Sources: Kings' owners to limit revenue sharing
The Kings' would-be new owners made a key but costly concession last week ahead of a relocation vote by NBA owners that may have been a deciding factor in keeping the team from moving to Seattle.NEW YORK -- The would-be new owners of the Sacramento Kings made a crucial and costly concession last week ahead of a relocation vote by NBA owners that may have been a deciding factor in keeping the team from moving to Seattle.
Software billionaire Vivek Ranadive, who hopes to purchase the Kings and complete a deal with local government to build a new arena in Sacramento, agreed to give up potentially tens of millions in revenue sharing from other owners to help sway them to reject the Seattle option, sources told ESPN.com.
The revelation helps explain why owners on the league's relocation committee appeared to pass on what had looked like a better long-term financial situation by moving the team to the larger Seattle market.
Essentially, Ranadive promised to let his potential fellow owners keep money they would otherwise owe to his small-market team each season under the current league rules. It was a shrewd, if quite expensive, card to put on the table as owners were making the challenging decision of what to do with the team.
The Sports Business Journal first reported Ranadive's offer.
This unprecedented component, sources said, was negotiated by the NBA league office as part of what is starting to look like a sweetheart deal for the league that Ranadive and the City of Sacramento ultimately presented. The city has pledged more than $250 million in public funds toward the new arena.
Ranadive's group is willing to pay a record price, $341 million for 65 percent of the team, to make it a total valuation of $525 million. He's also offered to reduce the amount of money the Kings would be scheduled to receive from fellow teams for the next few seasons. Then, once the proposed arena is constructed, Ranadive would phase out getting any revenue-sharing from their follow teams.
A source said Ranadive made the offer after a study projected a strong increase in team revenues once a new arena is opened.
The relocation committee's decision last week, which will be voted on and likely approved by the full body of the league's owners at a meeting next week, stunned the Seattle group led by investor Chris Hansen. He believed his offer was a better monetary deal for the league, especially because Seattle figured to be a market that would eventually pay into the revenue-sharing system instead of taking out of it as the Kings currently do.
As one of the lowest-grossing teams in the NBA, the Kings stood to be one of the biggest receivers in a new, more expansive revenue-sharing system. They could have received in excess of $20 million per season from richer teams.
Hansen released a statement after the vote saying he wanted to go through with buying the Kings despite the Seattle move likely being rejected. His group has a deal with the current owners, the Maloof family, to buy the team for a slightly higher valuation of $550 million.
No sale can be approved without approval of 75 percent of other owners. If the relocation bid is rejected, owners are expected to clear the sale to Ranadive's group once the Maloof family has agreed to sell the team to that group. Ranadive already put 50 percent of the money into an escrow account last week ahead of the owner's meetings.
- Chicago man killed in Salt Lake City stabbing
- Man ID'd after fatal crash on Ryan-Skyway ramp
- Woman wanted for Wicker Park bank robbery
- BMO Harris Bank branch in Austin robbed
- Baby boy found dead in Logan Square gangway
- Boxer Rubin 'Hurricane' Carter dies at 76 17 min ago
- Suburban woman wins $14M verdict in Yasmin case
- YMCA in Naperville gears up for 'Healthy Kids Day'
- Person drowns in kayak accident on Fox River
- abcnews: Meth Lab Found in Million-Dollar Home
- Newsviews: I-DOT Road Construction
29 min ago
Most Viewed StoriesMost Viewed Photos