It’s not a done deal, but the sale is in process.
An agreement has been reached for the Maloofs to sell controlling interest in the Sacramento Kings to Chris Hansen and Steve Ballmer’s Seattle-based ownership group. While the news might be unsettling for Kings fans, it wasn’t unexpected. When reports first surfaced that the Kings majority owners were finalizing a deal to sell almost two weeks ago, public acknowledgement of an agreement was believed to be the next move.
Now it’s up to Sacramento Mayor Kevin Johnson to lead one final comeback. Johnson has arranged for a press conference this afternoon at city hall to announce further details on his plans to save the Kings.
The mayor and city are playing catch-up, but they’re used to being the underdog. Around this time two years ago, the mayor looked like a jilted lover, fresh off a breakup when news of a proposed move to Southern California was confirmed by the league.
But the initial shock didn’t stir his resolve then and it’s not doing so now.
“We’ve been here before,” Johnson said boldly at city hall during his first public comments regarding Seattle’s interest in the Kings. “We’ve been here when it came to Anaheim and we know how close they were to moving to Anaheim. We’ve been here before when it comes to Virginia Beach. We’ve all heard those rumors swirling around.
“And now there’s one in Seattle,” he added. “We have said all along that we should be in control of our own destiny and I think this gives us tremendous opportunity to do that.”
The team is officially up for grabs. So what might the city have working in its favor that could possibly help in its fight to keep the Kings?
KJ’s influence
No mayor in Sacramento history is better equipped for this battle than Johnson.
His NBA career, which included three All-Star appearances, the Most Improved Player award, four All-NBA Second Team nods and one All-NBA Third Team appearance, speaks for itself. It’s also given him a direct line of communication with David Stern. If not for his background as a professional basketball player and personal relationship with the NBA commissioner, the Kings would have likely become the Anaheim Royals in 2011.
“Who else in the entire world could have flown back to New York, gotten an audience with the NBA and made a pitch that hey, we really need that team?” Sacramento Vice Mayor Angelique Ashby said of Johnson in the documentary film “Small Market, Big Heart”.
His ability to raise money for causes can’t be understated as well. By the time his re-election campaign rolled around last June, the point-guard-turned-politician had collected approximately $2.1 million in donations over the previous four years. Some of the heavy hitters who’ve made contributions to Johnson’s political efforts include TV personality Dr. Mehmet Oz and media mogul Rupert Murdoch according to the Sacramento Bee.
With all the qualifications that make him the perfect fit for this particular fight, does Johnson feel like he was born for this moment?
“I’m just happy that I’m mayor at this particular time,” Johnson said during halftime of last Wednesday’s Kings/Wizards game. “I really am – as a mayor who played in the NBA.”
AEG’s unwavering pledge
The proposed operator of a new entertainment and sports complex hasn’t changed its stance on Sacramento. During a presentation of the NHL’s Stanley Cup, CEO Tim Leiweke told reporters last week inside the state capitol that AEG remains interested in the arena deal agreed to last year in Orlando. That contribution, close to $60 million, was one of the largest equity-investments the entertainment company has devoted to any project.
Ever.
“That is the second largest commitment they’ve made to any city in the United States and one of their top five or six in the world,” said Johnson in a press conference with Leiweke last March. “They are betting on Sacramento. They believe in our potential, they believe in our market. And we have a tremendous opportunity to do something really special.”
AEG’s involvement matters from a league perspective, too. The arena and concert giant has strong ties to the NBA and Leiweke claims to have an exceptional relationship with Stern. The AEG boss said that the commissioner reached out to him recently to revisit Sacramento’s arena conundrum.
“To the commissioner’s credit, I don’t think he ever forgot about Sacramento,” Leiweke told reporters last week. “I think this has always been on his mind.”
Also, nine teams in the NBA play in AEG-ran facilities, including small-market squads like the Minnesota Timberwolves, San Antonio Spurs and Portland Trail Blazers. Just last week, the NBA hosted a regular season match-up between the New York Knicks and Detroit Pistons in London. The venue they played in? The O2 Arena, which is operated by AEG.
“We’re like members of the same family,” Stern said last week of the arena developer. “They treat us well in their venues all over the world, and I want to say thank you to them.”
AEG’s sway with the NBA could come in handy in Johnson and Sacramento’s efforts.
The NBA’s track record of commitment to Sacramento
When Measures Q & R failed in 2006, the NBA stepped in on behalf of the Maloofs to handle all arena-related business.
“At the request of the Maloof family, we’ve determined that the league office will direct future efforts with respect to the possibility of their being a new multipurpose arena for Sacramento, which among other things would be a home for the Kings and the Monarchs,” said commissioner Stern a week after the tax proposal failed to pass seven years ago.
Following the death of the three-way land swap deal in 2010, the NBA seemed done with Sacramento. League representative John Moag told the Sacramento Bee that the association had “ceased its activities on the Sacramento arena front.”
But in less than a year, the league was back at it, trying to make something viable work in the capital city. When the NBA board of governors recommended the Maloofs stay in Sacramento following their flirtation with Anaheim, Stern sent nine officials from the league office to work directly with the Kings. Among those sent were Chris Granger, the NBA’s Executive Vice President of Team Marketing and Business Operations, and Brian McIntyre, Senior Communications Advisor to the Commissioner.
“In the interim we are going to provide whatever support we can where they may feel there are shortages in certain departments,” Stern said in a conference call following the Maloofs’ decision to bypass relocation in 2011. “And then, through our team, we will provide any additional support by way of boots on the ground, consultancy, or other expertise. We are thoroughly committed to this year in Sacramento.”
When the city put forth major time and energy to broker last year’s arena deal, they negotiated its terms with the NBA, not the Maloofs. The Kings owners had seemingly turned over all bargaining responsibilities to the league.
“Obviously, we’re leaving that up to the mayor and the city and the NBA,” Gavin Maloof said on Kings Media Day in 2011. “But the NBA is keeping us apprised of what’s going on.”
“I’ll be as clear as I can that we know that the NBA had the power and authority to represent them,” Johnson said after the deal fell apart at last spring’s board of governors meetings in New York. “As they had been doing for many, many months.”
Stern and the league’s first-hand knowledge of what transpired last year may come into play during the decision-making process. Johnson could use that to his benefit when he pleads Sacramento’s case to the league’s 30 owners.
100 percent market share
When it comes to overall market size, Seattle has the advantage. In Nielsen’s TV market rankings for the 2012-13 season, the Seattle-Tacoma area is ranked 12th and boasts approximately 1.8-million households to its credit. But that benefit does shrink a bit when taking into account that Seattle already has three major league teams.
Sacramento, meanwhile, is eight spots below Seattle in the DMA rankings. As the 20th largest TV market in the country, the capital city along with the Stockton and Modesto areas combine to make up 1.4-million households. But consider this: Sacramento is one of just two NBA cities in Nielsen’s top 20 that have 100 percent market share. Outside of Sacramento, only Orlando, ranked 19th, can make such a claim.
“If you look at how other cities have NBA teams, most of them have more than one professional team,” said Johnson in his press conference at city hall almost two weeks ago. “In Sacramento, there’s one professional major league team and it’s the Sacramento Kings.”
It is a striking feature that Sacramento has in its aresenal. But is it enough the trump Seattle’s overwhelming advantage in wealth? The Seattle region has eight companies ranked in the Fortune 500. Among them are Microsoft and Nordstrom, who have major players that are part of Chris Hansen’s bid to purchase the Kings.
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