Posted on January 23, 2013 at 11:10 PM
SEATTLE -- The Kings lost on Wednesday night. But that was likely a post script for many fans who care about the long term future of the franchise.
Sacramento Mayor Kevin Johnson repeated Wednesday that he was collecting investors in a rival bid to buy the franchise and keep it in his city. But he acknowledged he had not lined up a potential majority investor, and isn’t sure about plans for a new Downtown Sacramento Arena. Johnson said he hopes a solid plan, and investors, will help convince the NBA to reject the recent sale of the franchise to a Seattle group.
The NBA announced Monday that Chris Hansen has a purchase and sale agreement for the Kings. Both Hansen, and the Maloof Family, which currently owns the franchise, confirmed the sale. It is pending approval of NBA Owners. Sources say the deal was for 65% of the franchise, which would have a valuation of $525 million. It includes a $30 million dollar non-refundable down payment, by Hansen, to the Maloofs. A source close to the negotiations, speaking on a condition of anonymity, confirmed there was strategic reason for that payment and it may open the door for a legal challenge by either side if the deal is not approved.
NBA Owners may also smile at what the $525 figure has already done to franchise values. Forbes Magazine said Wednesday the Kings are now the 11th most valuable franchise in the NBA, based on Hansen’s deal. That also boosted the average franchise value to $509 million, according to Forbes, which says that’s a 30% over last year.
Author Kurt Badenhausen also wrote “The increase is due to higher revenue from television, new and renovated arenas, and the NBA’s new collective-bargaining agreement, which reduced player costs from 57% of revenues to roughly 50%. The labor deal also increased the amount of money high-revenue teams provide low-revenue teams.” His data also claims the purchase increased the Kings value 75% in one year. The franchise has been in the bottom four of the league in revenue, according to Forbes.
Hansen must file for relocation by March 1st. The NBA Owners will likely vote on the issue in April.