A Seattle investment group led by hedge fund manager Christopher Hansen and Microsoft CEO Steve Ballmer are currently in negotiations with the Maloof brothers, the owners of the Sacramento Kings, over the purchase and re-location of the NBA franchise to Seattle, according to numerous sources.
The story was first reported by Adrian Wojnarowski from Yahoo Sports.
On Tuesday night, a Twitter tweet was sent from Dana Falk, the daughter of NBA agent David Falk, who tweeted that the Sacramento Kings were sold to a group from Seattle.
The tweet was later deleted by Wednesday morning.
According to Wojnarowski from Yahoo Sports, the Seattle investment group is seeking to relocate the NBA franchise to Seattle’s Key Arena for the 2013-14 season. The deal will include selling the Kings franchise for approximately $500 million. After the sale is finalized, the Seattle investment group has until March to file for re-location.
Although no agreement was reached, one source with knowledge of the talks described the deal to Yahoo Sports as “first and goal at the 1” while still admitting that it could “take some time” to get an agreement in place.
The Kings re-location news to Seattle comes only a day after officials in Virginia Beach, Va. announced they were officially ending their efforts to build a new arena for the Kings to re-locate to Virginia.
Public funding for a new arena in Virginia Beach proved to be a major stumbling block.
The Maloofs released a statement through a spokesman named Eric Rose who tweeted: “As we have said for nearly a year, we have been contacted by several cities and parties interested in the Sacramento Kings organization.”
Seattle has a proven track record of supporting an NBA franchise.
The Seattle SuperSonics were an American professional basketball team that played in the Pacific and Northwest Divisions of the National Basketball Association (NBA) from 1967 until 2008.
After the 2007-2008 basketball season the SuperSonics were relocated to Oklahoma City after Oklahoma investor Clay Bennett and a group of investors acquired the team from Starbucks CEO Howard Schultz on October 31, 2006, amid some public outcry and an award winning documentary SonicsGate.
Ironically, Clay Bennett is currently the new chairman of the re-location committee with the NBA and carries influence over a future Seattle re-location bid.
In December 2011 hedge fund manager Christopher Hansen of Valiant Capital Mgt. in San Francisco acquired 3 acres of property in the Sodo district of Seattle, just south of Century Link Stadium and Safeco Stadium, with a plan to invest $290 million in private capital towards the construction of a new $500 million arena and lure NBA and NHL franchises to Seattle.
Hansen said earlier that he would be willing to buy a NBA team and have it play in Key Arena for a season or two while the arena in the Sodo area is being built. Hansen offered to spend several millions to upgrade Key Arena to make it more suitable until the new arena is completed.
Last October, Seattle and King County government officials finally approved a deal to build a $490 million arena in the Sodo district of Seattle with $200 million coming from taxpayers. According to the agreement, public funds will eventually be paid back through rent and admission taxes from the arena.
The Seattle-Tacoma area represents the 12th largest T.V market in the U.S., according to Nielsen. Another large city, Vancouver, Canada lies just 2 hours to the north. NBA Commissioner David Stern has previously reported that he is interested in bringing more international exposure to the NBA. Vancouver previously had an NBA franchise. The Vancouver Grizzlies moved to Memphis in 2001.
The Kings came to Sacramento in 1985 from Kansas City and almost re-located to Anaheim in March of 2011 before the deal collapsed amid growing doubts about whether the NBA would permit a third NBA team in the Los Angeles region.
The Kings re-location news was initially met with some disbelief by Sacramento Mayor Kevin Johnson who tweeted earlier on Wednesday: “Bottom line Sacramento: it’s not over.”
Later in the afternoon, during a 3:00 p.m. press conference, Mayor Johnson signaled that the Kings were up for sale.
“Today is a significant day for our community, because for the first time, it appears that the Sacramento Kings are for sale,” Johnson said.
“All indications that I’ve seen, read and heard are that they’re exploring opportunities to sell the team” he continued.
Johnson said that Sacramento would continue to search for new ownership to replace the Maloofs while still developing a plan to build a new arena in downtown Sacramento.
The current arena in Sacramento is old and is in need of a replacement by NBA standards. Securing the necessary funds for a new arena in Sacramento has been a problem for the Maloofs and the City of Sacramento.
The Maloofs owe the City of Sacramento and other lenders $77 million dollars.
Sources have reported that the $500 million bid for the Kings by the Seattle investment group covers the $77 million dollars to settle the Maloofs’ outstanding debts.
NBA reporter Ric Bucher tweeted @710ESPNSeattle that the Maloof brothers are “looking to get back in the liquor business as the reason to sell the Kings.”
The NBA has stayed quiet and offered no comment about Kings relocation news.