Seattle arena lawsuit dismissed, as Hansen agrees to pay fine for Sacramento referendum funding

Yesterday was good news, bad news for would-be Seattle arena builder Chris Hansen: The environmental lawsuit against his would-be Seattle arena was unanimously tossed out of court, and then he agreed to pay a $50,000 fine for failing to report $80,000 in campaign contributions to the group trying to hold a referendum on a Sacramento Kings arena. Campaign contributions, by the way, that Hansen now insists were made without his knowledge or consent:

I agreed that a portion of the funds paid to Loeb could, in the future, be used for political purposes if a broad-based political committee, consisting of other donors and independent of STOP, were established to oppose the effort to build an arena in Sacramento. It was never my desire or intent to either directly fund signature gathering or to be the primary financial sponsor of the opposition’s efforts…

Without my knowledge or consent, Loeb & Loeb advanced $80,000 to GoCo consulting to collect signatures to qualify an initiative that would require a public vote on a new arena. At this time, a broad-based political committee had not yet been established, and I neither directed nor authorized Loeb & Loeb to make this expenditure on my behalf.

So Hansen did give money to his lawyers to give to the referendum campaign, he just didn’t tell them to hand it over yet. Hansen also claims he didn’t know about the donation himself until the public uproar began over where the money had come from, and he promptly stepped up to report it afterwards. And he intends to “take steps to prevent any signatures collected by GoCo from being submitted to the opposition.”

How much of this is true, there’s no way of knowing — though it’s worth noting that his initial defense, that he got “caught up in the heat of battle,” doesn’t completely jibe with this new explanation. But clearly Hansen is scrambling to do damage control, either to make up for his lawyers’ screwup, his own, or both. Now he just has to hope that David Stern is listening.

Chris Hansen would’ve gotten away with it too, if it wasn’t for those meddling kids

After days of speculation over who the mystery funder was who’d given tens of thousands of dollars to the campaign to hold a public vote on the Sacramento Kings arena deal — the conduit for the donation was the law firm of the Maloof brothers, ex-owners of the Kings — late on Friday the mask was pulled off to reveal … would-be Seattle NBA owner Chris Hansen?!? Ruh?

Amid a lawsuit and a state investigation, Hansen and an Orange County political action committee filed documents revealing Hansen contributed $100,000 to the petition drive on June 21 – a month after the NBA board of governors vetoed his plan to buy the Kings and move them to Seattle.

Hansen apologized for the donation on Friday and said he wouldn’t give the anti-arena effort any more money. But the revelation seemed likely to damage the petition drive – and Hansen’s own efforts to bring the NBA back to Seattle.

Or as Deadspin put it more succinctly:

So it turns out that the guy who tried to buy the Kings and move them to Seattle is kind of a giant scumbag. Huh, how about that.

Hansen immediately said that he regretted the donation, explaining that he got “caught up in the heat of battle.” (Forgetting to file his campaign finance paperwork until threatened with a lawsuit was, no doubt, part of the fog of war.) But that’s not likely to help mend bridges with the NBA, which had previously said nice things about Hansen and hinted at him eventually getting an expansion team, but which is now almost certainly going to take him off their Christmas card list now that he’s funding opponents to their hard-won $334 million arena-subsidy deal. And some Seattle columnists (okay, one Seattle columnist, but one who’d previously praised Hansen’s arena deal) are saying that that city’s council should take a hard look at whether it wants to be partners on an arena plan with a guy who resorts to secret campaign donations.

It’s a huge, huge shooting-yourself-in-the-foot moment for Hansen. And it makes me wonder whether it’s possible that there’s another explanation for how Hansen expected to spend $400 million on a new arena plus $521 million for majority ownership of the team plus a league relocation fee: Maybe the guy’s just nuts. Or, more specifically, maybe in the “heat of battle” he loses track of sensible financial decisions the same way he loses track of campaign finance laws, and can’t resist throwing in a few more million for the chance of walking away with the prize.

Yes, Hansen is a successful investment titan, but it’s not like those folks are immune to doing dumb things based on not much more than hoping everything will turn out okay. That his Seattle NBA plan came down to similar wishcasting is a possibility, anyway, not that at this point we’re likely to find out — at least, not unless he sends David Stern one hell of a fruitcake.

