What Kings Deal Means for the NBA

After much talk about the Kings future. A decision was finally made. After an apparent deal was done to move the team to Seattle, residents of Sacramento were not happy. The Maloofs brothers were being pressured to keep the team in Sacramento. The situation was tense because Seattle lost an NBA franchise and was hungry for a return team. Sacramento has been home to a loyal fan base that was supportive of its team.

The bid for the team to move to Seattle was in place, as I wrote about previously. Later Sacramento made a push to keep the Kings, an argument they ultimately won. The NBA owners officially voted to reject the bid to move the team to Seattle and keep the team in Sacramento. This decision was able to be made after billionaire Vivek Ranadive came to an agreement to purchase 65 percent of the Kings and keep them in Sacramento.

Dollars Behind the Deal
Ranadive will pay $348 million for his 65 percent stake in the team. Ranadive already put $200 million in an escrow account before the deal in anticipation of the deal getting done. The total valuation of the sale will be $535 million.

The team owed money to the city of Sacramento and the NBA, a total of $60 million. After taking that debt into account, the Maloff brothers were able to make about $200 million for their share of the team.

Ranadive secured about $250 million from Sacramento public officials toward a potential new Kings arena.

Vivek Ranadive

What it Means for the League
The sale of the Kings for $535 million set a record for the National Basketball Association. From the year 2012 to 2013, the average value of an NBA team rose 30%. A lot of the reason for the increase in value has to do with new stadiums and a television contract worth more money.

At the end of the 2011 calendar year, Joshua Harris and his group purchased the Philadelphia 76ers. It is diffiuclt to imagine that they paid only $280 million for the team. Looks like a pretty good investment right now.

Final Thought
With the rapid growth of the league, expansion has to be looked upon seriously. Although Sacramento was ultimately successful in winning the team, Seattle put up a good fight. The bid for the team to move to Seattle was more than respectable. The obvious interest in having a team in Seattle must be looked at seriously by the NBA. The NBA in the past has avoided talk of expansion but now is the time where it should be looked at because of the increasing revenue value of each team.

@dmrosen7

Sacramento Attempting to Keep the Kings

About two months ago, it was reported that the Sacramento Kings were sold to a group headed by hedge-fund manager Chris Hansen and Steve Ballmer a Microsoft executive. This group planned to take the team to Seattle. I wrote about the impact that the move would have on both cities and the National Basketball Association.

The NBA Board of Governors have the final decision in whether or not the deal goes through. This decision is expected in mid-April. The city of Sacramento have recently made this decision more complicated.

Sacramento Mayor, Kevin Johnson, has strongly opposed any move that would take the Sacramento Kings to another city. Mayor Johnson and other Sacramento city officials have put together a preliminary deal to build an arena in Sacramento. The purposed plan would cost a total of $447 million.

Kevin Johnson

The $447 million cost would be paid for by the city and by a new investment group. The city of Sacramento would contribute $258 million to the project. The new investment group made up of Vivek Ranadive (Silicon Valley software), Mark Mastrov (24 Hour Fitness founder), and Ron Burkle (billionaire) would contribute the remaining $189 million.

The next step in moving forward with this plan is to get approval from the city council. This vote will happen TODAY.

Final Thought
The result of the city council's decision could be impactful on the NBA Board of Governors decision. If the arena deal is approved, the city of Sacramento may seem more fit to continue to host the NBA franchise. At the end of this deal, either the city of Sacramento or the city of Seattle will be devastated. The city of Sacramento could lose the franchise that they have been cheering for years. The city of Seattle thought they were finally getting an NBA franchise back to the city, that dream could be destroyed.

@dmrosen7 

Kings Sold!

Kevin reported a couple weeks ago of the breaking story that the Sacramento Kings were being sold. It has now become official. The current owners of the Sacramento Kings, the Maloof family, will sell the 53 percent ownership of the team. Minority owner, Bob Hernreich, will also be selling his 12 percent stake in the team. Hedge fund manager, Chris Hansen, and Microsoft CEO, Steve Ballmer, will be heading the Seattle based group in the purchase of the team.

The Seattle based group plans to move the franchise to Seattle. In order to do so for the 2013-2014 NBA season, the new ownership must apply for relocation by the March 1st deadline set by the NBA. If this timeline is followed, the board of govenors for the NBA will be able to vote on the relocation at the annual April meetings. Seattle is not new to relocation in the NBA. The city of Seattle had an NBA franchise taken away from them when the Clay Bennett moved the Sonics to Oklahoma City. In this move Bennett left the logo and name of the team in Seattle. Many loyal Seattle basketball fans were devastated to lose the team they grew to love.

Unfortunately that devastation is about to hit Sacramento. Former NBA point guard and mayor of Sacramento, Kevin Johnson, is not going to let the team go without a fight. Johnson got permission from NBA commissioner, David Stern, to purpose a counteroffer to the league owners. This counteroffer would allow the Kings to be bought by a group that would keep the team in Sacramento. Johnson gives legitimate reasons to why the franchise should stay in Seattle. He said, "Sacramento has proven that it is a strong NBA market with a fan base that year in and year out has demonstrated a commitment to the Kings by selling out 19 of 27 seasons in a top-20 market and owning two of the longest sellout streaks in NBA history."

The valuation of the team is more than some may have expected at $525 million dollars. This figure does include relocation fees. As many know, stadiums are a large part of NBA deals. Seattle approved in October plans to build a $500 million stadium. NBA superstar, Lebron James, had plenty to say on twitter regarding the valuation of the Kings. He first commented on the valuation saying, "So the Kings getting sold for 525M!! And the owners ain't making no money huh? What the hell we have a (lockout) for. Get the hell out of here." Later he tweeted about Mayor Kevin Johnson's effort to keep the Kings in Sacramento by saying, "I do know Mayor Johnson and the city/fans of Sacramento will do whatever it takes to keep the team put. We'll see what happens #NBAfiles."

Final Thought
This move is good news for the NBA. This move is terrible news for Sacramento. This move is conflicting for Seattle. The NBA is pleased to hear that a franchise like Sacramento is worth a great amount of money. It goes to show how strong the league is. The city of Sacramento will obviously be devastated. Losing a team that you have rooted for must be extremely difficult for the fans of the city. Seattle is finally getting a team back, and they deserve it. They do understand the feeling of losing a team and must feel some sympathy for the city of Sacramento.

@dmrosen7