City of Seattle

The owners’ relocation and finance committees held a teleconference in the wake of several developments from the Seattle group that is trying to buy the Kings and relocate them.  Despite a ramped up effort from Steve Ballmer & Co, the committees decided against their position to recommend the team be kept in Sacramento and not moved to Seattle, a source told Brian Windhorst of ESPN.com.

A final full vote on the matter is expected to come at the owners’ meetings on Wednesday in Dallas.  Without a change in recommendation from the relocation and finance committees, however, it seems unlikely that the final vote will go in Seattle’s direction.  Even a vote for Sacramento won’t put the team in billionaire Vivek Ranadive‘s hands, however, as the Maloofs still seem intent on selling to the Seattle side. 

Last week, Seattle lead investor Chris Hansen increased his offer for 65 percent of the Kings to a record $409MM, up from $358 million.  He also offered a relocation fee payout of roughly $116MM to sweeten the pot for owners who may be on the fence.   Meanwhile, the Maloofs say if the Seattle move is blocked, they plan to sell a 20 percent share to Hansen’s group and keep controlling interest in the team.

The latest major development in the Sacramento Kings saga came on Saturday, when ESPN.com's Brian Windhorst reported that the Maloof family had a backup plan in place if the NBA shot down its sale of the Kings to a Seattle investment group. According to Windhorst, the Maloofs intended to sell a smaller share of the franchise to Chris Hansen's and Steve Ballmer's group, with the Kings owners apparently uninterested in selling to the Sacramento group led by Vivek Ranadive.

According to Tony Bizjak, Dale Kasler, and Ryan Lillis of the Sacramento Bee, however, the Maloofs haven't entirely closed the door on the Sacramento possibility. The Bee reports that the Maloofs "still have that option" (of selling to the Sacramento group), noting that the family was receiving updates from the NBA on the group's efforts as recently as this weekend. Nonetheless, the current Kings owners would still prefer to complete their deal with the Seattle group.

The NBA's relocation committee is scheduled to have a conference call today, and it's uncertain whether the committee will reconsider its recommendation not to allow the Kings to relocate. As long as that stance remains the same, it's unlikely that the Seattle group's increased efforts to create a bidding war will make a difference, as Sam Amick of USA Today writes. All along, commissioner David Stern has refused to endorse a bidding war or to pit the two cities against one another.

With the NBA's Board of Governors set to meet later this week to discuss and vote on the Kings' potential sale and relocation, Tom Ziller of SBNation.com argues giving Seattle an expansion team remains the most fair and logical solution, though it doesn't appear to be an option the league is seriously considering at the moment.

Last night, news broke that the Maloof family won't sell the Kings to the Sacramento-based bidding group, having instead structured a backup plan involving minority ownership for Seattle investors. The team seemed destined to remain in Sacramento when the NBA's relocation committee unanimously voted two weeks ago to recommend that the league reject the sale of a majority stake to the Seattle bidders, but last night's revelation appeared to threaten that arrangement. We followed up the news with a second thread of updates last night, and we'll keep track of today's developments here:

• SB Nation's Tom Ziller hears that the latest moves from the Maloofs and the Seattle group have angered the league office. The subject of whether David Stern has support from owners around the league in case the matter winds up in court will be a central topic of discussion in tomorrow's conference call, according to Ziller. TNT's David Aldridge reported last night that Hansen's group is uninterested in pressing charges in the event their bid is rejected, though The Bee's Marcos Breton raises the idea that the Maloofs could wind up suing the league.

Earlier updates:

• The notion that the Seattle group would own any portion of the Kings while they continued to play in Sacramento is a non-starter for the league, tweets Aaron Bruski of NBCSports.com.
• Brian Windhorst of ESPN.com, who broke last night's story, heard some owners around the league remain concerned about the ability of Sacramento investors to close and execute their plan to build a new arena in the city. According to Bruski, there is no such concern among the league's owners (Twitter link).
• Bruski's league sources maintain that the NBA's decision will come down to how it feels about the Sacramento bidders, regardless of what Seattle does. One source insists that Microsoft CEO Steve Ballmer, a primary investor in Chris Hansen's Seattle group, can't simply throw money around and expect to get his way. The Seattle investors have twice upped their offer for the majority share of the team (All Twitter links). 
• The NBA's relocation committee will hold a conference call Monday, and the day "is going to be crazy," a source tells Ailene Voisin of The Sacramento Bee. The source expects "substantial movement" on the issues related to the team's future by the end of tomorrow.

