Kings-to-Seattle move faces lawsuits, threats to punish Microsoft

With not much news today about the proposed purchase of the Sacramento Kings and subsequent relocation to Seattle — Chris Hansen and friends are still planning on buying them, Sacramento Mayor Kevin Johnson is still promising to find a local counteroffer — news coverage today instead turns to all the people who are trying to throw wrenches into the deal in one way or another:

All of these objections seem pretty much like longshots: The way I-91 was written, it’s going to be nearly impossible to challenge whether this deal meets its requirements, and while EISes are almost always challenged by somebody, at worst they usually just end up getting amended. (And there’s nothing to stop the city council from just revoting once the EIS is complete, of course.) As for California cutting ties with Microsoft if the Kings are moved, if the state is still buying Windows products despite everything else the company is doing, it’s hard to see where a little franchise piracy is going to change their minds.

23 comments on “Kings-to-Seattle move faces lawsuits, threats to punish Microsoft

  1. Which state does not rely heavily on Microsoft software? Can you name even one? I’ll go out on a limb here and say at least 90% of state software operating systems purchases go Microsoft.

    I’m really disgusted with my elected State senator would do this. If there was good evidence that Ballmer was breaking a law that was harming Californians, I’d say that should be investigated. But it’s not. It’s a Microsoft employee making a personal transaction.

    If a WalMart employee started committing crimes, I wouldn’t investigate WalMart to determine their role.

    This is f’n disgusting. I hope someone tells Steinberg just that.

    Yeah, this has me in a foul mood.

  2. Maybe one of you can answer this question: Isn’t Hansen paying only $490 for the team ($525M -$35M) as the relocation fee is “baked in” to the price? So the Maloofs are making .65*490 = $318M. But they also have to pay $77M loan if they leave. Meaning – If they accept a local offer, the offer only has to exceed $318-$77M = $241M, which does not seem like a lot (relatively speaking of course). If worst comes to worst, KJ could just forgive the loan.

    Or do I not have that correct?

  3. If Mr. Steinberg truly considers the Kings to be “one of my State and my region’s leading private assets” and I was one of his constituents, I’d be working hard to get him recalled on grounds of general stupidity.

  4. Pro Tem Steinberg, except when it comes to issues involving the Sacramento Kings, is a good, thoughtful legislator. But if he’s willing to go the route of proposing that the state cut off its Microsoft site licenses and switch to Word Perfect and Lotus 1-2-3, he’s taken a step closer to the deep end.

  5. No, KJ cannot just forgive the loan. He can run it past the City Council, but he cannot simply forgive the loan. And even if he did run it past the Council, it’d be suicide — these are actual bonds that are backed by actual assets. Forgiving that loan would instantly make those bonds junk, and the City wouldn’t be able to borrow any more money, for anything.

    Just for shear entertainment value, I’d like to see KJ suggest it.

    By the way, it looks like KJ hasn’t noticed that Sacramento has a Nordstrom within its city limits. Maybe KJ should see what he can do to close that business if this move to Seattle succeeds.

    It’s a little harder for me to answer your valuation question. Just to be quick, you’re right, a $525M sale doesn’t leave the Maloofs with much revenue. That’s how deeply this franchise is in debt. It’s ridiculous. The NBA should never again allow an NBA franchise to accumulate over $200M in debts. Maybe there should be a bylaw about this.

    $525M in revenues; they paid $247M for the team and arena; the Maloofs own 53% of it; all the debt is spread across all the owners; and the team consistently loses money. I think what happened here is that the bean-counting Maloofs finally caught up with the rah-rah Maloofs, and thus we have a sale (that won’t generate much in the way of revenues for the Maloof family). They’re probably very happy if the final numbers are in the black at all.

  6. Griffin: The Maloofs still owe the $77m loan if they stay, it’s just that they don’t have to pay it off immediately. So a Sacramento buyer would have to offer at least $318m, which is a lot for 65% of an NBA team.

