Stern: Tug of war over Kings ‘wrenching’

Maloofs dispute claim that Sacramento bid is competitive with Seattle’s

The Associated PressApril 20, 2013 

NEW YORK — A recommendation on the sale of the Sacramento Kings and their possible move to Seattle could be issued next week and a final decision made early next month, ending a process NBA commissioner David Stern called the most “wrenching” of his career.

The committee reviewing the bids by the Seattle and Sacramento contingents is expected to meet late next week and make its recommendation. A vote by the full NBA Board of Governors could happen as soon as the week of May 6. Stern indicated the owners first will decide whether they would be willing to approve relocation.

Stern also said the Sacramento bid financially is “in the ballpark” with the deal from a Seattle group headed by Chris Hansen.

The Maloof family, which owns a majority stake in the Kings, disputed that in a letter to the advisory and finance committee.

Obtained by The Associated Press, the Maloofs’ letter, dated April 17, said the Sacramento group originally matched the $525 million valuation for the franchise to which Hansen agreed. Last week, Hansen increased the valuation offer to $550 million.

The Maloofs said the Sacramento group has asked not to enter into a binding agreement until the Seattle deal is terminated. The Maloofs said that would be a breach of contract and cost them the “leverage to aggressively renegotiate terms

in the event the existing agreement is terminated.”

“Based on these factors … we and our advisors see no reason to continue any dialogue with the Sacramento group or to give any further consideration to negotiating backup offers based on its latest non-binding proposal,” the letter said.

Stern said a decision must be made in time so the team’s placard can say Seattle — which lost the SuperSonics to Oklahoma City in 2008 — or Sacramento when it reports to New York for the May 21 draft lottery.

He said owners are “deliberating quite conservatively and deliberately” because the league has not faced anything like this battle between the two West Coast cities.

“This has been wrenching,” Stern said, adding that “it’s the only time in the last 37, 47 years that I haven’t known the answer.”

The Maloofs reached an agreement in January to sell a 65 percent controlling interest in the Kings to Hansen’s group at the total franchise valuation of $525 million. Hansen then increased his offer to $550 million, which implies paying about $357 million for the Maloofs’ 65 percent.

Stern has said expansion is not an option right now. The Board of Governors, comprising all 30 NBA owners, was briefed on the matter during meetings Thursday and Friday. The committee reviewing the bids also met Wednesday.

If a vote happens in the next couple of weeks, the Seattle group needs 23 of 30 owners to approve the sale. A simple majority — 16 votes — is needed to approve relocation.

“There’s no attempt to get any unanimity,” Stern said. “There’s only an attempt to get answers to every possible, any possible question that various owners have, and then they’ll vote however they vote, period.”

The commissioner previously said the sale of the Kings would not become a bidding war. And yet, a bidding war is what seems to have broken out.

Hansen put down a $30 million non-refundable deposit, while the Sacramento group has offered $15 million, the Maloofs’ letter said.

The Maloofs also have expressed concern to fellow NBA owners about the changes to Sacramento’s group, saying the reason new investors keep surfacing is because of a “lack of funds.”

Sacramento has fought back over the past three months to make the sale and relocation of the Kings a real debate. Mayor Kevin Johnson pushed a non-binding financing plan for a $447 million downtown arena through the Sacramento City Council — complete with a $258 million public subsidy — and lined up an ownership group to try to compete with the Seattle contingent.

The potential Sacramento ownership group is led by TIBCO software chairman Vivek Ranadive, who would sell his minority share of the Golden State Warriors if successful. Others who have joined the bid include 24 Hour Fitness founder Mark Mastrov, former Facebook senior executive Chris Kelly and the Jacobs family, which owns communications giant Qualcomm.

Ranadive and Mastrov were copied in the letter sent to the NBA committee.

Billionaire investor Ron Burkle, once a key cog in Sacramento’s group, had to back out of the bid two weeks ago because of a conflict of interest created by his stake in a company that manages some NBA players.

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