Concessions helped Sacramento group
|State Sen. Darrell Steinberg (left) and Sacramento Mayor Kevin Johnson celebrate news of the vote.
That group, led by software titan Vivek Ranadivé, agreed to cover a significant amount of any cost overruns for the franchise’s proposed new arena in Sacramento, the sources said, and agreed to a timeline of construction goals. But perhaps most importantly for the seven owners on the relocation committee who voted to overlook the more financially lucrative Seattle opportunity in favor of the Sacramento group, the desired new Kings ownership group agreed to limit how much revenue sharing it would take while playing in the team’s current arena and would end the club’s status as a revenue recipient altogether once moved into the new arena, one of the sources said.
“It is unusual to ask an ownership group coming into the league to agree, before they even get approved, to undertake these kinds of things,” the source said.
The NBA declined to comment, as did the Kings.
The Kings are projected to get about $18 million in supplemental revenue sharing in the coming season based on this past season’s financial performance. That’s among the highest projected amounts for any team in the league. The source, who is close to the Ranadivé group, said that figure will be lower in future years and nonexistent when the team moves into the planned new arena in 2016 because of an expected increase in locally derived revenue.
In Seattle, given that city’s larger and more vibrant corporate market, NBA owners were not worried about needing to subsidize the club, so the revenue-sharing pledge was likely a significant gesture on the part of the Ranadivé group in winning the approval of their potential new partners.
“They eliminated the positive impact Seattle would have as a wealthier market on the rest of the NBA,” said Marc Ganis, a sports consultant who last year advised on the sale of the New Orleans Pelicans. “It does go a long way to resolving many of the objections owners could have had.”
On the arena front, the Sacramento group has proposed a facility that would cost $449 million, including $258 million in public funding. Details on the cost-overrun concessions and construction-goal timelines were not available.
Of course, the Ranadivé group is not yet the Kings’ owner. The Maloof family, which owns the Kings, still has a signed purchase agreement with Chris Hansen, who had wanted to move the team to Seattle. Hansen publicly touted the existence of that purchase agreement last week on the Seattle bid group’s website, sonicsarena.com.
Theoretically, Hansen could move forward with trying to buy the team but keeping it in Sacramento. Whether the NBA would approve that is unclear, given that such a move likely would be viewed as a way to ultimately get the team to Seattle. The Maloofs also could hold onto the team, but the new-arena deal in Sacramento is between the city and the Ranadivé group, not with the Maloofs.
The full NBA ownership is scheduled to vote next week on the relocation request, and few expect any shift from the relocation vote of the committee.