The owners of the Sacramento Kings basketball franchise have struck a tentative deal to sell the California team to local investors after the National Basketball Association denied a proposal to move the team to Seattle, Sacramento Mayor Kevin Johnson said on Friday.
The deal by an investor group led by tech developer and philanthropist Vivek Ranadive followed months of bitter wrangling between Seattle investors, who wanted the team to replace a beloved franchise the Pacific Northwest city lost in 2008, and California investors, who wanted it to stay put.
The deal replaces an earlier agreement struck in January between the King's current owner, the wealthy Maloof family led by George Maloof, which has made real estate and other investments in the western United States, and a Seattle-based investor group led by hedge fund manager Chris Hansen, Microsoft Chief Executive Steve Ballmer and others.
Johnson declined to provide details of the deal to keep the Kings in the California capital, but a source close to the negotiations said it values the franchise at roughly $535 million and that the group has placed more than $341 million in escrow.
For Ranadive to buy a 65 percent stake in the Kings he must divest his minority ownership stake in the Golden State Warriors, which could happen as early as Friday, the source said.
"In concept and in theory, everything has been agreed to," said the source, who is close to the Maloof family but declined to be identified because he was not authorized to discuss the deal. "Money has not changed hands and George has not signed a piece of paper."
The deal also will require NBA approval.
Sacramento Mayor Kevin Johnson, appearing triumphant and sleep-deprived at a City hall press conference, heralded the deal as a "defining moment" for the city.
"It's a new era today," Johnson said, flanked by politicians, local team investors and supporters.
"We know it's about a team, yes, but it's about jobs, it's about revitalizing our downtown community, it's about civic pride," Johnson said.
"It's about not letting somebody take something away that's not theirs," Johnson said, drawing raucous applause. "We don't take a backseat to anyone."
Johnson said the investor group behind the deal includes 24-Hour Fitness founder Mark Mastrov, members of the Jacobs family with ties at Qualcomm Inc, among others from California.
Former Facebook Inc executive Chris Kelly has also been identified as an investor.
Fund-manager Hansen has long vowed to bring a team back to Seattle and rename it the SuperSonics after the sorely missed franchise the city lost to Oklahoma City. He already has a deal with the city to build a new arena.
Last month, a committee of NBA owners voted that the team should stay in Sacramento, but Hansen vowed to fight on, raising his bid for a controlling interest in the Kings to $406 million, which valued the team at an unprecedented $625 million.
"(The team) will change hands once the deal closes and the league approves," said NBA spokesman Tim Frank.