The NBA's Board of Governors voted at a meeting in Dallas on Wednesday to reject an investment group's effort to relocate the Sacramento Kings to Seattle for the 2013-14 season.
NBA commissioner David Stern told reporters that the Board followed the lead of the league's Relocation Committee, which unanimously recommended in April that the relocation bid should not go through.
"We are able to report to you that the NBA Board of Governors voted to reject the relocation of the Sacramento Kings to Seattle," Stern said. "The vote was 22 against relocation and eight for."
By league rules, any franchise sale requires approval from 23 of the league’s 30 owners while any prospective relocation requires 16 “yes” votes. USA Today Sports and NBCSports.com first reported the decision.
The NBA will now proceed with efforts to negotiate a sale agreement between the Maloofs, who currently own a controlling interest in the Kings, and a Sacramento-based investment group led by TIBCO chairman Vivek Ranadive.
"We will talk to the Maloofs and see in the next 24 to 48 hours to see if we can help facilitate an agreement to be signed between the Ranadive group and the Maloofs for the sale of the franchise in Sacramento," Stern said. "The [relocation] committee recommended to the board and it was adopted that if the Sacramento community could produce a site, a construction team, a financially strong ownership group and the kind of support by the city and the region that Mayor [Kevin] Johnson has galvanized that the appropriate outcome was to keep the team in Sacramento and that's what they did."
The Seattle-based group, led by Valiant Capital's Chris Hansen and Microsoft CEO Steve Ballmer, was therefore left empty-handed.
"The Seattle presentation was brisk, firm, excellent and reflects the efforts that have been put into this and the extraordinary ownership group they have put together," Stern said. "We look forward to continuing the dialogue of some type with the citizens and potential owners in Seattle but we don't have anything concrete to support with respect to an NBA franchise in Seattle at this time."
Hansen issued a brief statement on SonicsArena.com Wednesday afternoon.
"While we are obviously extremely disappointed with today’s relocation vote and truly believe we put forth both a significantly better offer and Arena plan, we do thank the league and the owners for their time and consideration and look forward to hearing back on our agreement to join the Maloofs as Limited Partners in the Kings," Hansen's statement read.
He then expressed his gratitude to fans in Seattle.
"I would like to thank everyone in Seattle who has been a part of our effort and supported our cause," he wrote. "Words simply can’t express how much your support has meant to me personally and to our City. I truly believe we did everything possible to put our best foot forward in this process and you all should be proud and hold your heads high today."
The Board's decision provides a resolution to an uncertain situation that has dragged on for months and marked the end of what has been a wild week.
Stern initially expected the decision to be made during mid-April Board of Governors meetings, only to push that back multiple times. Stern has repeatedly referred to the handling of the Kings as one of the toughest decisions he’s faced as commissioner.
“It’s the only time in the last 47 years that I haven’t known the answer,” he said back in April. “No, but this is one that’s just been quite difficult and confusing for the owners as well. And we’ve been working very hard to give it a structure at their direction. We’re the staff, and we are trying to answer every question that they have.”
The NBA announced a purchase and sale agreement between the Maloofs and the Seattle group back in January. That deal involved a purchase of 65 percent of the team at an overall franchise valuation of $525 million. The group later filed the requisite paperwork to relocate the franchise to Seattle for the 2013-14 season, where the organization would have taken on the “SuperSonics” moniker, and then upped its offer based on a $550 million valuation. The original SuperSonics relocated to Oklahoma City and became the Thunder in 2008.
Earlier this week, in anticipation of the Board's vote, Hansen announced on SonicsArena.com that he was "voluntarily increasing our proposed purchase price" for the Kings to reflect a franchise valuation of $625 million. ESPN.com then reported that the Maloofs had reached a "back-up deal" that would have allowed Hansen and company to purchase 20 percent of the Kings for $125 million in the event that the Board voted against their relocation bid. Such a deal would theoretically hamstring a Sacramento group's efforts to purchase the franchise.
Johnson and a number of investors — including Ranadive, 24 Hour Fitness founder Mark Mastrov, billionaire Ron Burkle, and Qualcomm CEO Paul Jacobs — have worked diligently to keep the Kings where they are, preparing a competing offer for the Kings and agreeing to terms on a new Downtown Plaza arena deal. Kings fans organized “Here We Buy” nights to show their support for keeping Sacramento’s only major professional sports franchise in town. The Sacramento Bee reported earlier this month that Ranadive, a minority owner of the Warriors, put 50 percent of the Sacramento group's bid for the Kings into escrow.
The Maloofs expressed their preference for a deal with the Seattle group over the Sacramento group on multiple occasions, including in an April letter to the NBA's relocation committee.
Stern expressed optimism Wednesday that a deal could be reached between the Maloofs and Ranadive.
"I anticipate that they will come to be open [to a deal] and I plan to visit with them and close, hopefully, on that anticipation," he said. "The Maloofs have the right to retain ownership of the franchise. ... It's my expectation that we will be able to make a deal... to transfer the title of the team in Sacramento."
George Maloof addressed reporters in Dallas after the meeting's conclusion.
"If it had to turn out this way, it's fine with us," he said, according to NBA.com. "But my loyalty's to Chris, because he stepped up. ... The Mayor did a great job. He put a great team together. We'll see what happens. It's not over."
The proposed relocation of the Kings to Seattle came after the Maloofs previously explored moving the team to Anaheim and Virginia Beach.
Stern has maintained on numerous occasions this year that expanding the NBA to 31 teams to accommodate both cities will not be considered until the league renegotiates its television rights deals, which run through the 2015-16 season.
"There was a generalized talk [Wednesday] that it would be good in the future to consider that [expansion] issue [after] awaiting the next television renegotiation which is virtually upon us, in a year or so," he said. Stern will step down as commissioner on Feb. 1, 2014, marking 30 years after he assumed the league's top post. Silver, currently Stern's deputy commissioner, is expected to take over.