Last-minute Coyotes subsidy vote gets last-minute Seattle buyer move threat

The Glendale city council is set to meet tonight to discuss the proposed $15 million a year Phoenix Coyotes lease subsidy, and just in the nick of time, here comes a move threat to ensure that the council members keep their heads focused in the right place, by NHL standards. Chris Daniels of KING 5 TV reports that two “New York based investors,” Ray Bartoszek and Anthony Lanza, met with Seattle officials two weeks ago to discuss buying the Coyotes and moving them to Seattle:

McGinn said they were serious enough, that it led to a conversation between him and NHL Commissioner Bettman.

“I let him know of the situation here, and that we were supportive of bringing the NHL to Seattle,” McGinn said. “We have Key Arena, so we talked about the potential of them being in Key Arena, while we continue to work on a new arena plan.”

NHL Deputy Commissioner Bill Daly would not characterize the discussions between McGinn and Bettman, and told KING5 the conversation was “like any number of conversations the Commissioner has all the time with a variety of people.”

So who exactly are these guys? Bartoszek is a billionaire former oil trader who tried and failed to buy the New York Mets a couple of years ago, and ended up with a minority share of the New York Yankees instead. Lanza, according to his official bio, “has varied experience in the security industry, both domestically and internationally, as a project consultant in business development for both 3DRS International, NSM Surveillance, and Spear International,” which sure sounds like a long-winded way of saying “doesn’t actually have a job.” His dad used to be COO of Lockheed Martin, though, which I guess gives him some cred as a Seattle local, if you squint hard enough.

Whether this pair is actually serious about buying the Coyotes and moving them to Seattle, who knows? The team would have to play at Key Arena at least at first, until Ch

ris Hansen’s SoDo arena is completed; and since that can’t begin construction until Seattle has an NBA franchise, something that’s likely at least a couple of years away, you’re talking about at least four or five years of an NHL team playing in an arena that would have to have hockey shoehorned into a basketball setting, leading to seating plans along the lines of what the New York Islanders will be dealing with in Brooklyn. Which, admittedly, might still be preferable to playing before empty houses in Glendale, but it’s still an awfully big gamble for a pair of sports novices — not to mention for the NHL, which might be better off getting a bidding war going between Seattle, Quebec, and maybe some other cities if it decides to finally move the Coyotes out of Arizona.

For now, though, Bettman and Daly can remain noncommittal, leaving the Glendale city council to imagine the moving vans instantly pulling up should they reject the Coyotes’ lease subsidy demands. According to the Phoenix Business Journal, there are three members of the council solidly in favor of giving the Coyotes what they want, and three solidly opposed — leaving the deciding vote in the hands of Glendale Mayor Jerry Weiers, old “Glendale is not your cash register” himself.

The PBJ notes that as a state legislator, Weiers sponsored a short-lived bill to kick back state sales tax revenue to local governments to be used for sports subsidies. That’s certainly the kind of thing that elected officials might consider to be “Coyotes-related revenue streams” — no, not every dollar spent within two miles of an arena is because of the Coyotes, but they can pretend it is — but it’s also solidly in the jurisdiction of the state legislature, not Glendale, so it would require kicking this whole Coyotes mess into the state’s lap. Which I suppose would be one way of Weiers getting out of this pickle: Hey, I came up with a plan to keep the Coyotes, it was up to the stupid state to approve it!

We may get some hints of where all this is headed at the council meeting tonight. I doesn’t look to me like there’ll be any streaming video of the meeting; if I’m wrong about this, I’m sure I’ll be quickly corrected in comments.

NBA to Sacramento: Build an arena, or we could still move the Kings

Vivek Ranadive completed his purchase of the Sacramento Kings on Friday, and the NBA celebrated as only it knows how — by threatening to move the Kings anyway if a new arena isn’t built within the next four years:

Hours after Vivek Ranadive and his partners completed the record-setting purchase of the franchise from the Maloof family, NBA Commissioner David Stern revealed that the Ranadive group must meet “a series of benchmarks” for a new arena – or risk losing the Kings to another city.

If deadlines are blown, Stern told The Sacramento Bee, the NBA has the option of pulling the Kings out of Sacramento and arranging for the team’s sale to new owners.

