The Sacramento ownership group led by Vivek Ranadivé promised the NBA that it would limit the acceptance of shared revenue in the short-term and end its status as a revenue-sharing recipient outright should it be awarded the Kings franchise. According to a report from the Sports Business Journal (subscription required), the group privately told the league of their plans before seven NBA owners voted unanimously against relocating the team to Seattle.
New Sacramento Kings owners promised to limit revenue-sharing intake, according to report
The Sacramento-based ownership group made key concessions to help earn support from the NBA in its fight to keep the team from moving to Seattle.
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 Seattle group that has an agreement to buy the team from the Kings’ current ownership, the Maloof family, was hinging its fight for a relocation on having a bigger market. Seemingly, Ranadivé‘s group evened the playing field by offering to pull away from the revenue sharing plan, a likely sign that the Sacramento ownership is all-in on building the Kings’ local financial clout. It also shows the NBA that the franchise would work its way out of being a blackhole for the other teams under the revenue-sharing plan.
“They eliminated the positive impact Seattle would have as a wealthier market on the rest of the NBA,” Marc Ganis, a sports consultant who last year advised on the sale of the New Orleans Pelicans, told the SBJ. “It does go a long way to resolving many of the objections owners could have had.”
This year, the Kings are estimated to take in $18 million of shared revenue under the league’s plan designed to help small-market teams, according to the Sports Business Journal.
The Sacramento ownership group made other concessions to the NBA before the vote of the relocation committee. It devised a construction schedule and also agreed to pay for any overruns on the team’s proposed arena plan.
All of this could be on the backburner for a while, however. All 30 NBA owners must disapprove of the franchise’s move -- a vote is expected next week -- and even if they do that as expected, the Maloof family still has an agreement in place with the Seattle group.
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