Posted in: Basketball

Not So Fast Seattle! Kings Might Stay Put With Larry Ellison Offer

Larry Ellison presenting

Larry Ellison is worth a reported $41 billion. In 2010 he failed to buy the Golden State Warriors. Now he wants the Sacramento Kings.

Ellison has stepped in with a last minute with a possible counter offer to buy the Sacramento Kings. Previous reports had the Kings being sold to a Seattle group and moving north.

News of Ellison’s involvement could cause problems for the Seattle group simply because of how much money the Silicon Valley mogul has. In theory he could outbid almost any offer.

The Sacramento Bee broke the story about Ellison. According to the publication Ellison is meeting with Sacramento Mayor Kevin Johnson about the city’s situation with the team.

To complicate things more for Seattle, Kings minority owner Bob Cook is claiming the Maloofs (the Kings’ majority owners), have unfairly shut limited partners out of bidding for the team.

The hope for the city of Sacramento and Cook, is to be able to present the NBA with a competing bid that would derail the current sale to Seattle.

Ellison’s camp declined comment. The Sacramento mayor’s office released this statement:

“Out of respect for the private nature of these conversations, we are not commenting on any of the ongoing discussions with potential equity partners, real or imagined.”

Don Fitzgerald, attorney for minority owner David Flemmer says:

“We feel our rights are being trodden upon. If they’re trying to bypass (the limited partners) on the deal with Seattle, we’re going to have issues.”

Another Bay Area group working independently of Larry Ellison is planning to make an offer to buy the team.

All this could spell trouble for the high powered Seattle group that was hoping to move the Kings to Seattle and bring the Supersonics back to a city rich in sports history.

What do you think? Will the Kings move to Seattle or stay in Sacramento?

[image via drserg / Shutterstock.com]

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Comments

11 Responses to “Not So Fast Seattle! Kings Might Stay Put With Larry Ellison Offer”

  1. Gerald F. Shields Jr.

    If Ellison gets into it, then the Hansen / Ballmer group are going to need to find more investors to help match the Oracle CEOs entry. Still, it may be too late anyway.

  2. Wolf Larsen

    Ellison missed out on the Warriors because his bid was too late in coming in even though it was for more money. This sale is not an open bid. It is a negotiated contract between the Maloofs and the Hansen group. The ONLY people at this point that can derail the sale to Seattle is the NBA and it is doubtful that they will deny the sale to a bigger market with relocation fees that will benefit all of them. From a television revenue standpoint the move to Seattle alone is enough for the owners.

    The NBA could deny the sale to the Hanson group and side with a local group but the owners would be limiting their own options should they decide to relocate or hold a city hostage for a new arena. They will also want to avoid potential lawsuits. There is too much of a legal downside to deny a negotiated legitimate offer with a solid plan for a new arena and owners with deep pockets to side with another.

    This is not the same as the Anaheim deal which infringed on both the Lakers and Clippers territory. Not to mention the Maloofs would still have been in the picture. Shedding that ownership from the NBA will be a very enticing for the BOG.

    If the Hanson group passes the financial vet which is a foregone conclusion and the arena deal is solid there is little that Ellison or anyone at this point can do to keep the Kings in Sacramento. Too bad Sacramento didn't try putting this offer together years ago….

  3. Erik Dylan Trevor Charles

    It doesn't matter if they have a binding agreement. If the minority owners have a first right clause to match offers. Plus it's ultimately up to the owners and board of governors.

  4. Wolf Larsen

    I hope you are right but the minority owners right of first refusal is a very gray area legally and could take YEARS to settle in the courts….by that time the team will probably be in Seattle. I am sure the Hanson group has plenty of legal counsel that has already anticipated this and formulated a legal contingency.

    This is the strength of the group buying the Kings….their ability to negotiate strong contracts and protect themselves from legal challenges. The NBA owners know this and will probably not want to get into a protracted legal challenge that could alter their abilities in the future to move their teams and sell to whomever they choose. That is the problem that Sacramento has at the moment. The owners are not known for having a spine and passing up bigger television contracts and relocation fees they can pocket themselves.