It’s a bit of a bizarre notion, approving the sale of a team to new owners but reserving the right to unsell it if an arena deal doesn’t go through, but as we’ve been over time and time again, the NBA controls its franchises, and it can pretty much do what it wants with them. (Especially if Ranadive agreed to it in the sale agreement.) You have to hand it to David Stern & Co.: They’ve managed to play this whole Seattle-Sacramento battle for maximum leverage and profit, with the likelihood now that they’ll get two new arenas plus two sky-high franchise sales out of the bargain. (There’s already rumors of Seattle getting an expansion franchise by 2015, along with … Omaha?) It’s almost like they’re professionals at this!
What are the chances of the arena deal falling apart? Well, the campaign for a voter referendum on the financing plan has kicked into gear, though it faces an uphill battle getting the 33,000 needed signatures, and then of course Sacramento voters would need to vote to rescind the arena deal, too. While knowing that the NBA would likely yank their team if they do so.
And anyway, an arena will be great for Sacramento, because tech jobs! Because Ranadive runs a tech company, see, and his partner Paul Jacobs has promised to “bring as much technology as we can”! And that turns into jobs because, because… well, even the Sacramento Bee says that “what the group’s tech orientation means for Sacramento is uncertain,” but c’mon, tech jobs!

NBA votes 22-8 to keep Kings in Sacramento, will figure out who owns them later

David Stern is talking right now about the NBA’s decision on the fate of the Sacramento Kings, which you could be watching here right now if the stream hadn’t just crashed. Instead, let’s let Chris Daniels of KING-TV take it away:

So it sounds like: The NBA rejected the move, as has been long expected, and is effectively rejecting (for now, anyway) the sale of the team, too. And because the Maloofs don’t want to sell to the Sacramento buyers, it means nobody’s buying the team for the moment.

Basically, then, the “everybody is unhappy” scenario from this post. There will be much, much more once the Stern press conference is over, I’m sure — and then probably much, much more tomorrow, and then even more next week and the week after that and OH GOD I’M NEVER GOING TO BE ABLE TO STOP WRITING ABOUT THE SACRAMENTO KINGS EVER EVER AM I?

[UPDATE: The press conference is now streaming properly at KIRO-TV's site.]

Your last-minute Kings-to-Seattle NBA vote rumors

Okay, here we go: Today is the day that the NBA owners are set to meet and vote (unless they decide to put it off again) on whether to approve the Sacramento Kings‘ relocation to Seattle, and on whether to approve the sale of the Kings to Seattle-area owners Chris Hansen and Steve Ballmer. The last 24 hours has seen a flurry of unnamed-source-based reporting on what’s likely to happen today:

  • Aaron Bruski of NBCSports.com wrote a long article on how Microsoft CEO Ballmer is alienating NBA owners with his “scorched earth policy,” and needs to back off or risk being shut out of not only the Kings talks but any possible future expansion plans.
  • Tim Montemayor of San Francisco radio station KGO says that it’s not Ballmer that’s the problem, but rather his and Hansen’s alliance with the Maloof brothers who currently own the Kings — or as Montemayor called them, “that family” — that’s jeopardizing their bid, because the NBA so hates the Maloofs. But Montemayor says that starting this week, Hansen and Ballmer have begun to heed that warning, and could instead accept the offer of an expansion franchise starting play in 2014-15 if they back off of trying to buy the Kings.

This is all rumors at this point, mind you, but it does point to a potential face-saving solution for all involved: Sacramento gets to keep the Kings, Hansen and Ballmer get their shot at a Seattle team sooner than later, and the NBA gets both of its new arenas. Okay, not all involved: The Maloofs would still be out $65 million. But it’s pretty apparent that nobody is in the Maloofs’ corner on this one, and their chances of winning a lawsuit against the NBA would be pretty slim.

There would still be two potential major holdups: First off, the Sacramento arena deal is getting shakier by the minute, with one group announcing yesterday that they’d launch a petition campaign for a referendum to kill the city’s arena funding, and another suing the city on the grounds that it illegally undervalued the public cost of the project when it presented the plan. If either of these measures succeed in tripping up the project — or if the city finance plan just falls apart before the Sacramento council can approve it, which still seems very possible — then the whole NBA plan to keep the team in Sacramento likely goes with it, though I suppose there would be plenty of time to turn around and tell Hansen and Ballmer, “Screw an expansion franchise, you can have the Kings after all for 2014.”

