Kings fans hanging on every morsel of information took a bit of a stomach punch Friday night. Chris Hansen, one of the lead investors in Seattle’s bid to purchase the Sacramento Kings, announced on SonicsArena.com that his group had increased its offer by $25 million. That brings Seattle’s total offer to an enterprise value of $550 million. (Note: In actuality, it appears that Hansen would be adding just $16.5 million to his offer when taking into account the offer is for 65 percent of the Kings.).
Initial reaction — damn. But what happens next? What does it mean for Sacramento?
The NBA has long said that it doesn’t expect this to turn into a bidding war. Hmmm. Hard to truly know if the NBA has the power to stop a bidding war. Could the NBA say the Maloofs/Hansen deal was already submitted as is and that’s what all parties are working with? Does a new deal have to be re-submitted and could that take additional time? Or is adding money a simple procedure and a true bidding war is on the horizon?
The Sacramento side has assembled an impressive group of millionaires and adding another $16.5 million might be manageable. But if things truly take off, the billionaires in Seattle seem to have a clear upper hand.
But all hope is not lost for Sacramento. Never underestimate the power of the NBA and more specifically, David Stern.
In 2010, Stern and the NBA outbid Oracle CEO Larry Ellison in an effort to buy the New Orleans Hornets. Ellison’s hope was to move the franchise to San Jose, but in the end, Stern said, “Our goal all along has been to get the Hornets bought by somebody whose commitment to New Orleans would be unrivaled.”
Ellison told the San Jose Mercury News that he offered $350 mill but was outbid by the NBA. Stern then sold the franchise to Tom Benson for a reported $338 mill. So if both reports are accurate, the NBA took a loss of more than $12 mill just to avoid relocation and keep the Hornets in a city that Stern deemed worthy. The other possibility is that Ellison’s high bid was simply ignored for a lesser bid from the NBA. Either way, relocation was to be avoided in Stern’s eyes.
And Stern has been a constant supporter of Sacramento. Most believe that idea has only been strengthened through this recent process, with Stern having many chances to nix the Sacramento ownership group. Instead, the league has been working hand-in-hand with the incumbent city, making sure all ducks are in a row before the league’s Board of Governors must make a ruling.
It’s also very hard to imagine that Kevin Johnson and his assembled ownership group didn’t have discussions about this possibility. Hansen and Steve Ballmer have deep pockets and the threat of more money being thrown into the ring certainly had to be a concern. KJ and Company would seemingly either have a plan or know what to expect next from the NBA. Hard to imagine they go through all of this, get news of an increased bid from Hansen, and simply say, “OK, you win.” The Sacramento Mayor will await word from Stern and the NBA on his next move.
What happens next is anyone’s guess, but Kings fans have been put through the ringer for years. What’s another couple weeks?