  7. MikeM: If the sale forced him to look around and realize there was an alternative that’s a) 1/8th the cost and b) something that a few large corporations are starting to switch to (proving its viability), then this is something that would presumably save the state money.

    That has you angry?

    (That’s just for office applications, for enterprise products there are open source alternatives that still would mean about a 30% savings over MS equivalents).

  8. No, what has me angry is the gangster-move.

    “Nice little company you have there. Be a shame if, say, something bad were to happen to it.”

    Microsoft is doing nothing illegal here. One of Microsoft’s employees is attempting a private transaction that has nothing to do with the company. This sale is completely unrelated to what the State government does.

    So I can completely agree with all your arguments, but still point this out: Wrong jurisdiction.

  9. Perhaps because I am a small, petty human being I find it kind of funny. But because it’s not 1996 anymore and the MS hegemony might be ending, that the state of California could end up saving money by thumbing its nose at Ballmer (without cutting said nose off to spite face), makes it far less gangster to me. But I’m neither a Kings fan nor a California or Washington resident so I have less skin in the game.

  10. If I were Steve Ballmer, I’d send Steinberg one of those “Thank you for your concern” greeting cards, and then carry on about my business. The State will in no way change their IT procurement processes if the Kings move to Seattle.

    They may change them for other reasons, but not for that.

  11. It turns out I work directly across the street from the location where KJ is about to address the media. I’m thinking of heading out there, but I’m not sure I’m in the mood for a pep rally, which is really all this will be.

  12. Might it not be wise for the state of California to use Google’s OS and basic word processing/excel software ? I’m sure Google is based in California and it’s not like they couldn’t enjoy the tax revenues from keeping the purchase in state.

  13. Regardless of whether the state would be better or worse off without Microsoft products, I’d be shocked if someone in the – ahem – California Gov’t ethics dept wasn’t sending smouldering memos/emails to Steinberg as we speak.

    What he has suggested is that the state will make it’s purchasing decisions based on unrelated business transactions… telling Ballmer to keep his hands off the Kings in some sort of twisted quid pro quo isn’t really any different than demanding that Ballmer build a new pool & boathouse on a friend’s comfy retreat.

    I don’t live in California either, but I’m pretty sure they do have purchasing standards and procedures, and that “Keep you billionaire hands off our sports teams” doesn’t appear anywhere in it.

    Steinberg wedged his foot firmly in his mouth. Pro Tem or not, If he doesn’t get ordered to apologize for the remark, I’d be surprised..

  14. There is absolutely no chance Steinberg will be asked to apologize. I’d give that about a 0 on a scale of 0 to 2 trillion.

    However, I would not be surprised if the director of DGS replies with a short note: We will not waste our time answering these questions. Thank you.

    I did not attend the presser, but even the local fan blogs are underwhelmed. Nineteen investors have stepped forward and pledged $1M each to help keep the team.

    Guess they just need 506 more of these, eh?

  15. KJ is promising a whale, but what he’s saying is there is at least one billionaire whoon fee. is as batshit insane as Hansen and Ballmer are. Good luck with that, KJ.

    Remember, if someone out there bids to keep them in Sac, they need to throw in another $140m for a new arena. The only difference is sac has no relocation fee.

    Hansen is obviously highly motivated.

  16. Well, they don’t *need* to build a new arena. They could buy the team and stay at the old arena for the time being.

  17. I can tell you’ve never been to that arena.

    It is a crappy building. Where I draw the line: The Maloofs have neglected this building to its demise — and how, exactly, is this the responsibility of the taxpayers?

    It was built with private money.

  18. Sac Bee is now reporting that Burkle and Mastrov are going to make a “dream-team” bid. No reports on how much the bid would be.

  19. Andy: Does MS have an armada of people combing the web, waiting to counter any suggestion Windows 8 might be terrible? How much does that gig pay?

    Just googling “Windows 8 review”… “The thing blows” “Usability experts finds Windows 8 on a PC confusing” “A Christmas Gift for Someone You Hate” “The Windows 8 that might have been” And that’s just the first page. So Neil picked from a plenty bountiful tree.