(from Sports Business Journal, May 6-12, 2013) Efforts in moving the Sacramento Kings to Seattle were denied last week following a negotiation between the National Basketball Association (NBA) and the group who is interested in buying the team. The group interested in buying the Kings, led by Vivek Ranadive, a software titan, agreed to cover a portion of any cost that overruns for the franchise’s largely publicly-funded new arena. Seattle has been a popular destination for the Sacramento Kings, given the larger, more vibrant corporate market.
The new Kings Ownership group agreed to limit the amount of revenue sharing it would take while the Kings play in the current arena, and would end the club’s status as revenue recipient altogether once the team relocated to the new arena. One source involved commented, “It is unusual to ask an ownership group coming into the league to agree, before they even get approved, to undertake these kinds of things.” Following this previous season, the Kings are estimated to generate $18 million in supplemental revenue sharing in the upcoming season, which is the highest among any team in the NBA. However, sources believe that dollar figure will be significantly lower in future years, and may not exists when the team relocated into the new arena in 2016 due to an increase in locally derived revenue. The revenue-sharing pledge by the Ranadive group has placed a promising result in winning the approval over their potential Seattle partners. Marc Ganis, a sports consultant who advised the sale of the New Orleans Pelicans, noted, “They eliminated the positive impact Seattle would have as a wealthier market on the rest of the NBA.”
However, the Ranadive group is not yet the Sacramento Kings owner. The Maloof family, who currently owns the Kings, agreed with Chris Hansen, who is interested in moving the team to Seattle, to a purchase agreement of the franchise, but the NBA is likely to disapprove any efforts in Hansen attempting to buy out the Kings. Scheduled votes are next week on the relocation request, but few expect any shift from the relocation committee.