Why is this man smiling?
Imagine for a second that your job is being a commissioner of a sports league. Your job is to promote the league, expand it’s worldwide reach, and really increase the values of the 30 businesses in your league. This is David Stern’s job. The NBA commissioner is nearing the end of his tenure but his league is flourishing, and last week has to be the best week of his career.
So you wake up Monday after hearing rumors of one of your league’s weakest franchises being sold overnight. As you get up and start drinking your coffee and eating your morning breakfast you get the official paperwork. A $525 million dollar valuation for one of the NBA’s weakest performing teams. $525M for the Sacramento Kings? Sweet! Also the transaction would get rid of your league’s worst owners, our friends the Maloofs (See visiting the North Korea of the NBA) and replace it with a hedge fund billionaire and the CEO of Microsoft. Great!
Not only are these all great things for Mr. Stern but the way franchise values work this is a great development for every one of the other 29 NBA owners. If the lowly Sacramento Kings are worth $525M how much are the World Champion Miami Heat worth? Lakers? Brooklyn Nets? In hip hop they call that #cashinout. High fives all around.
THE SACRAMENTO SITUATION
The only dark cloud over this development is the fact that the new owners will to relocate the team to Seattle. This is a mixed bag as you regain a loyal NBA market that was robbed by a nefarious owner but, you lose an arguably stronger fan market in Sacramento that has been fleeced by the Maloof family.
It really wouldn’t be a bad thing for the city of Sacramento to fight to keep the NBA, this shows that cities value the league and desire to keep their teams, further driving up franchise values and willingness for public financing of large basketball arenas. But someone has to step up.
THE PLAYER TURNED POLITICIAN
That someone is Kevin Johnson.
Okay, now imagine a former player in your league turned local politician as the charismatic leader to organize the masses, the local partners, and the BIG MONEY in Sacramento to put a bid together to save the team for the city. I mean what other sports league has a story like this? If you as Stern ever want a story of how the NBA is not just a successful money making operation but also a path for young men to turn into future leaders, Kevin Johnson is your man.
You grant this man a chance.
So you have a former NBA star fighting to create a bid for even more money for said under performing franchise and an ongoing saga on how this will play out. Again, more money in everyone’s pockets. The ultimate decision lies in the hands of the owners of the franchises.
THE RIGHT PATH
If KJ is able to put the pieces together and have a bid ready for Stern and the NBA owners in April, Stern will face a question. Abandon Sacramento for the bigger, greener pastures of Seattle or turn away the billionaire dream team of Hansen and Ballmer? Neither way to go is right, and in addition both options cost the owners money in one way or another.
With the changed economics of the league and the increased franchise values the only solution to this (still hypothetical) question is to expand. Expand by one team and bring the Sonics back to the NBA. Broker a deal for Hansen to sell his stake of the Kings to the local owners and grant him a full stake in a Seattle expansion franchise for the $525M valuation.
Seattle is back in the league with a fresh start, Sacramento keeps the team it fought so hard for, and the owners in the league get more money. Everyone wins.