Sacramento did what it promised it would: on Tuesday the City Council approved a term sheet outlining how it will help investors build a new downtown arena without raising taxes. The 7-2 vote commits $210 million from the sale of bonds that leverage the city's downtown parking infrastructure and about $40 million in property. The investors, led by billionaire Ron Burkle, will pitch in $190 million for the arena, $350 million to buy majority control of the Kings from the Maloofs and up to $500 million in real estate development around the arena, including several blighted city properties.
There's one huge if attached to all of this: those investments only happen if a set of NBA owners decide next week to keep the Kings in Sacramento, blocking the Maloofs' deal -- already in place -- to sell the team to a Seattle-based group led by Chris Hansen for a record valuation.
Let the vote counting begin.
Folks in Seattle tend to write that this is a done deal, an exercise of ass-covering futility for Sacramento. Folks in Sacramento tend to believe that the NBA wouldn't let Kevin Johnson and crew get this far if David Stern weren't ready to advocate on the city's behalf. Seattle observers point to the fact that the NBA has never rejected a bid as strong as the one made by Seattle. That's true. Sacramento observers point to the fact that the NBA has devoted millions of dollars and four years of staff time to get a new arena for the Kings, an arena that finally has approval from all parties. That's true, too.
Seattle has a vast corporate base including Amazon, Starbucks and Microsoft ... and three other major league teams to compete with for eyeballs. Sacramento has fans that have completely sold out 19 of the 28 seasons the team has been in town ... and no Fortune 500 companies. Seattle city leaders were hostile to the NBA in 2007 and 2008. Sacramento city leaders were totally ineffectual on this front from 2000-2008. Seattle has Ballmer and the Nordstroms. Sacramento has Vivek Ranadivé and the Jacobses. The scorecard is infinite; Nate Silver couldn't call this.
It'll be up to something like 12 owners from the league's finance and relocation committees. (The NBA has said that Stern combined the two committees to deal with this issue, but it's unclear that many owners will be present when the issue is discussed.) The supercommittee will meet April 3 -- in one week -- to hear the pitch from Seattle, to hear the pitch from Sacramento and to discuss the options with Stern, Adam Silver and the brains of the league office.
One option stands out as way too obvious to ignore: expand to 31 teams, placing the brand new Sonics in Seattle and keeping the Kings in Sacramento. If you stick a $400 million pricetag on the expansion team, you're cutting the 30 owners in more than you'd be taking away from in shared revenue. You'd also be raising the value of all teams as $400 million and the $525 million valuation paid for the Kings would be in the upper echelon of the league. But Stern and Silver have publicly dismissed the idea of expansion. Alas.
Instead, one city will win and one city will lose. Being a Sacramento-based writer, I'm privy to word around the city. And that word is that if the committee believes in Sacramento's pitch and the league's number crunchers say it adds up, Hansen will be asked to gracefully bow out with a promise he'll be fast-tracked for the next team up for relocation. There's no guarantee he'd comply -- he could at that point force the issue to the full Board of Governors, where he'd make the case of Seattle's market superiority and owners' rights to sell to whom they like. Or he could save his bullets, avoid pissing off the current and future commissioners, and withdraw.
At that point, all eyes would be on the Maloofs, who have an open disdain for Johnson and Burkle. Why? In 2011, when the Maloofs asked the Board of Governors to let them move the Kings to Anaheim, Johnson showed up to make Sacramento's case and present Burkle as a man willing to buy the team and keep them in the Capital City long-term. Burkle sent out a press release to that effect. The Maloofs were furious, basically spitting at the name from that point forward.
They came around on KJ, at least enough to halfway participate in arena negotiations once the NBA rejected their pleas for Anaheim. (Technically, the Maloofs never officially applied to relocate. But there's no question they went to the Board of Governors to ask for their blessing and did not receive it.) But last April when George Maloof blew up the agreed-upon deal with the city -- negotiated on the Maloofs' behalf by the NBA, including Stern himself -- Johnson stopped pulling his punches. The digs have been tasteful, but rampant. Even the city's top bureaucrat got into the mix on Tuesday night:
City Manager John Shirey said the deal is significantly better for the city than the March 2012 deal negotiated with the Maloofs - an agreement that was approved by the NBA but abandoned a month later by the family. [...]
And Shirey said the new deal has been made with "quality people with the wherewithal to live up" to their agreements.
So the question is: if Sacramento convinces the committee of owners to recommend keeping the Kings where they've been for nearly three decades, can anyone convince the Maloofs to sell the team to Burkle and company? Only time will tell, if we even get that far.
Of course, if the committee recommends approving Hansen's purchase, Johnson will not be bowing out gracefully. He'll take his case to the full Board of Governors, where he needs just eight votes out of 30 to block the sale. If it works, we're back to watching the Maloofs. If it doesn't work, the Kings will have played their final game in Sacramento. The Board of Governors meet the two days between the end of the regular season and the start of the playoffs, and there is no obvious path for bringing the NBA back.
What happened on Tuesday in Sacramento is being billed as historic. To reach that level requires a sympathetic set of team owners, a compliant Seattleite and a Maloof family decent enough to do the right thing or broke enough to be unable to fight it. It's going to be a very strange, very nerve-wracking couple of weeks on the West Coast.