Sacramento Kings: The Last Battle For An NBA Franchise

(Left to right) Dow Constantine, Chris Hansen and Mayor Mike McGinn announcing an agreement on a new arena in Seattle (Wiki Commons)

Chris Hansen’s back is against the wall. The value of an NBA franchise is as high as it has ever been; the Sacramento Kings — the most current team Hansen is trying to acquire — were recently sold for $535 million, almost $100 million more than the Golden State Warriors were sold for ($450 million); about $200 million more than the New Orleans Pelicans were sold for ($338 million); and close to $250 million more than what the Philadelphia 76ers were sold for (just less than $300 million). The upcoming TV deal negotiations — which will be supremely competitive with Fox, Turner, ESPN and, potentially, NBC all bidding for TV rights — will only drive up the value of an NBA franchise and for Chris Hansen that means it is highly unlikely any owner will be willing to part ways with their franchise anytime soon. The Milwaukee Bucks provide some dim lighting regarding the future for Seattle basketball, but in all honesty the Kings franchise is the Seattle SuperSonics last hope. That is why Chris Hansen is pulling out every stop — no matter how grey it is ethically — to get the Kings out of Sacramento and into yellow and green.

No one is denying Hansen is in the wrong here; Hansen himself admitted his missteps, though very vaguely. But to paint Hansen as the villain in this scenario, while letting all other involved parties slide is irresponsible. Specifically, as I mentioned last week, the NBA has to be held accountable for their treatment of Hansen, the Seattle-based group looking to purchase a franchise and the way the have handled the SuperSonics situation in general. Their poor, bordering on unethical, handling goes back to the original move of the Seattle SuperSonics to Oklahoma City and their current actions have been just as egregious (quick note on the link: I agree with almost everything in it, except the idea that Oklahoma City has done a better job supporting a NBA team than Seattle; OKC’s success is more a product of the growth of the NBA in general). Specifically, the NBA has been using the existence of the Seattle-based group to gain leverage and coerce cities into building new arenas using city subsidies. The Sacramento Kings’ new arena is being built with a significant portion of the funding coming from the city of Sacramento. Similarly if and when a new arena is built in Milwaukee, it is not far reaching to think Herb Kohl will want the city to contribute to the endeavor. One of the main reasons the city of Sacramento is contributing to the new arena, and one of the reasons Milwaukee very well could follow suit, is the NBA’s ability to hold Chris Hansen and the Seattle group over these cities heads. In the Seattle group the NBA has a chip they can play in convincing a city to subsidize a new arena being built. That is, the NBA can go to any city that can potentially be sold and say, “Look, we have a group here that is willing to buy the team and front all of the money to build a new arena in their city. If you guys don’t help us build an arena in your city, we’re letting the your team leave.”

And this is leading to NBA arenas being built using taxpayer dollars, something that is wholly unnecessary at this point in professional sports. Every team in the NBA is worth at least $312 million at this point (per Forbes) and almost every team could be sold for significantly more than what it is worth — Forbes had the Kings valued at $525 million at the beginning of the year and the Seattle group’s bid was $625 million. Also, despite how much the owners proclaimed “financial struggles” during the 2011 lockout, these franchises are  more often than not moneymakers that are only becoming more successful with time. The Los Angeles Lakers recently inked a 20-year, $3 billion TV deal with Time Warner Cable and while not every team is getting that kind of money for TV rights (OK, nobody is), every team gets a small piece of Lakers’ pie (via revenue sharing established by the CBA) along with the money they get for their own TV deal (the Thunder, for instance, make $15 million off their TV deal). Also as mentioned earlier, the NBA will be negotiating its own TV deals in 2016. That deal will be considerably larger than their current $930 million per year contract (again, the Lakers, as one team, got $3 billion!) and every team will be getting a large chunk of that money. All that to say it is kind of ridiculous to say that an NBA would “need” help from the city to build a new arena and the fact that city-subsidized arena projects are still happening is somewhat appalling.

That is where some of the blame has to be spread to Vivek Ranadive and the current Sacramento Kings’ ownership group. While Chris Hansen may have been wrong for supporting an anti-arena campaign, the campaign itself is completely justified. That campaign is being led primarily by the Sacramento Taxpayers Opposed to Pork (STOP). STOP began initially as opposition to the Kings’ building their new arena using city money. Now they are hoping to get a bill passed in 2014 that would allow citizens of Sacramento to vote on whether any proposal to build professional sporting facilities using city subsidies is approved. The argument will always be made that building a new arena brings in revenue for the city and creates jobs. However, the revenue growth is marginal and the jobs created are either temporary — to build the new arena — or part-time jobs that mainly exists during the season. STOP believes that the city should not have to front any money for the arena to be built and instead the Sacramento Kings’ organization should provide the funding. While this is not the desired path of the NBA or the Sacramento Kings, it is not without precedent. The Golden State Warriors are planning on building a new arena in downtown San Francisco. The $1 billion project is being funded almost totally by the the Warriors. The city is only contributing around $120 million and that money will be used to tear down and rebuild the old pier the arena will be built on, a process the city would have had to go through eventually anyway (though it is worth noting some say the pier reconstruction should cost closer to $60 million).

But the Kings will not be going the route the Warriors are going. Instead of the $447.705 million needed to fund the building of the arena, the city will provide $258 million — nearly 58 percent (source). And to be clear, I am in favor of keeping the Kings in Sacramento (the more NBA games within driving distance the better), but it is necessary to look at this situation from all angles. Nobody is fully at fault (except the NBA, arguably), but nobody is blameless either.

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