According to Sacramento Mayor Kevin Johnson, the Sacramento Kings owners have struck a tentative deal to sell the team to local investors following the denial by the National Basketball Association to move the team to Seattle.
For months, the owners, Seattle investors (who wanted the team to replace a franchise the city lost in 2008) and California investors (who want the team to stay) were involved in bitter negotiations. This deal is led by tech developer and philanthropist Vivek Ranadive.
This deal replaces an earlier agreement negotiated in January between the Kings owners, the wealthy Maloof family (who have made real estate and other investments in the Western US) and a Seattle-based investor group led by hedge fund manager Chris Hansen, Microsoft chief executive Steve Ballmer and others.
Mayor Johnson declined to offer details of the deal. However a source close to the negotiations said it values the franchise at approximately $535 million and that more than $341 million have been placed in escrow.
The source also said that Ranadive will have to dump his minority ownership stake in the Golden State Warriors in order to buy a 65 percent stake in the Kings.
The source said, “In concept and in theory, everything has been agreed to. Money has not changed hands and George has not signed a piece of paper.” The source is close to the Maloof family and requested not to be identified because he was not authorized to discuss the deal.
This deal will also require NBA approval. At a City Hall press conference, Mayor Johnson declared the deal as a “defining moment” for the city. He said, “It’s a new era today. We know it’s about a team, yes, but it’s about jobs, it’s about revitalizing our downtown community, it’s about civic pride.” Johnson continued, “It’s about not letting somebody take something away that’s not theirs. We don’t take a backseat to anyone.”
According to Mayor Johnson, 24 hour fitness founder Mark Mastrov, members of the Jacobs family with ties it Qualcomm, Inc. and others from California are part of the investor group behind the deal. Chris Kelly, former Facebook Inc. executive, has also been identified as an investor.
In Seattle, fund manager Hansen is working hard to bring a team back to the city. The team will be renamed the SuperSonics after the franchise the city lost to Oklahoma City. He’s already made a deal with the city to build a new arena.
A committee of NBA owners voted that the team should stay in Sacramento last month. However, Hansen vowed to fight on and increased his bid for controlling interest in the Kings to $406 million. This valued the team at an unprecedented $625 million.
Tim Frank, NBA spokesman said, “The team will change hands once the deal closes in the league approves.”
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