Kings to stay in Sacramento after Board of Governors reject relocation to Seattle

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But the Kings’ transformation extends way beyond the court. Every piece of the franchise has been in a holding pattern since 2008 (in some aspects, even longer). In 2008-09, the Kings won just 19 games ... and had ticket prices in the top five in the league. After some subsequent changes on the business side of the franchise, the Kings still have top-ten ticket prices for a team with the second-longest playoff drought in the league. And while Kings employees have done the best job they can, it has been hard. There’s no money and no interest from the bosses to make the fan experience the best it can possibly be. The Maloofs lost interest long ago.

It’s weird, too, because a big part of the Maloofs’ beginning in Sacramento was that they put a ton of effort into improving the fan experience, something that has become increasingly important with the advent of regional sports networks that carry every single game and high-def TVs. The Maloofs saw ways to give their fans more value. As the team improved rapidly, peaking in 2002 with a berth in the Western Conference Finals, the Maloofs began to milk that extra value with higher ticket prices. When the steam ran out of the team, those tickets stayed expensive. When the Maloofs’ fortune went up in smoke due to the bursting of the real estate bubble and the banking crisis, fan service became an afterthought. That’s why attendance fell off a cliff: poor value, poor product, no attempt to fix it.

The Maloof family is reportedly eager to “turn the page” and sell to the local group of investors, and Ranadivé promised “[w]e’ll make sure [the Maloofs] get the exit they deserve.” Ranadivé is prepared to pay $200 million for his stake in the team, and he will serve as a managing partner for the franchise, according to the same Sacramento Bee report. San Diego investors Paul, Jeff and Hal Jacobs would serve as vice chairmen of the franchise on a rotating basis.

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Lawyers for the Maloofs and Ranadivé have been engaged in “serious” discussions over the last few days, including exchanging financial documents, according to a report from the Sacramento Bee.

“I have no doubt we’ll get something done,” Ranadivé told the paper on Wednesday.

A few extended thoughts on the Kings staying in Sacramento:

Of course, the crisis isn’t totally over until the Maloofs hand the keys to the building over to Vivek Ranadivé. Reports suggest it was George Maloof who requested the deal get done in the next 24-48 hours.

The constant in all of this has been Geoff Petrie, who has been running the basketball operation for almost two decades. There have been massive changes across the NBA universe in scouting, player development and cap management during that time, but the Kings have been two beats behind the learning curve for years.

With $41 million committed to nine players, a handful of free agent decisions and another high draft pick on the way, the Kings are standing at the intersection where a rebuilding project can go in either direction, yet they have been aimless while the ownership saga plays out.

The notes don’t tell us anything new -- the Seattle offer was more lucrative, but Sacramento’s was good enough to keep the team -- but it is stunning how Amick was able to piece the notes together.

Sorry, George. The time machine that takes you back to when your family’s businesses were all functioning was not located inside that closet.

“We fully expect to return there one day,” Silver, who will take over for Stern after this season, said of Seattle.

The league wasn’t put off by the aggressive nature of the Seattle groups’ push to land an NBA franchise, and Stern added there were “generalized” talks of expansion in the board of governors meeting. He said there would be “fair dealing” and “consideration” for Seattle as an eventual place for an NBA team, but that wouldn’t be a discussion until after the league finalizes its TV contracts set to expire after the 2015-16 season.

The NBA’s Board of Governors voted against the sale and relocation of the the Sacramento Kings franchise to a Seattle ownership group led by Microsoft CEO Steve Ballmer and hedge fund manager Chris Hansen, David Stern confirmed Wednesday. In order for the franchise to relocate, a majority vote was required, and the outcome was expected.

“We will talk to the Maloofs and seek, in the next 24 to 48 hours, whether we can help facilitate an agreement to be signed between the [prospective Sacramento ownership group led by Vivek Ranadive] and the group for the sale of the franchise in Sacramento,” Stern said in a press conference televised on NBATV.

The supremely distressing Sacramento Kings saga could end, or at least be sent careening toward resolution, on Wednesday. NBA owners are assembled in Dallas to hear from contingents representing Sacramento and Seattle and each other before voting on whether to allow the team to move to Washington state.

