Fight for Kings NBA team not over, Seattle investor vows
(Reuters) - A Seattle hedge fund manager whose bid to move basketball's Sacramento Kings to the Pacific Northwest city was rejected by a committee of NBA owners vowed on Tuesday to push forward with efforts to buy the team.
A day earlier, the National Basketball Association's relocation committee unanimously recommended against approving a request by Chris Hansen and partners, who include Microsoft CEO Steve Ballmer, to move the Kings from Sacramento, California, to Seattle.
The recommendation was widely seen as a victory for the California state capital, whose mayor - himself a former NBA player - led a hastily assembled team of investors backing a rival bid for the team.
But the champagne corks had barely finished popping in Sacramento when Hansen, in a statement posted on his website, vowed to fight on.
Unlike the group led by Sacramento Mayor Kevin Johnson, Hansen has a signed agreement to purchase the team from its majority owners, the Maloof family, in a deal worth about $357.5 million.
"We remain fully committed to seeing this transaction through," Hansen wrote. We "have offered a much higher price than the yet to be finalized Sacramento Group, and have placed all of the funds to close the transaction into escrow."
Hansen said his group would continue to make its case to the owners of 30 NBA basketball teams, who will take their final vote on the proposal between now and May 13.
Neither Hansen nor the Maloof family, which owns 65 percent of the team, would comment on the group's strategy for salvaging their proposal. But a letter recently sent by the Maloofs' sports business company to NBA officials shows that the family strongly supports Hansen's bid over that of the Sacramento group.
"There is no acceptable deal possible," a family representative wrote of the Sacramento bid, "and no serious desire by the Sacramento group to arrive at one. It has become too onerous for us to continue spending time and resources on a process that cannot succeed."
NEW GAME PLAN
A source close to the proposed deal said the Maloof family and the Seattle group have been talking about strategy since the committee vote on Monday.
The idea, this source said, would be for Hansen to persuade NBA owners to support his efforts to buy the team, even if they do not immediately allow him to move it.
Under the NBA's rules, a decision to relocate a team is separate from a decision to sell a team. So under this scenario, the league could support its committee's recommendation against moving the Kings to Seattle, while still supporting the Hansen group's efforts to purchase it.
The league could require Hansen to work in good faith with the city of Sacramento to try to keep the team there, setting a deadline for the construction of a new arena and working to keep attendance high at the games.
But if the arena wasn't built according to the schedule, or if attendance slipped at the games, Hansen could apply again for permission to move the team - and it could be more likely to be granted, this source said.
David Carter, a professor of sports business and marketing at the University of Southern California, said the strategy could work.
Moreover, he said, it could provide a graceful way out of the situation for the NBA, which on one hand prefers to avoid the public relations fallout that occurs when a team is moved, but on the other might prefer the larger media market and wealthier fan base that Seattle would provide.
"It allows the NBA to have a strong exit strategy," Carter said. "They've done everything they could to protect a home market, but if it doesn't perform, they've protected themselves."
Johnson, a former NBA all-star who played with the Cleveland Cavaliers and the Phoenix Suns, said he understood Hansen's desire to keep fighting for the team.
"If I were them, I would keep fighting too," the Sacramento mayor said. "I don't look down or begrudge anybody who's fighting for something they desperately want."