A couple of new wrinkles in the Kings saga emerged this evening, as the Maloofs have informed the league they won't sell to the Sacramento investors who've mounted an effort to keep the team in town. The Seattle-based bidders, led by Chris Hansen, now have a pair of purchase agreements in place with the Maloofs — one for a majority stake, and one for a minority interest that would allow the Maloofs to continue as principal owners. TNT's David Aldridge, writing for NBA.com, has more on the story, as we pass along here, along with other news on the night's developments:

• Chris Daniels of KING-TV in Seattle corrects his earlier report about Hansen's proposed relocation fee, this time pegging it at $116MM, more in line with the $115MM other reports are suggesting (Twitter link).

Earlier updates: 

• There's been buzz in Seattle that Hansen and company could pursue a lawsuit against the league if it won't allow them to buy the Kings, but Aldridge hears they're uninterested in pursuing a legal challenge.
• The same source tells Aldridge that the league was informed Wednesday of Hansen's increased bid as well as his backup offer for a minority stake.
• Hansen thinks this could be the last time for a while that the political and business climate in Seattle will be conducive to supporting a bid for a new NBA team.
• The relocation committee will hold a conference call Monday to discuss this weekend's developments. It's unclear whether the NBA's Board of Governors will be voting this coming Wednesday on whether to accept the Hansen group's initial offer for the team, or their revised bid instead.
• A source close to Vivek Ranadive, the point man for Sacramento's bid, said his group is comfortable with its position and doesn't plan to up its offer, according to Dale Kasler, Ryan Lillis and Tony Bizjak of The Sacramento Bee.

8:22pm: Tim Booth of The Associated Press reports that if Hansen's group buys a minority stake in the Kings, it will have the right to purchase a majority interest in the team at any time within a two-year window.

7:43pm: Chris Daniels of KING-TV in Seattle hears the Hansen group's proposed relocation fee is $126MM, slightly higher than the $115MM figure quoted to Windhorst (Twitter link). The share for each team would still work out to around $4MM. 

7:15pm: The league has been hoping to entice the Maloofs to sell to the Sacramento group, TNT's David Aldridge notes. It's unclear how today's news affects the league's thinking, but Ranadive and company are still expressing confidence that the Maloofs will ultimately sell to them (Twitter links).

6:06pm: Two sources tell Brian Windhorst of ESPN.com that the Maloof family, the principal owners of the Kings, have told the NBA they will not sell the team to the Sacramento-based bidding group led by Vivek Ranadive if the league doesn't approve their deal to sell the team to the Chris Hansen-led Seattle group. The Maloofs and Hansen have also worked out a backup deal in which Hansen and company would become minority owners while the Maloofs continue to run the club.

The Maloofs' pronouncement and secondary deal with the Seattle group come on the heels of yesterday's increased offer from the Hansen and his contingent of investors, which also includes Microsoft CEO Steve Ballmer. They upped their total valuation of the Kings by $75MM, to $625MM, and their bid for the Maloofs' 65% share to $409MM, a $51MM increase. Windhorst hears that revised offer includes a relocation fee of $115MM, which would break down to about $4MM for each of the league's 29 other teams. That's significantly larger than the $30MM relocation fee assessed to the SuperSonics when they moved to Oklahoma City to become the Thunder in 2008.

The NBA relocation committee will re-evaluate Hansen's bid to become principal owner, and has scheduled another meeting in advance of the full owners' meeting set for Tuesday in Dallas. Two weeks ago, the committee voted unanimously to recommend that the league reject Hansen's bid.

