One Seattle arena lawsuit tossed, while Sacramento seeks to bridge growing arena funding gap

Lots going on this weekend in the are-the-Sacramento-Kings-moving-to-Seattle-or-aren’t-they controversy, at both ends of the West Coast:

In short: Not much we didn’t already know or expect, and nothing that’s likely to sway David Stern’s mind one way or another. If the NBA had to decide today whether to move the Kings to Seattle, I expect they’d take the bird in the hand and okay it; but given that they have another seven weeks to make a ruling, expect lots more of these kinds of headlines for the foreseeable future.

 


16 comments on “One Seattle arena lawsuit tossed, while Sacramento seeks to bridge growing arena funding gap

  1. What I expect is that the whales and the City will make a “competitive” deal, but the terms will not be disclosed (in the interests of privacy). We’ll hear rumors, and that’s it. There will be seven weeks of, “See? We told you we’d keep them!”. But one of the articles this weekend says that the NBA cannot require the Maloofs to accept one offer or another; that it’s up to the Maloofs to select an offer.

    On January 7, they accepted an offer; on January 21, they finalized it; and on Feb 1, $30M changed hands to secure the deal.

    KJ has to find a reason the Hansen offer is invalid. That’s his one and only chance. And I don’t think he’ll find one.

    One more item to add to your list: Tomorrow, the bankruptcy judge will decide whether or not to disclose the outline of the Hansen offer to parties wishing to bid on Bankrupt Bob Cook’s 7% share of the team. It’s still hard for me to imagine that one will simply be able to purchase FROR by buying 7% of the team at a bankruptcy auction. That would be a huge loophole; I would be very surprised if there is nothing in the bylaws to keep from defending the owners against a hostile takeover.

  2. The NBA can’t force the Maloofs to accept a competing offer, but they can reject the Hansen bid and tell the Maloofs, “You want to sell, sell to somebody local.” Which is what MLB did to stop Bob Lurie from moving the Giants to Florida, for example.

    Not saying the NBA is actually going to do this, just that they can.

  3. That would be unprecedented, Neil. Look back at the offers they’ve rejected; Minnesota to New Orleans. Look at the reason they rejected it: Poor capitalization. That’s not an issue here. The NBA found a solid, substantial reason to block that sale and move; that was legitimate.

    I keep getting back to the reason MLB can do that kind of stuff, where the other sports cannot — the federal antitrust exemption. If the NBA had it, then yeah, they can block these deals. But they really want Steve Ballmer in this club. I just can’t see the NBA doing what you’re describing.

  4. The MLB antitrust exemption is overblown — note that MLB had to give Florida the Rays after it blocked the Giants move, since they were afraid of an antitrust lawsuit. The situation would be more or less the same here: Hansen & Co. could sue, nobody knows how it’d turn out, and the NBA could (and undoubtedly would, since why not?) offer them either an expansion team or the next team to move as a payoff.

    Like I said, I don’t really expect this to happen. But on the off chance that Sacramento decides to throw a lot of money at an arena and finds a pile of rich people willing to accept the boodle, I can certainly see the NBA wanting to reward them for meeting the shakedown terms, and doing so.

  5. Well, even if Sac “wins”, it’d be at least a year before they saw a dime from their parking selloff, and there’s a good chance the selloff wouldn’t produce enough money. The NBA knows this; I think they’ll act accordingly.

    I think KJ knows the parking selloff won’t produce enough money, and he would have simply proposed a bond sale to make up the difference.

  6. I also think that since Burkle is part of the bid to buy AEG, that really puts a damper on his enthusiasm for buying the Kings. AEG owns 30% of the Lakers; I cannot see a situation where Burkle would control 65% of the Kings and also be part of the Lakers ownership group. And yeah, he could see about AEG selling off its share of the Lakers, but that just sounds like a bad idea to me.

    Burkle probably won’t put a dime into the Kings if his group manages to buy AEG.