    If they allow the relocation to go through they are not legally liable….the minority ownership will have to challenge the Hanson group. If they deny it to a viable group with an arena and a good faith down payment they will be opening themselves up to an array of legal challenges….something they want to avoid.

    You are correct….this is ultimately up to the BOG and the NBA ownership which is not really good news for Sacramento. I hope they can keep the team but I think realistically it is decidedly more than a long shot. They are fighting the good fight and if the team had been put up for sale in an open bid scenario there is a good chance they could have made a viable offer.

    But the bottom line is….the owners want owners like Hanson and Balmer. They want a team with a solid arena plan…a bigger television contract and most of all they want the freedom to do as the Maloofs are doing should they have the need. They do not want to limit their options which is why they will probably approve the move.

    I wish you and Sacramento luck. It is a raw deal but it is the nature of sports ownership. Billionaires do not like being told what they can or cannot do…even by other billionaires….

  5. Erik Dylan Trevor Charles

    Burkle owns a good stake in the penguins and I can't imagine them having a problem with him wanting to own the Kings and opening a new arena. If the Ellison story is true, he can outbid anyone. Period.

    I think it would be a PR disaster to move the Kings. As big if not bigger than the Seattle fiasco. Stern has said he wants to support small markets and it would look horrible if Sacramento has sold out 19 whole seasons and have done everything the NBA has asked.

    I really think the attendance would go up significantly with a new arena, no fear of a move, new owner(s), and a product on the floor that sometime in a span of six years would actually improve. Plus the Maloofs are broke so they always get a terrible

  6. Wolf Larsen

    Everything you say is true and in a fair an just world the Kings would stay in Sacramento. The fans have supported the franchise through thick and thin and deserve better but the problem is the team is not really for sale anymore. It was never an open bid situation. Ellison could double the offer and it would still be up to the BOG to decide on the offer that is on the table. It is doubtful that Ellison will get involved given his investment and goals in Lanai and the fact he is a Bay Area guy. He could get involved but it would be a separate offer contingent on an arena deal.

    The arena is a real problem as well. Sacramento has been trying to build a new arena for the last decade and fallen short time and again. The Maloofs are the ones that walked away from the last deal but its funding had to many uncertainties and moving parts to really be a solid deal. Hopefully if they stay in Sacramento they can come up with an ownership that will be willing to fund a majority of the arena.

    As for a PR disaster….that may very well be in the immediate region but nationally it will have little effect just like the move to OKC didn't really impact the attendance or revenue of the league….if anything its profile was increased.

    I sincerely hope the Kings stay in Sacramento because the fans have been loyal but the cold hard facts are that Seattle is a bigger market and with a new television contract coming up their move to Seattle would mean a bigger deal. Also the owners trying to move the team are the kinds of owners the NBA wants. Maybe the biggest elephant in the room is the negotiated deal between the Maloofs and the Hansen group. The owners will not be keen on interfering and risking legal action while limiting their own options in the future.

    The best chance Sacramento has is the NBA approving an expansion team for Seattle. It is doubtful they will approve one for Sacramento if the Kings move….too many unknowns and too small a market. Believe me when the NBA says it wants teams in smaller markets it is only lip service. They want the biggest markets and the fattest contracts….they are not governed by emotion or loyalty. The bottom line is all they care about. That and avoiding legal problems.

    With all my heart I hope I am wrong. I hope the NBA finally does the right thing and reward the loyal fans of Sacramento but after so many years of seeing the cold and predatory nature of professional sports ownership I am not too optimistic….but I do wish Sacramento luck….

  7. Justin McElhaney

    it doesn't matter what Cook wants to do he is a minority owner in fact Cook and the rest of the owners can't do anything for the simple fact is the Maloofs own 64% which gives them complete control and if they sell their 64% to someone else then that person will have complete control and if they want to move the team they can without even consulting the other owners and the City and or the League cannot tell the Maloofs who they have to sell too, secondly the City doesn't own the team AND the Kings don't have a lease agreement for the arena because the Kings are partial owners of the arena(hence no lease agreement)..Johnson and the City can try all they want there is nothing they can do to keep the team in Sacramento but unfortunately the law is on the Maloofs and Hansen and Ballmers side.