Wednesday, April 3, 2013
NEW YORK — In a Manhattan hotel today, the months-long battle over the fate of the Sacramento Kings will turn into a daylong debate.
It looms as the most critical date yet in this saga. Representatives of a Seattle group hoping to buy the Kings and move them to Seattle and a Sacramento contingent attempting to keep the team there will take turns making their cases to a combined NBA relocation and finance committee.
Each side will present its plan, and likely poke holes in the other city’s efforts. The relocation/finance committee will talk afterward, then send a recommendation to the NBA’s Board of Governors. The board will cast a final vote on the matter when it meets in New York April 18-19.
“This is one of the biggest days of my life and a seminal moment for our city,” wrote Chris Hansen, who will lead the Seattle contingent, in a note on sonicsarena.com Tuesday afternoon.
Hansen also wrote that 44,000 Sonics fans put their names on a priority ticket waitlist established three weeks ago, including 32,000 in the first 24 hours. He said 268 put their names on a list for suites, and 983 businesses expressed interest in sponsorship opportunities.
Those figures will be part of Seattle’s presentation by a group that will include Microsoft CEO Steve Ballmer, mayor Mike McGinn and King County executive Dow Constantine.
“This is indeed a fairly important presentation,” McGinn said Tuesday in New York.
Sacramento’s presentation will be led by Mayor Kevin Johnson as well as several members of the ownership group he has assembled in an attempt to keep the team. The Kings’ franchise will be represented by members of the current controlling owners, the Maloof family.
The Maloofs reached a deal to sell the team to the Hansen/Ballmer group in January. Sales of NBA teams, however, must be approved by the NBA Board of Governors. And since news of the sale, Johnson has led a feverish attempt to assemble an ownership group and arena plan, hoping to convince the NBA to disallow the sale of the Kings and force them to stay in Sacramento.
The two committees that will hear the presentations were merged for the purposes of this topic because it involves both a sale and a request for relocation (sales require 75 percent owner approval, relocation 50 percent).
Among the members of the committee are Clay Bennett, who bought the Sonics in 2006 and moved them to Oklahoma City in 2008. Bennett, in fact, is head of the relocation committee. But the fact the committees have been merged, sources said, lessens Bennett’s role.
Michael McCann, a legal analyst for NBA-TV, said the NBA is not like the NFL, where powerful individual owners can often step in and sway a decision. Instead, “the NBA really is run through David Stern.” McCann said if history is any guide, Stern will try to build a consensus.
Hansen’s presentation is expected to include a comparison of the arena deals of the cities, emphasizing that Seattle’s is further along. Hansen and city and county officials pieced together a $490 million arena deal last fall, including a $290 million contribution from Hansen.
Hansen also is expected to sell the fact that Seattle is a larger TV market (12th to Sacramento’s 20th) and emphasize the prospect for a lucrative regional cable television package. The NBA’s national TV deals expire following the 2015-16 season.
“I think that would be a big deal,” McCann said of the TV market advantage for Seattle. “The NBA wants to see teams able to enter into as lucrative as possible television contracts because that also puts other teams in a situation where they should be able to get more in their local TV deals.”
Another Seattle selling point is its larger corporate base, including eight Fortune 500 companies. There are none in Sacramento.
Constantine said he thinks the proposal Seattle will present is “very difficult to argue with ... there are a lot of things going in our favor.”
A hearing in the lawsuit arguing that the arena deal violates Seattle Initiative 91 is set for April 12. That suit asks the court to invalidate the agreement with Hansen to build a new arena with up to $200 million in public funds because the deal doesn’t ensure an adequate financial return to the city, as required by the initiative.
Another legal challenge was rejected in February, but lawyers for the longshore workers union have filed an appeal and continue to argue that an environmental review of the Sodo site should have been completed before the arena agreements were signed.
The Longshore workers have argued that the Sodo location will add to congestion and threaten operations at nearby Port of Seattle shipping terminals. Seattle attorney Peter Goldman, who represents the longshore workers, said the two legal challenges must be considered by the NBA in weighing the strength of Seattle’s arena deal.
“The issues raised by these lawsuits contrast markedly with what’s being said in New York right now about the Sodo arena deal being in the bag,” Goldman said.
McGinn and Constantine said they don’t see the lawsuit or the appeal by the longshore workers as insurmountable problems.
Sacramento’s pitch might focus on loyalty and emotion. Johnson has said repeatedly that the city has done everything it has been asked to do by the NBA and that it would be “unprecedented” for the NBA not to reward the city for its efforts.
Also on Sacramento’s side could be the fact that its arena proposal features more public financing — an estimated $258 million of its $447 million total. The NBA likes the precedent of owners getting as much help as possible for arenas, McCann said.
Sacramento also is expected to unveil a new bid for the team. An offer made in March was deemed by Stern not to be worthy of consideration.
McCann said the process could help Seattle. While the owners might be comparing the cities, they will technically vote on just the issues of approving the sale of the team to the Hansen group and its relocation to Seattle.
“The board is voting on one offer, which has been accepted by the Maloofs, and it’s the Hansen offer,” McCann said. “I think that can be an underrated point in this. They have to reject the Hansen offer to get to the point where the Maloofs will consider an alternative offer. And then it is on what grounds do they reject the Hansen and Ballmer offer?”
The NBA rarely disapproves sales. One notable exception came in 1994 when the NBA denied a sale of the Minnesota Timberwolves to a group that was proposing to move the team to New Orleans. Then, however, there were concerns about the financial backing of the ownership group (which proved well-founded when the group declared bankruptcy a year later).
The fact each side appears willing to pay the most ever for an NBA team — that has a 27-47 record — has likely caught the league off-guard, McCann said.
“I think if they were honest, they would say they are a bit surprised there is so much money going toward the Kings,” he said.
McCann said he thinks there could be discussion of expansion coming from these meetings, though Stern has insisted that’s not an option.