  7. The political will exists to meet the NBA’s shakedown terms but what doesn’t exist is the $250 million or more contribution especially if many of the existing city-owned parking spaces in one of your proposed arena sites could be turned into a basketball court. Term sheet 2.0 will consist of the same ingredients of scotch tape, gum, and paper clips as did Term Sheet 1.0.

  8. Hey guys, I’ve been following these developments very closely since I’m an avid Seattle sports fan and I appreciate all the insight you’ve provided regarding the Kings/Sonics issue. I have to say, KJ seems to either be out of touch with reality or he’s trying to save his job during future elections (probably both). In the attached interview with ESPN’s Outside The Lines from a few days ago he attempts to portray Sacramento in a stronger position than Seattle merely because no franchise in sports has been moved four times. Who cares? It’s entirely irrelevant. It just seems Sac has offered too little too late.

    I have absolutely zero business experience, however, it seems, as Mike already stated above, the BOG would need to find a substantial flaw in the Hansen offer to reject it. Likewise, I don’t see how the assembly of a Sacramento-based ownership group is the least bit relevant to anything. The BOG cannot compel the Maloofs to sell to that group or any other group for that matter. Your thoughts?

    http://www.youtube.com/watch?v=P__vuRCAizo

  9. I haven’t clicked on that link for days, Jeff, but my thoughts when I first saw it was: Arrogant.

    He’s trying to come off as being supremely confident, and I think he just looks foolish.

  10. Before the City of Sacramento agrees to spend another $250,000, wouldn’t it make some sense to find out if the Maloofs will do anything other than ignore the offer? If we’re just going to give Dan Barrett Sports another $90,000 only to have the Maloofs shred the offer as though it’s just another useless credit card offer, we’re wasting precious resources.

  11. Haha… for the second time at a Seattle City Council meeting the arena consultant for Stafford Sports said the Nets arena was 1 billion because of the land costs. I’m not sure how 100 million as the Seattle land value cap on 7 acres is so much less than the 100 million paid for the 9 acres of Atlantic Yards (paid with only 20 million down). I guess he didn’t pay much attention to the costs when he was also involved in brokering that Brooklyn deal. Sports consulting must be a job to set up owners with big money who gotta be ballin’, plus cans of rustoleum are really expensive.

  12. The City’s proposed resolution has been published. It is about as vague as I expected it to be.

    http://sacramento.granicus.com/MetaViewer.php?meta_id=395243&view=&showpdf=1

  13. Thanks for posting that, Mike. I agree with your assessment of the Sacramento City Council’s vague approach to this. It just seemed so empty as if Sacramento is merely going through the motions at this point, resigned to their fate. The more I follow this situation the clearer it becomes of how done this deal is. KJ isn’t meeting his own deadlines and time is running out. Oh yeah, and so far not ONE reason has been identified for the BOG to even consider rejecting Hansen’s offer for the Kings. I admire KJ’s passion, but I also find it superficial. Not superficial in the sense he doesn’t actually want to keep the Kings in Sac, but superficial in the sense he already knows he’s fighting an unwinnable battle.

    In less than two months the Sacramento Kings will be the incarnate Seattle SuperSonics.

  14. The Seattle court settlement with Bennett set some scenarios where he would return the Sonics name/trade/logos to Seattle. Those specific scenarios (a new team or a relocated team) all required playing at a $300M-budget renovated KeyArena. Last we heard on the name the city of Seattle is “asking Clay” to return those. The MOU requires the city to assist Hansen’s efforts.

    Considering the settlement cost Bennett $45 million to the city of Seattle, Clay may decide the Sonics name is worth about that much to him.

    http://www.kirotv.com/news/news/fans-should-hold-buying-sonics-gear/nT4j4/
    City of Seattle attorneys are expected to begin the process of requesting Sonics naming rights soon, and they’ve promised to do that at no cost to Chris Hansen.

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