The drama over the Sacramento Kings has finally come full circle. In the beginning of this saga, I proposed a pragmatic solution to this issue. An answer that I thought would work for everyone involved.
That is my proposal. Present a shared front to the NBA. Put away the price gun and present an alternative where everyone wins.
Seattle gets the Sonics back through expansion. Sacramento saves their Kings with a new ownership group. The NBA rids itself of the Maloof family, gets paid back the millions they are owed and takes in another $300 million to share among fellow owners.
The NBA has continued to shun the idea of expansion and that has led to things getting completely out of control. The relocation committee spoke loudly Monday, April 29th, when they unanimously voted to recommend that the Kings stay in Sacramento. And the Hansen-Ballmer group spoke even louder when they upped their bid to a $625 million valuation with a $115 million relocation fee.
The Seattle group is trying to buy their way into the league. It may work and then again, the NBA could still shun them and continue down the path that the relocation committee set in motion two weeks ago.
With full disclosure in mind, I will point out that on April 15th, I wrote nearly 700 words explaining why expansion wasn’t on the table.
So why doesn’t expansion work under this circumstance? Because Hansen has no intention of paying a true $550-million or even $525-million for the Kings. He intends on paying a 65-percent valuation of that price, which lies somewhere around $341-358 million.
In effect, he has established an enormous increase in value for NBA franchises that exceeds what he is actually willing to pay.
If the sale of the Kings to either Sacramento or Seattle passes, the price of expansion is no longer $300 million or even $400 million. It becomes the full valuation price of $525-550 million, some $150-175 million more than what Hansen is actually paying.
But that was then and this is now. Chris Hansen has raised his offer and when combined with the relocation fee, we are looking at him spending a whopping $521 million for the Kings.
So let me do quick math again. Hansen can pay his $521 million for 100-percent of an expansion team for the 2014-15 season, again, because he is the one who caused this mess. The Ranadivé-led group pays their $341 million for the Maloof’s 65-percent stake and Sacramento retains the Kings.
Seattle wins. Sacramento wins. David Stern wins on his way out the door by righting all wrongs and avoiding another. The owners win with a monster $456 million payday that will make up for any lost revenue between now and the new TV deal and they also get two franchises valued at over $500 million, not just one anomaly.
Lastly, when the two deals are combined and split up, the Maloofs win by getting the entire $406 million offered by Hansen and the NBA gets paid back the estimated $150 million the family owes the league. The Maloofs get paid, but they don’t get their wish of screwing over Mayor Kevin Johnson and the city of Sacramento. A full bank account is worth more than fulfilling a personal vendetta.
The NBA walks into the next TV deal with another top 12 TV market. They gain another tax paying team in addition to a team that has promised to leave their portion of profit sharing in the kitty once their new arena is built.
Seattle has to wait a year for their team, but with the NBA’s promise of expansion, they can push forward with their arena project. And what’s a year when you consider the last five years? They also get a clean slate and get to build a guilt free team from scratch.
Sacramento keeps their team, warts and all. But they stave off elimination and complete the greatest comeback in professional sports history.
Everyone is happy. This just makes too much sense.