NBA's loyalty to Sacramento could prove costly financially
The extraordinary precedent for keeping the Kings in Sacramento was laid down three years ago by commissioner David Stern.
When Stern stepped forward to use league money (valued at $310 million) in order to purchase the New Orleans Hornets in 2010, he was making it clear that the new priority for the NBA was to prevent franchises from abandoning markets in order to hop from one city to another. That new point of view was upheld Monday when an NBA relocation committee of eight owners voted unanimously to recommend that the Kings be prevented from moving to Seattle, where a deep-pocketed group led by Chris Hansen and Steve Ballmer had signed a binding agreement to purchase the franchise for a league-record $550 million.
The investors and fans in Seattle will be fuming at this decision, which is likely to be upheld by a May 13 vote of all NBA owners. Seattle's point of view will be that they did everything by the book in negotiating an exceedingly high sales price with the Maloof family, which now appears forced to sell to the Sacramento group that has no binding agreement to match the offer from Seattle. The Maloofs have feared that the Sacramento investors will be enabled to negotiate a cheaper price on the grounds that a new arena will wind up costing much more than detailed in their original proposal to the NBA earlier this month.
If the Maloofs are shortchanged and if the new ownership of the Kings struggles to build an arena as planned in downtown Sacramento (the Seattle investors having warned the NBA in great detail that the downtown site promises to be a non-starter), then this is going to go down as a highly controversial decision that was set forth by Stern.
At the same time, it should come as no major surprise that Sacramento will be keeping its team. Whatever Stern might have done to help strengthen the bid of local investors in Sacramento, it cannot be as risky as the investment he made three years ago to keep the franchise in New Orleans.
At that time the Hornets were playing their fourth season in New Orleans following their return from Oklahoma City, where they had been relocated for two years by the destruction of Hurricane Katrina. There were far more questions about the viability of the distressed city of New Orleans to support two franchises -- the Hornets and Saints -- than there are today of Sacramento's ability to support the Kings.
Stern purchased the Hornets in order to prevent them from being sold to an outside owner who might move the franchise. He then negotiated the sale of the team last year for $338 million to Tom Benson, owner of the Saints, who has rebranded the team as the Pelicans while ensuring that it will stay in New Orleans.
By sticking out his neck to save the Hornets, Stern suffered injury to his own reputation. To this day he stands accused by many throughout the league of having "vetoed" the Hornets' trade that would have sent Chris Paul to the Lakers and Pau Gasol to the Rockets. That incident has helped define Stern, in the eyes of his many critics, as a bullying autocrat.
If Stern was willing to endure so much pain and angst on behalf of the Hornets, then he surely wasn't going to abandon the principle of maintaining longstanding relationships on behalf of the Kings and their fans in Sacramento. While the proposal to keep the Kings in Sacramento raised numerous questions, the franchise was nonetheless positioned more strongly than the Hornets were in post-Katrina New Orleans.
The painful irony for the investors and fans in Seattle is that it was the loss of their Sonics -- who in 2008 were enabled to move to the less lucrative market of Oklahoma City with little opposition -- that appears to have informed Stern's subsequent attempts to save the teams of New Orleans and Sacramento. Ever since Clay Bennett swept his newly purchased team out of Seattle, Stern has worked hard to make sure that nothing like the loss of the Sonics will happen again under his watch.
This may yet turn out to be a painful move for the NBA. While Sacramento's economy remains in recession with high unemployment, Seattle is one of the fastest-growing markets in the country. Its fans have now been spurned twice by the league. They have good reason to snub the NBA in return. Seattle figures to be a toxic no-go area for years to come at a time not so long after the NBA settled a lockout in which the league's owners were desperate to raise revenues. It is hard to envision how the NBA could make more money in Sacramento than in Seattle.
The league embraced a bigger-picture view while bringing in Vivek Ranadive, a recently discovered Kings investor who may help the NBA grow its business in his native India. In the end, the NBA has held fast to its newfound principle of not abandoning loyal markets. It is a good principle. However, with more franchises expected to be sold in the years ahead, it remains to be seen whether the NBA will move forward consistent and true -- or whether Seattle will look back someday and realize it was a victim to the exception instead of the rule.