A smaller group of owners has already recommended against that request; if the broader Board of Governors agrees, what happens next is anyone’s guess. It appears the owners will vote on an insane plan hatched by the Kings’ owners, the Maloofs, and the prospective Seattle buyer, Chris Hansen, to transfer a smaller portion of the franchise to the latter and all work together on a Sacramento arena.

SB Nation’s Brian Floyd did a great job recapping the confusing twists in the Kings ownership saga since the NBA’s relocation committee recommended the league not approve a sale to the group headed by Ballmer and Chris Hansen. The Seattle group has doubled down on their efforts to bring the squad north, offering to increase their purchase price, offering a higher relocation fee, and negotiating a backup plan with the Maloofs to buy a smaller stake of the team with plans of moving it later rather than immediately.

Floyd speculated that the moves could irritate the NBA’s power brokers, and if Bruski’s reporting is true, it has. The changes in strategy have reportedly been engineered by Ballmer rather than the calmer Hansen. Bruski reports that his decision to try to bring the Kings to Seattle at all costs could hurt the city’s plans of acquiring a team in the future in the likely situation they can’t get the Kings:

If there’s one thing folks in Sacramento and Seattle agree on right now, it’s that the NBA let this get out of hand. The commissioner’s office has assisted Chris Hansen in recent years to plot a path toward bringing the NBA back to Seattle. Rumor says part of the deal to get Steve Ballmer, the Microsoft billionaire, to stand down in 2008 was that the NBA would work closely with Seattle to figure out a long-term solution.

The same has been going on in Sacramento. Since 2007, David Stern has commissioned resources aimed at finding a local arena deal amenable to the Maloofs. They have proven to be a finicky partner. Meanwhile, they have also gone broke and sold off or closed every serious business venture they have other than the Kings. And now, of course, they intend to sell the Kings to Hansen for a very large sum ... only the NBA, still assisting Sacramento, appears to be on the precipice of refusing to allow it on account of Hansen’s stated intention to move the team to Seattle immediately. As that vote approached, Hansen unloaded whatever ammo he thought he had left: the increased bid and the absurd back-up offer that would keep the Maloofs in business with a cash influx from the Seattle guys.

What does it all mean at this point? We’ll do this in question-and-answer format in an effort to parse things down to somewhat digestible portions. Fair warning, though: nothing is clear in this saga and information continues to change quickly.

Why did Hansen up his offer?

The Maloofs have made it clear that they would prefer to sell to the Seattle group led by Chris Hansen and Steve Ballmer. After the NBA relocation committee recommended the Kings stay in Sacramento, the Seattle group increased their offer for the Kings to $406 million, a deal that includes a promise to pay a record-high $116 million relocation fee.

Since the NBA is likely to vote against the move, the Maloofs and the Seattle group cut an alternative deal over the weekend. The Seattle group would pay $125 million for 20 percent of the Kings, and the team would stay in Sacramento for at least one more season while the owners attempted to negotiate a new stadium deal.

Has any longtime owner ever treated a city with such contempt?

Clay Bennett sure wasn’t nice to Seattle after he bought the Sonics in 2006, but he was gone by mid-2008. The Maloofs have owned the Kings in Sacramento since 1999. They’ve cheered with Sacramento, wept with Sacramento, sweat with Sacramento, cursed the skies (and refs) with Sacramento. But they’ve never really loved Sacramento, and tried to leave a few times, beginning in 2006. They saw an exit path in 2011: Relocation to Anaheim was basically a done deal ... until Sacramento stood up and said no.

According to a report from Brian Windhorst of ESPN, the Maloofs have agreed to a new deal with Chris Hansen’s Seattle-based ownership group that would allow them to retain control of the franchise if it stays in Sacramento.

In the deal, Hansen would pay $125 million to become a minority investor, giving the cash-strapped Maloofs the money they need to continue operating the Kings.

Whether this move results in the NBA’s relocation committee reneging on its unanimous recommendation to keep the team in Sacramento remains to be seen. The prospective Sacramento ownership group, led by Vivek Ranadive, has still not finished liquidating its money to put the requested $341 million for 65 percent of the franchise in escrow, according to CSN Bay Area’s Ric Bucher. Hansen has already put $357 million for 65 percent of the franchise in escrow.

