Sacramento Kings' Relocation Saga Bares NBA's Pretzel Logic

LAS VEGAS - OCTOBER 13: (L-R) Brothers George Maloof Gavin Maloof and Joe Maloof watch a preseason game between the Sacramento Kings and the Los Angeles Lakers at the Thomas & Mack Center October 13 2010 in Las Vegas Nevada. The Lakers won 98-95. NOTE TO USER: User expressly acknowledges and agrees that by downloading and/or using this Photograph user is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Ethan Miller/Getty Images)

The Sacramento Kings are a step closer to an Anaheim relocation after the city approved $75 million in loans to lure the NBA to the Honda Center, which for 18 years has had just one major tenant, the NHL's Anaheim Ducks. It's the latest example of the Lord of the Flies atmosphere that pits American cities against one another like starving wolves desperate for pro sports.

No one blamed Oklahoma City for working hard to lure the Sonics to town, because that's the way this game is played. OKC taxpayers agreed to build the Ford Center before Clay Bennett pulled a dosie-doe on Seattle. That's the new cost of doing business for small-to-medium markets: the fans pay for the gym so that the fans can pay for the product. It's double-billing as standard practice, and given the financial stakes involved -- where NBA franchise owners and the players earn way more benefit than the city where the teams are located -- it's quite backwards.

Basically, cities throw money at the NBA for the right to throw more money at the NBA for 20-30 years. It speaks to both the vitality of the NBA and our wacky priorities.

But there's a special twist in the Kings' case that bares investigation. The Kings are leaving Sacramento because that market -- one that's hosted the NBA for 26 years now -- met a perfect storm of fail over the past few seasons. Sacramento was hit harder than most regions by the housing bust and economic implosion; the team butchered its rebuild following the end of the Chris Webber/Vlade Divac era; the team failed to adjust ticket prices down to a new losing reality; fortune (or a lack thereof) left the Kings without a marketable young star in the vein of Kevin Durant or Derrick Rose; city officials preceding current mayor Kevin Johnson were unable to provide leadership on campaigns to build a new arena in town; the Maloofs shot themselves in the public relations foot repeatedly. Could any market survive all that?

Sacramento can't, apparently, and so the Maloofs are packing for The O.C. Only one man stands in their way: Jerry Buss, owner of the (hated) Los Angeles Lakers.

Buss is reportedly dead set against a third team in the L.A. area; not only is he worried the Kings (or Royals, as it were) would draw some Orange County eyeballs away from the Lakers, but there's apparently a clause in his team's new contract with Time Warner that would cut the franchise's TV revenue by 10 percent. The deal has been reported to be worth $3 billion over 20 years (though Time Warner has disputed that figure); that's a lot of money to give up. Buss isn't a fool, and he's going to do what he can to either prevent the relocation or extract a pound of flesh from the Maloofs to make up some of the difference.

But he's just one vote, and he needs 15 more to stop the move or approve a debilitating relocation fee. Donald Sterling (Clippers) and Joe Lacob (Warriors) are reportedly against the relocation, and you can expect a few more big-market owners (like Bulls' Jerry Reinsdorf, possibly) to consider Buss' case that this market encroachment sets bad precedent. But 16 votes to stop it? That's a longshot. The most likely resolution is a hefty relocation fee (upward of $50 million) and overwhelming majority support for the move.

Think about that little bit of pretzel logic*. The Kings, unable to survive in a small market during down days, cash in with a deal to move to a huge market, extracting revenue from a big-market power, the Lakers. As a penalty, the Kings pay off the Lakers. Look at the teams, sharing revenue. It's almost like ... revenue sharing!

If the NBA had institutional revenue sharing, like the NFL, where smaller-market teams earned a cut of big-market teams' local TV contracts and attendance to help even the playing field court, the Kings wouldn't have been in this mess. If the NBA had a system that allowed the Lakers' massive profits to help get arenas built for those vital mid-market teams, we wouldn't be in this mess. Buss wouldn't be in this mess, facing the loss of up to $300 million in future revenue.

The NBA's business plan right now is so focused on luxury corporate seating and local TV revenue that the Kings could very well be the first sign of a coming gold rush. San Jose (within an hour of the Warriors' home base) and Chicago are next; if a New Orleans-based owner for the Hornets can't be found, Larry Ellison has already made it well known he wants to bring a team to S.J., which would make Lacob the new Buss. (Lacob just paid $450 million for the Warriors, almost completely because he has the entire lucrative Bay Area market. He wouldn't have bid that high if S.J. had a team.) If the Grizzlies fail to further develop a fan base in Memphis, becoming Chicago's second team is a no-brainer, and something sure to make Reinsdorf revolt. Heck, maybe we can fit a third team in New York City. Bronx Cobras, anyone?.

Real revenue sharing could prevent all that by making small and medium markets workable in the inevitable down seasons that happen in pro sports. But none of these big-market owners are willing to make real concessions until a gun's held to their head. The Maloofs are wielding the revolver right now, and Buss is paying for years of selfishness.

Something's broken in the NBA alright, but it ain't players' salaries. It's the owners' incredibly myopic self-interest.

 

* Spencer Hall had dibs on The Royal Scam, for what it's worth.

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