Thomas is traded to SEA ;)

  3. Gary Payton says:

    Increased bid just shows their serious and the additional 7% looks pretty darn good to the owners! Property for stadium have been purchased, stadium financed 60% private money,40% public that the city can afford and will be built by 2015/2016 season. NBA owners will make money, which is just business and that is what they are about. All the pieces are in place for Seattle group and took over two years….

  4. asdasd says:

    Seattle should wait for the expansion. Just leave the kings in sacramento, if you don’t like what OKC did to you, don’t do it to other cities. wait till the expansion..

    • Gary Payton says:

      Okeville was a different story! A story of two bad owners, Howard Shultz, Starbucks, who turned his back on Seattle and Clay Bennett who lied to the city of Seattle, along with lying to several NBA greats that were trying to help him with a new stadium deal while he was waiting to move team ( Maloof family comes to mind) and driving the Sonics into the ground!. Key arena was totally rebuilt 11 years earlier at the time and is a great place for average fan to watch b-ball. I and a lot of people up here would prefer an expansion team granted to Seattle at meetings and both cities would be very happy! If Seattle gets the Kings, I think the Kings history should stay with Sacramento and help them get a team back expansion or otherwise. Okeville likes to parade our history around and that is rubbing salt in an open wound. The best Sonic record was 63 and 19 and we faced the best team ever to play the game in the finals! Nothing but respect for a great b-ball town in Sacramento!

    • Logan J Sneatlum says:

      In No Way Are We Doing What Bennet Did To Us……..He Bought A Franchise And Lied About Keeping It There……Kings Are For Sale And Hansen Made A Bid……He Didn’t Lie……WereNt Established In Sacramento They Was In Kansas City Before That……