Hansen’s move also has multiple potential effects if the league still awards the franchise to the Sacramento group. It could signal to the league that Hansen is serious about acquiring a franchise, so he could be promised an expansion team sooner. If that doesn’t happen, Hansen’s increased bid improves his case in a potential anti-trust lawsuit.

In 2008, the people of Seattle and many allies across the nation screamed as Clay Bennett sandbagged the Emerald City on an arena deal and gained approval to move the SuperSonics to Oklahoma City. David Stern, the commissioner who brought Bennett into the NBA and who ignored (for the most part) the dishonest exit plan the Oklahomans implemented, received a good portion of Seattle’s anger. (I say “for the most part” because he did fine minority partner Aubrey McClendon for an inappropriately honest email about taking the Sonics to OKC ASAP that came out into the public eye.) Stern ripped Seattle and Washington state politicians for their lack of reverence to the NBA and dismissed a last-minute push by Microsoft billionaire Steve Ballmer to keep the Sonics where they’d been for 41 years.

Basically, Stern didn’t give Seattle, particularly its politicians, the benefit of the doubt.

Ranadivé‘s group and the NBA negotiated concessions that, more specifically, would limit the amount of revenue-sharing money received by the team while it remained at Sleep Train Arena, a source told Sports Business Journal. With a plan in place to build a new arena, the Kings’ hopeful future owners told the league that they would stop receiving payments once the team moved into its new home because of increased local revenue.

As Sactown Royalty notes, the agreement could have swayed the relocation committee’s vote.

The Sacramento investor group, led by software executive Vivek Ranadivé, put half of the reported $341 million purchase price in escrow as a down payment toward securing a deal to buy the Kings from the Maloof family. This move follows the positive development of the NBA relocation committee offering its unanimous recommendation to keep the Kings in Sacramento.

The Maloof family still has an agreement in place to sell majority control of the team to a group of Seattle investors led by Chris Hansen, Steve Ballmer and the Nordstrom family. The Seattle group raised its offer to $357 million once Sacramento put together a formidable investment group. The NBA Board of Governors would need to approve the deal between the Maloofs and Hansen’s group, which appears unlikely after the strong recommendation from the relocation committee.

When I was young, I would mute the television, turn up the radio and listen to the smooth sounds of Kevin Calabro on full blast in my room. With my Shawn Kemp jersey on -- or Gary Payton depending on the day -- I’d watch the action unfold on television, listening to my hometown homers while dunking foam balls on a small hoop hanging from my door. This was basketball to me. This will always be basketball to me.

I had Sonics posters all over my wall: The Reign Man. The Glove. Big Smooth. These were my childhood heroes. These were what I knew growing up.

On Monday, a committee of seven NBA team owners voted unanimously to recommend the league reject an application to move the Kings from Sacramento to Seattle next season. The upshot is that if eight of the 23 other owners agree on May 15, the Kings will remain in Sacramento. One assumes at that point Chris Hansen, the man who intended to buy the Kings and move them to the Emerald City, would rescind his purchase agreement and the team would then be sold to Sacramento-based investors. An existing Sacramento arena deal would then be consummated.

According to Matt Yglesias, an economics writer at Slate, this decision was made solely because NBA owners are a greedy cartel and want more public subsidies.

Taylor has had discussions with Hansen’s group, but they would be dead-set on moving the Wolves to Seattle, which is simply not an option for the Wolves’ owner. Taylor did hint Tuesday that there’s major Wolves ownership news coming sometime in the next week.

As for Seattle, they must continue to regroup after the NBA’s Relocation Committee voted to unanimously reject the Kings’ sale to Hansen’s group. An official vote by all the owners still must take place, but it’s unlikely that they would go against the recommendation of the committee. And while Hansen has vowed to fight the NBA’s decision, there may not be much he can do.

In an interview with a local radio host, Seattle mayor Mike McGinn expressed disappointment about the decision but also guarded optimism about the future of the NBA in Seattle (courtesy of Sports Radio Interviews):

While some floated the idea of expansion as a compromise to allow both Seattle and Sacramento to have an NBA franchise, David Stern appeared to have squashed that idea for the time being in a press conference last week.