We knew this was coming.
The Hansen-Ballmer group, which last month reached an agreement to purchase 65% of the Sacramento Kings at a franchise valuation of $525 million, has officially filed for relocation. This was announced by NBA Commissioner David Stern himself.
This move has been completely expected for some time now and comes as no surprise to anyone who has been following this story. The deadline to file for relocation was March 1st, but the Hansen-Ballmer group has been working fast to try to steamroll this process. Despite that, the sale and relocation will not be voted on until the Board of Governors meetings April 18th-19th, in which Sacramento will also present. A simple majority is needed to approve relocation but 3/4 is needed to approve a sale, meaning Sacramento needs 8 no votes to block the sale. If the sale is not blocked, relocation would likely be a formality.
Stern reportedly called the Hansen-Ballmer group "very strong", because it is. Seattle's group features multiple billionaires as well as a potential arena deal and a great basketball market. This is just another reason why Sacramento's counter-offer, yet to be announced, has to be as strong as possible. The Mayor's office had hoped to announced the partnership sometime in the past week, but that has been pushed back a couple of times and now may have to wait until next week. That's likely not due to any hang-ups or setbacks but rather the complexities of putting together such a massive deal in a short period of time and wanting to get everything ultra-solid. The Mayor's office has learned a valuable lesson from the Maloofs on the dangers of a premature announcement.
Mayor Johnson is planning to be at All-Star weekend to lobby anyone and everyone who will listen on the merits of Sacramento. I would hope that Sacramento's partners and arena deal are public by that time. In my personal opinion, a Sacramento group will likely have to match the $525 million franchise valuation regardless of the fact that a Sacramento owner would not have to immediately pay back the $77 million owed to the city or any relocation costs. That valuation increases the value for all NBA teams and the Board of Governors will want that. At 65%, a Sacramento ownership would have to come up with around $341 million. 25 local partners have already pitched in $1 million each with the large equity partner(s) throwing in the rest. The partnership the city is rumored to be targeting is a collaboration between Mark Mastrov and Ron Burkle. Mastrov has met with local business leaders and Burkle met with Commissioner Stern last week.
UPDATE 5:30 PM:
Some more Stern quotes:
Stern on #NBAKings - "That's why we have a board of governors, to make difficult decisions like this one."— Dale Kasler (@dakasler) February 7, 2013
Stern: Mayor Johnson will go to NBA soon with competing ownership team, arena plan 'with a substantial subsidy from the city of Sacramento'— Ryan Lillis (@Ryan_Lillis) February 7, 2013
Stern: NBA will examine 'buildings (arenas) and the likelihood they’ll be built, about the support in both cities (Seattle, Sacramento)'— Ryan Lillis (@Ryan_Lillis) February 7, 2013
UPDATE 6:11 PM:
King5 News in Seattle has posted the raw video of Stern's press conference if you would like to watch for yourself.
UPDATE 7:30 PM:
KJ releases a statement through Twitter:
"As we’ve said from the start, Sacramento is playing to win. For 28 years, we’ve proven time and again to be a top NBA market." -cont...— Kevin Johnson (@KJ_MayorJohnson) February 7, 2013
"Our fans have set league records for consecutive sellouts. Our corporate community has stepped up in ways never seen before." -cont...— Kevin Johnson (@KJ_MayorJohnson) February 7, 2013
"We are a top 20 media market where the NBA enjoys 100% market share and no competition from pro football, baseball or soccer." -cont...— Kevin Johnson (@KJ_MayorJohnson) February 7, 2013
"We are the state capital of the eighth largest economy in the world, a place where more businesses work to promote a positive image"-cont..— Kevin Johnson (@KJ_MayorJohnson) February 7, 2013
"than in any other city in the US outside of Washington, DC.And above all, we know that with an ownership partner committed both" -cont...— Kevin Johnson (@KJ_MayorJohnson) February 7, 2013
"to Sacramento and an arena plan already supported by the City and NBA, " -cont...— Kevin Johnson (@KJ_MayorJohnson) February 7, 2013
"Sacramento is ready to show what a great one-team market can be, should be, and is."— Kevin Johnson (@KJ_MayorJohnson) February 7, 2013