The record bidding war for the Sacramento Kings has hit a new height as the two sides involved keep throwing in money to try to sway NBA owners.
Two weeks after a committee of owners voted to recommend the Kings stay in California, the investors trying to bring the team to Seattle fired a last salvo Friday. Chris Hansen, who leads the group, announced he was increasing his offer for 65 percent of the Kings from $358 million to $406 million. The increase in the total valuation of the team would go from $550 million under his previous offer to a stunning $625 million.
To put into perspective how much Hansen’s group is offering over perceived market value, the Memphis Grizzlies was sold last October for $377 million.
“While we appreciate that this is a very difficult decision for the league and owners, we hope it is understood that we really believe the time is now to bring the NBA back to Seattle. It is paramount that we do everything we can to put Seattle’s best foot forward in this process.
”— Chris Hansen
Technically, the bid is being offered to the Maloof family, which owns the majority of the Kings. But it is really a message aimed at all of the league’s owners before they officially vote on Hansen’s relocation bid at a meeting next week in Dallas.
“While we appreciate that this is a very difficult decision for the league and owners, we hope it is understood that we really believe the time is now to bring the NBA back to Seattle,” Hansen said in a statement. “It is paramount that we do everything we can to put Seattle’s best foot forward in this process.”
A group in Sacramento led by Vivek Ranadive has bid $341 million for the Kings and secured the promise of more than $250 million in public money to keep the team and build a new arena. That puts the total value of the team at $525 million.
In a backroom deal cut just before the relocation committee vote two weeks ago, Ranadive sweetened his offer considerably when he promised to forfeit tens of millions in revenue sharing to fellow owners in the coming years.
That incentive could be worth between $15 million to $20 million per season, money other owners would not have to share under the current agreement between teams.
While it wasn’t an outright bribe, it was a direct path to the voting owners’ pockets that leveled the playing field between the bids. The Seattle group was confident it presented the better financial offer because of the larger market.
Ranadive’s offer was both unprecedented and effective as the seven members of the relocation committee all voted in his favor. It has been assumed the rest of the owners would follow that committee’s recommendation.
“We feel very confident about the position we are in right now. The NBA leadership and owners have always said that their decision would not be dictated by a bidding war,” Sacramento mayor Kevin Johnson said in a statement Friday. “This was always about whether Sacramento, a community that has supported the NBA for 28 years, can put together a plan and organization to ensure the franchise can rebuild and thrive.
“The ownership group, the city, and the community have shown the NBA, without any shred of doubt, that the Sacramento Kings belong in Sacramento. I believe the NBA owners realize that there is far more to think about than just an increased bid. They know what this story means to the league. We look forward to talking with all of them again in Dallas.”
Hansen’s public counteroffer Friday also included a promise that the franchise would pay into the revenue-sharing pool each season if the team was moved to Seattle. This also constitutes a raising of the stakes because Ranadive’s offer, sources said, included a caveat that he would not pay into the system, but only that he’d not take money out of the pool established for lower-revenue teams such as the Kings.
Previously, Hansen — whose group includes billionaire Steve Ballmer — announced he wanted to go through with a purchase of the Kings even if owners blocked the move to Seattle. In that case, Hansen would be in position to re-apply to move the team if there were any hold ups in Sacramento’s arena project, which is still in the infant stages.