Problem #2, meanwhile, is the Maloofs, who don’t actually have to sell the team at all if they don’t wanna. So we could conceivably come out of today with the NBA having ratified the status quo: The Maloofs still in charge of the Kings, Sacramento still proposing a shaky arena plan and some new owners who the Maloofs don’t want to sell to, and Hansen and Ballmer waiting impatiently on the outside looking in. That rock-paper-scissors option is looking better and better…

Hansen ups Kings bid by $48m, wristwatch, keys to car

The Sacramento Kings bidding war escalated again on Friday, when would-be Seattle owner Chris Hansen increased his bid for 65% of the team from $358 to $406 million, making for a total valuation of the franchise at $625 million. Oh, and he also matched the would-be Sacramento owners group’s offer to forgo any revenue sharing dollars that the team might be eligible for. [UPDATE: According to ESPN "sources," he also also offered to pay a $115 million relocation fee to the NBA if his bid is accepted.]

For those scoring at home, Vivek Ranadive’s Sacramento bid is for $341 million, which would put the total value of the team at $525 million. And for those who have trouble with math, that puts Hansen’s valuation of the team at $100 million more than Ranadive’s — not to mention more than double what Forbes estimated this team was worth just a little over a year ago, before this bidding war started.

I’ve covered elsewhere why I don’t think Hansen stands much chance of making his money back on this deal (especially when you factor in his likely arena costs), but either he knows something I don’t know, or this is just turning into one of those eBay auctions where everybody tries to one-up each other in the closing seconds. But unlike eBay, there could be no winner here: First the NBA has to decide on whether to approve Hansen’s purchase offer, then the Maloofs — remember the Maloofs? — have to decide whether, if Hansen is rejected, they’ll accept $65 million less from Ranadive’s group for their majority share of the team, or whether if Hansen’s bid is rejected they’ll just say “Screw it, we’ll keep the team for now,” as they’ve apparently vowed to do.

And if that happens, then … beats me. There’s been all sorts of speculation about lawsuits, but Hansen would be firebombing his relationship with the NBA if he did so, on the off chance that he could win an argument that his right to buy the Maloofs’ team trumps the NBA’s right to approve its franchise owners. And if the Maloofs were to sue the NBA for refusing to approve their high bidder, they’d be in for potentially even rougher sledding, since NBA teams all agree not to sue the league, and the Maloofs knew the rules about conditions for selling your team when they went into this business.

What Hansen and the Maloofs alike are clearly hoping at this point is that the NBA will decide that the easiest way out is to just let Hansen buy the damn team, and then figure out later whether it’ll stay in Sacramento or move to Seattle, based on how Sacramento’s arena plans work out. It’s not clear whether the NBA is ready to go that route, but if money talks, Hansen just gave the other 29 NBA owners 48 million more reasons to listen.

NBA to Sacramento Kings buyers: Show us your Benjamins

The NBA owners are set to vote in Dallas next Wednesday on what the heck to do with the Sacramento Kings, and if you’ve been following closely, you’ll know that it’s actually two votes: One on whether to approve the team’s relocation to Seattle, and one on whether to approve the Maloof brothers’ sale of the team to Seattle-area buyers Chris Hansen and Steve Ballmer. And while the league’s relocation committee voted unanimously last week to recommend rejecting the move to Seattle, its finance committee still hasn’t weighed in with a recommendation on the actual sale.

And even after the city of Sacramento came up with $334 million worth of cash and other goodies toward an arena, and the would-be Sacramento buyers agreed to give up any future revenue-sharing money, that doesn’t mean the NBA is going to stop leaning on Vivek Ranadive and his Sacramento partners to sweeten their offer:

With an NBA vote on the future of the Sacramento Kings just a week away, a source says the league is encouraging a Sacramento business group to put 100 percent of its $341 million team purchase offer into an escrow account in hopes of persuading the Maloof family, team owners, to sign a deal with the local group.

A league source familiar with the situation said NBA officials are suggesting the private investment group led by Silicon Valley entrepreneur Vivek Ranadive make the move to prove it has the wherewithal to sign what has been described as a back-up offer to purchase the team.

What appears to be going on here, if the Sacramento Bee’s unnamed sources can be believed and I’m reading between the lines properly, is that the NBA really really wants the Maloofs to withdraw their offer to sell the team to Hansen and Ballmer, instead sell to Ranadive et al., thus absolving the league from having to pick one buyer over the other. And the best way to make the Maloofs happy, apparently, is to present them with the purchase price in the form of briefcases full of cash.