Hansen's backup offer would give his group a 20% share of the Kings for the price of $125MM. The league would have to approve the sale of that minority stake, just as it would with the majority stake, as Windhorst points out. Still, the league can't force the Maloofs to sell to Ranadive's group. The Maloofs and the city of Sacramento have been unable to agree on an arena plan, but, infused with cash from the Seattle group, the family could remain in control of the Kings and continue to pressure the city to give them a deal to their liking. If, after more time has passed, the two sides haven't reached an agreement, the Maloofs could approach the league again about relocating the team.

Owners are concerned that Ranadive's group won't be able to close and execute an arena deal in Sacramento, Windhorst hears, speculating that could be the impetus for the renewed efforts of Hansen and the Maloofs.

5:56pm: In spite of the increased offer from Hansen and company, the Sacramento bidders are still viewed as having the upper hand, according to TNT's David Aldridge. The Vivek Ranadive-led Sacramento group is buoyed by comments Heat owner and relocation committee member Micky Arison made on Twitter this week. Arison indicated the city had done what was necessary to keep the Kings.

2:12pm: The Seattle investment group led by Chris Hansen has increased its bid for the Sacramento Kings, according to Chris Daniels of KING5. Daniels reports that Hansen has informed the NBA that his new offer will increase the valuation of the franchise to $625MM, a $75MM increase on his previous bid. Because Hansen is attempting to buy 65% of the team, a $625MM valuation would mean the Seattle group's offer would increase to about $406MM.

The NBA's relocation committee has formally recommended that the Kings remain in Sacramento, and the Sacramento investment group is working toward finalizing its own bid for the team. Ric Bucher of 95.7 The Game reported earlier today (via Sulia) that the Sacramento group is seeking additional investors before it puts the full purchase price into escrow, though Aaron Bruski of NBCSports.com hears (Twitter link) that money isn't a problem for the group.

Even if the Sacramento group was able to match Seattle's previous offer, the new Seattle offer represents an increase of nearly $50MM for that 65% share. When the NBA's Board of Governors officially make its decision on the issue, which is expected to happen next Wednesday, it will be voting on whether to approve Hansen's purchase and whether to approve relocation. The league would clearly prefer the Kings to remain in Sacramento, so it will be interesting to see whether the Maloofs' sale to Hansen is voted down even if Seattle's offer is significantly higher than Sacramento's. One source told Bruski that "no matter how much they kick and scream, this is not about Seattle's offer" (Twitter link).

Daniels adds (via Twitter) that, in addition to increasing its offer, the Seattle group has agreed to pay revenue-sharing money should the team to move to Seattle, even in the initial years at Key Arena. The Sacramento group had agreed to eventually phase out the revenue-sharing money the Kings receive if the team remains in Sacramento.

As the Sacramento investment group led by Vivek Ranadive moves toward finalizing its bid for the Kings, the investors have offered to make a major concession to the NBA, according to Daniel Kaplan of Sports Business Journal (hat tip to Dale Kasler and Tony Bizjak of the Sacramento Bee). Kaplan reports that the group is willing to limit the money ownership would receive through the league's revenue-sharing program.

According to the SBJ report, if the group should acquire the Kings, it would agree to accept a reduced amount of revenue-sharing money during the team's final years at Sleep Train Arena, then would receive no revenue-sharing money after moving to the proposed downtown arena.

Kasler and Bizjak note that the Kings would be in line for about $18MM per year under the NBA's revenue-sharing program, which means such a concession would be significant. As Zach Lowe of Grantland points out (via Twitter), during the 2011 lockout, the NBA consistently pointed to the need for balance and profitability, so having a smaller-market team offer to opt out of the revenue-sharing program would be a bit of a shock.

Kasler also reports that the meeting to decide the Kings' fate is scheduled for next Wednesday, May 15th. The NBA's Board of Governors will meet in Dallas to officially vote on whether to allow the team to relocate and whether to allow Chris Hansen's purchase of the franchise. Based on the relocation committee's recommendation, the Kings are expected to remain in Sacramento.