SBD/March 1, 2013/Franchises

Mastrov, Burkle Unveiled As Leaders In Bid To Keep NBA Kings In Sacramento

Burkle was considering AEG and Live Nation to bring entertainment to the arena
Sacramento Mayor Kevin Johnson on Thursday night announced that Penguins co-Owner Ron Burkle and 24-Hour Fitness co-Founder Mark Mastrov were "teaming up on a bid to buy" the NBA Kings and "construct an arena at the site of downtown's lagging open-air mall," according to a front-page piece by Lillis, Bizjak & Kasler of the SACRAMENTO BEE. The bid will "serve as Sacramento's counteroffer" should the NBA BOG next month reject the Kings' deal to move the franchise to Seattle. The bid price "was not revealed Thursday." However, Johnson said that the bid would be "very strong and competitive." A source said that it is "expected that the NBA will look over the proposal and forward it to" Kings Owner the Maloof family. Johnson said that Burkle would be the "driving force behind the arena plan, while Mastrov would lead the charge on the bid for the Kings." Sources said that both men would "contribute financially to both the arena and the team acquisition." Johnson added that Sacramento businesses have pledged $50M in sponsorships "for the first five seasons the Kings play in a new arena." Mastrov also intends to "revive the WNBA's Monarchs," which folded in '09, while former NBAer Mitch Richmond has committed $1M "toward the purchase of the team." Richmond is among "more than 20 local investors" who will bid on the 7% of the Kings being auctioned in bankruptcy court. Johnson made "no mention in his speech of Kings limited partner John Kehriotis, who seeks to buy the team and build an arena near the current Sleep Train Arena." Another source said that the project's "potential role in revitalizing downtown is 'a big reason why Ron has been interested.'" A source added that Burkle was "considering recruiting" both AEG and Live Nation to "bring entertainment acts to the arena" (SACRAMENTO BEE, 3/1). YAHOO SPORTS' Adrian Wojnarowski cited a source as saying the Mastrov-Burkle bid is "slightly lower" than the $341M that hedge fund manager Chris Hansen and Microsoft CEO Steve Ballmer have agreed to pay for the available 65% stake in the Kings (SPORTS.YAHOO.com, 2/28).

RENEWED HOPE: In Seattle, Shannon Fears wrote Johnson’s speech came “before thousands of cheering supporters” and was “long on hope and short on surprises.” He said, “With all due respect to Seattle … it is not going to be this team, our team. No way.” He said that it “could be done as a ‘public-private partnership’ that would not cost taxpayers money or reduce the city’s general fund.” Neither Mastrov nor Burkle were “present for Johnson’s speech” (SEATTLEPI.com, 2/28). In Sacramento, Tony Bizjak noted the speech “took on the atmosphere of a pep rally, with many in the crowd standing and cheering when Johnson took off his jacket to display his purple shirt and tie, and then announced Mastrov's name.” The announcement should “trigger several weeks of intense lobbying by both Sacramento and Seattle, culminating in an NBA vote on April 18 on whether to ratify the deal the Maloof family has struck with Seattle” (SACBEE.com, 2/28). Also in Sacramento, Ailene Voisin writes Johnson “might not be able to pull this off” because the arena “ordeal is a real doozy.” But the mayor “doesn’t give up easily. He doesn’t give up, period.” Voisin: “The end is always near. Las Vegas. San Jose. St. Louis. Anaheim. Virginia Beach. Now Seattle. Don't talk about moving vans and fatal blows to Kevin Johnson, though” (SACRAMENTO BEE, 3/1).

FOOTING THE BILL
: CBSSPORTS.com’s Ken Berger noted Mastrov, who “finished second to Joe Lacob and Peter Guber in a bid to buy" the Warriors, is believed to have a net worth of $350M -- "not regarded as enough to stand alone as majority owner in the franchise.” But with the “backing of other investors and Burkle spearheading the arena, Johnson might just have drawn up a compelling enough play to cause owners who will be voting on the fate of the Kings to take notice.” Johnson, who for “three years has fought valiantly as the Maloofs threatened to move the Kings … has forged a potentially potent alternative.” Though the purchase price “isn’t expected to be the sole deciding factor, it’s worth noting that the Mastrov-Burkle bid would not have to meet the Seattle bid to the dollar.” If the team were to “stay in Sacramento, it would save a relocation fee estimated" to be $30M or more and the city's $70M loan "would not have to be repaid.” Thus, the Mastrov-Burkle “apples-to-apples number is approximately" $425M to compete with the Seattle bid. Once the dollars “are resolved, the Maloofs' fellow owners will be in the uncomfortable position of choosing between relocation and the permanent stain it would apply to the NBA brand and an equally undesirable alternative: telling the Maloofs they can't sell their own asset to the buyer of their choosing” (CBSSPORTS.com, 2/28).
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