If Ranadive’s group balks at putting the full amount in escrow, then things get interesting. Do the Maloofs threaten to make things ugly for the NBA if their sale is rejected? Do Hansen and Ballmer? Does the NBA tell the Seattle group, “Fine, go ahead and buy the team, but we’re not going to let you move it?”, thus setting up Sonicsgate: California? Does the league just put off voting on the sale — because hey, can’t do anything while the finance committee is still thinking about it, right? — until after next week, while voting on the relocation request? Are you getting yet why the NBA is hoping the Ranadive group will just cut a deal with the Maloofs and save them all this agita?

Further complicating matters: The relocation vote is a straight majority, while a sale requires a three-quarters supermajority for approval. Which seems like it likely won’t be an issue, given that the unanimous relocation committee vote probably indicates that commissioner David Stern is insisting on reaching league consensus before any official votes are taken. But it does raise at least the possibility of even more craziness before this whole long saga draws to a close.

Hansen mulls buying Kings anyway, keeping them in Sacramento — for now

Just when you thought the Sacramento Kings saga couldn’t get any more wacky, yesterday Reuters issued an anonymously sourced report that, if true, indicates that jilted buyer Chris Hansen may be about to open a whole new can of crazy-ass:

The idea, this source said, would be for Hansen to persuade NBA owners to support his efforts to buy the team, even if they do not immediately allow him to move it.

Under the NBA’s rules, a decision to relocate a team is separate from a decision to sell a team. So under this scenario, the league could support its committee’s recommendation against moving the Kings to Seattle, while still supporting the Hansen group’s efforts to purchase it.

The league could require Hansen to work in good faith with the city of Sacramento to try to keep the team there, setting a deadline for the construction of a new arena and working to keep attendance high at the games.

But if the arena wasn’t built according to the schedule, or if attendance slipped at the games, Hansen could apply again for permission to move the team – and it could be more likely to be granted, this source said.

This gambit should be familiar to Seattle basketball fans, as it’s essentially the Clay Bennett Maneuver: Buy a team, promise a “good faith” effort to keep it in town, then when arena negotiations stall, hightail it out of town to where you really wanted to be in the first place.

USC sports business professor David Carter tells Reuters that this could be a graceful way for the NBA to avoid the public uproar over moving a team, while still getting into the Seattle market once the Sacramento arena deal hits a snag. Which sort of makes sense — except that when the entire plan is spelled out in the newspaper before it’s even started, then you end up facing public uproar over calculatingly playing a city that you don’t intend to stay in just in order to duck a public uproar. Kingsgate, anyone?

Also, Hansen would be running the risk that Sacramento would call his bluff and actually build an arena, at which point he’d be stuck with a team in a city he doesn’t want to own one in. (Though he works in San Francisco, so it’s not like it’s that far a commute.) I suppose at that point he could always sell the team and ask his new NBA buddies for a different one that he could put in Seattle. Because that’s how it works in the sports biz.

Cue the Bucks-to-Seattle rumors in three, two… oh wait, they’ve already started

Yesterday morning in my weekly appearance on KUCI in Irvine (Have I mentioned lately that I talk stadiums on KUCI every Tuesday morning at 8 am? Or that you can listen live here? Well, I have now), host Heather McCoy asked me what I thought the NBA’s ruling that the Sacramento Kings won’t move to Seattle would mean for the Milwaukee Bucks‘ arena campaign. I answered that I would be very surprised if someone, somewhere wasn’t already writing a “Now will the Bucks move to Seattle if they can’t get a new arena?” column.

And sure enough, five hours later:

The news that a group from Seattle has failed — for now — in its effort to lure the NBA’s Sacramento Kings raises the stakes for Milwaukee leaders hoping to retain the Milwaukee Bucks, Mayor Tom Barrett told The Business Journal Tuesday…

“We need to be pro-active and get the Bucks to stay here,” Barrett told me.

There actually aren’t any quotes from Barrett saying that the Bucks might move to Seattle, making it appear that Milwaukee Business Journal reporter Rich Kirchen simply asked the mayor, “Does this mean we really really have to build an arena now?” and the mayor responded with the expected “You betcha.” Which is pretty much what he’s been saying all along, but it makes for a cheap blog post, even there’s no actual news in it.

In any event, this helps make clear why Bucks owner Herb Kohl, for one, might want to vote against moving the Kings. Maintaining Seattle as a bogeyman promises to make him very, very rich. Sorry, I mean richer.