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I want to share with SB Nation readers a draft article written for the Sacramento Bee in 2010. The Bee chose not to publish it despite being well aware that Seattle interests were keeping close tabs on the Kings situation.
Neither this article nor other efforts to communicate our intentions to other markets should be interpreted as benign efforts to "educate" Kings fans. It should be obvious that residents of Sacramento do not want or need that type of condescending attitude or enlightenment from Sonics fans and in candor these actions were taken with a keen sense of self-interest. Each fan, myself included, has been forced to consider under just what circumstances they would consider being on the receiving end of franchise relocation. Some simply moved on from the NBA forever while others were able to reconcile this awkward and harsh reality only if the process included fair warning, honesty, and a candor that we felt was denied to us during our team's departure. We took these steps to as part of our own internal effort to justify what we knew would be a hard, distasteful but inevitable process. We continue to do this to make ourselves feel better in an admittedly awful situation.
The second and third points of this article address the steep price of saving a team and the deceptive window of opportunity to meet that price.
In 2010 when the article was written it seemed as if experience had provided good perspective for the nearly $500,000,000 cost of a world class NBA arena. Since that time however it has become apparent that salvation is more expensive than the cost of the building. We now know that there is an additional component to the cost/timeframe argument, specifically the now established staggering $525,000,000 price of acquiring or holding the controlling interest in an NBA franchise. Any city hoping to join or remain a part of the NBA community must have BOTH a viable arena plan AND either an existing ownership willing to resist the temptation of such a lucrative sale or new potential owners willing to pay the steep price of franchise ownership before out of state investors beat them to it.
Seattle is blessed with a substantial corporate base with multiple angel investors capable of securing and holding a franchise. Our problem has always been the lack of political will necessary to secure arena financing. In contrast Sacramento has had no shortage of active and real political support for building construction but has struggled to find an ownership group willing to proactively do what it takes to meet the price of ownership. As a result neither city had assembled all the pieces necessary to pay both the high costs of both franchise acquisition and arena construction.
Seattle's loud and public march towards resolving their arena issue in 2012 was a clear signal to Mayor Kevin Johnson that an investor willing to pay the premium price was needed sooner rather than later. In addition to being a connected NBA insider Mayor Johnson is a smart and capable businessman. It is inconceivable that he was unaware of well documented financial issues plaguing the Sacramento Kings team owners, the team's application for relocation to Anaheim in 2010, or Seattle's aggressive efforts to resolve their arena shortfall and acquire a franchise. Given these circumstances it was obvious to even the most casual observer that Sacramento needed somebody to step up with an offer that Kings ownership could not refuse or the risk losing the team to another market.
I would contend that the Sonics were lost because city leaders failed to take action during a critical period between a February announcement that the team was available for sale and July announcement had been sold to Clay Bennett. As the article states, "During the 6 months between that press conference and the sale announcement our city and our fans did nothing, absolutely nothing. We never really realized that the game had begun. As a result all of our rallies, all of our clamoring, and all of our efforts occurred after the deal was done. We were too late."
If Sacramento's efforts to save the Kings are unsuccessful it will be a result of similar inaction during a critical period prior to public knowledge or activity. Johnson failed to bring forward a prospective buyer willing to find the Maloof's asking price during a window that began with their first relocation attempt and was destined to end with either sale to a local owner or on the inevitable day when an outsider emerged to beat them to the punch.
This window would have been much shorter if not for the exorbitant $525M price tag that we now know ownership had set for the franchise. If Johnson did bring forward a buyer such as Ron Burkle to talk about buying the team they must have simply disagreed about whether the market would ever produce anyone willing to pay such a premium. It clearly would have been in all parties' best interest for the franchise to have been sold in a less controversial transaction, causing less harm to the reputations of the Maloofs and the NBA.
The Maloofs confidence in that price prooved justifiable when Hansen emerged with a completed arena proposal and a willingness to write a big check. That sale resulted instantly in a massive increase in franchise values across the NBA. It led once hesitant buyers like Burkle to re-evaluate their opinions of value and re-engage to bid with new confidence that they would not be dramatically overpaying for an asset they hope to sell at some future point for substantial profit.
Had Burkle matched Hansen's confidence in franchise worth perhaps he would have come to this conclusion earlier. He could then have worked with the city to accomplish critical steps such as confirming the value of their parking revenue monetization plan or addressing unresolved zoning and land use issues. A committed buyer would have had the opportunity to assume costs of the parking bid process and other preliminary planning expenses in much the same manner that Hansen committed nearly $100 million in land, purchase and contract costs that Hansen incurred as part of his due diligence in preparing to make an offer for the team.
As a result of their inactivity Sacramento funding mechanisms and arena plans may be viable, but remain largely conceptual in nature. The term sheet they offer represents a potential path towards a downtown arena it lacks significant detail and certainty of outcome when compared to a much more mature Seattle plan.