Sacramento Mayor Kevin Johnson tells the story of how the city kept the Kings

KingKong

Starter
Sacramento Mayor Kevin Johnson tells the story of how the city kept the Kings

By Dale Kasler, Tony Bizjak and Ryan Lillis

It looked like Mayor Kevin Johnson's three-year campaign to save the Sacramento Kings was ending in defeat. Even the man running the NBA thought so.

But the mayor was cooking up a counteroffensive. Long before the news broke Jan. 9 that the Maloof family was negotiating to sell the team to investors from Seattle, Johnson was gathering intelligence from NBA insiders and consulting with advisers.

More: http://www.sacbee.com/2013/06/15/5498635/sacramento-mayor-kevin-johnson.html
 
Last edited:
diminutive executive? wonder how well that will sit with V ;) all kidding aside, this is a brilliant, brilliant article with a lot of the insight into the things that happened this year. thanks for posting it.
 
Nice article. One word of warning, however. Don't bother to read the comments. ;)
 
I still don't understand the business reasons why the owners wanted to pay the 535 valuation (which dropped after acquiring the additional 7%), but maybe 20 years from now teams will be going for +1 billion
 
I still don't understand the business reasons why the owners wanted to pay the 535 valuation (which dropped after acquiring the additional 7%), but maybe 20 years from now teams will be going for +1 billion

They didn't want to do it but realized that they had to up the offer a little bit to get the Maloofs to close the deal. They realize that they are taking a risk but also know that this market has shown what it's potential is when things are going good. In their minds, the potential reward outweighs the risk.
 
I still don't understand the business reasons why the owners wanted to pay the 535 valuation (which dropped after acquiring the additional 7%), but maybe 20 years from now teams will be going for +1 billion
I think you answered your own question.

As long as you can afford the operating expenses, then if you believe the team will likely be worth even more down the road, you'll see it as a good investment despite the inflated price.
 
They didn't want to do it but realized that they had to up the offer a little bit to get the Maloofs to close the deal. They realize that they are taking a risk but also know that this market has shown what it's potential is when things are going good. In their minds, the potential reward outweighs the risk.

Exactly. Especially when they're talking about so much more than just a team and an arena. It's the revitalization of a whole city, and they're in on the ground floor.
 
I still don't understand the business reasons why the owners wanted to pay the 535 valuation (which dropped after acquiring the additional 7%), but maybe 20 years from now teams will be going for +1 billion

This may sound harsh, but for people who don't see the value of the francjise even at that price, in Vivek's hands, it almost seems to me one would have to be willfully ignorant.

I really don't know how many times it needs to be said: globalization. A billion Indians where bball is second biggest and fastest growing sport, with no major league. And all of that is aside from the undertapped local market, couple all of that with the social marketing and software genius possessed by the ownership group... And I'm having a hard time understanding why people are questioning the valuation.

Maybe the difference is in understanding the enormous value of social networks in today's economy. This is not a tv and newspaper world anymore. Tv is still very valuable, but there are sooo many other new ways to engage the fanbase, deliver value, and capitalize on that. Th oí s is just the first time Silicon Valley has got it's hands on a major pro sports team.
 
Last edited:
This may sound harsh, but for people who don't see the value of the francjise even at that price, in Vivek's hands, it almost seems to me one would have to be willfully ignorant.

I really don't know how many times it needs to be said: globalization. A billion Indians where bball is second biggest and fastest growing sport, with no major league. And all of that is aside from the undertapped local market, couple all of that with the social marketing and software genius possessed by the ownership group... And I'm having a hard time understanding why people are questioning the valuation.

Maybe the difference is in understanding the enormous value of social networks in today's economy. This is not a tv and newspaper world anymore. Tv is still very valuable, but there are sooo many other new ways to engage the fanbase, deliver value, and capitalize on that. Th oí s is just the first time Silicon Valley has got it's hands on a major pro sports team.


I think you've mentioned the India connection in some other threads that dealt with personnel,front office, relocation or other issues.. There is no right or wrong, its subjective at this point, but some feel as though vivek's ethnicity or where he was born will not differentiate this franchise to the average Indian on the street the way a star player of Indian origin might. Kind of like it, can be argued, most Americans don't follow English Premier League teams owned by Americans, but might follow Dempsey. I'm not an investor but I do know some of the reasons why some would potentially pay that valuation (the exponential increase of valuation throughout the years of sports franchises, revenue sharing, the dollar being worth less in the future for various economic reasons, etc.).. I just wonder what the investors individual angles are out of curiosity, since it is such an over-valuation of what this franchise was considered to previously be at
 
Last edited:
I think you've mentioned the India connection in some other threads that dealt with personnel,front office, relocation or other issues.. There is no right or wrong, its subjective at this point, but some feel as though vivek's ethnicity or where he was born will not differentiate this franchise to the average Indian on the street the way a star player of Indian origin might. Kind of like it, can be argued, most Americans don't follow English Premier League teams owned by Americans, but might follow Dempsey. I'm not an investor but I do know some of the reasons why some would potentially pay that valuation (the exponential increase of valuation throughout the years of sports franchises, revenue sharing, the dollar being worth less in the future for various economic reasons, etc.).. I just wonder what the investors individual angles are out of curiosity, since it is such an over-valuation of what this franchise was considered to previously be at

While his being from India may or may not help in that respect, his drive and desire to put the NBA into India and make basketball the number 2 sport there is HUGE. That might be the difference. Him being from India is just the catalyst for that drive and desire.
 
Exactly. Especially when they're talking about so much more than just a team and an arena. It's the revitalization of a whole city, and they're in on the ground floor.

This too. I often tell people who aren't close to the situation how important it is to have owners who value the community. The Kings had 8 straight playoff seasons with owners who turned out to be pretty indifferent. Imagine the possibilities with an ownership group that actually cares about seeing downtown and the city in general grow to a place that it has never seen before.
 
I think you've mentioned the India connection in some other threads that dealt with personnel,front office, relocation or other issues.. There is no right or wrong, its subjective at this point, but some feel as though vivek's ethnicity or where he was born will not differentiate this franchise to the average Indian on the street the way a star player of Indian origin might. Kind of like it, can be argued, most Americans don't follow English Premier League teams owned by Americans, but might follow Dempsey. I'm not an investor but I do know some of the reasons why some would potentially pay that valuation (the exponential increase of valuation throughout the years of sports franchises, revenue sharing, the dollar being worth less in the future for various economic reasons, etc.).. I just wonder what the investors individual angles are out of curiosity, since it is such an over-valuation of what this franchise was considered to previously be at

The value of the franchise is what someone is willing to pay. It's really that simple. The investors who were willing to buy in at the higher price are obviously convinced they're getting value for their money. Several of us are pointing out a variety of reasons we think this is so, but you never seem to accept them. Bottom line, they've wagered their money on Sacramento's potential for the future AND for the future of the NBA in previously untapped markets. With Vivek Ranadive as oiur owner, one of those untapped markets becomes much more feasible because of his connections there. And, in case you didn't realize it, we actually have TWO more Indian owners, meaning there could be significant ties to that country.

The Ranadive team includes two more India-born businessmen, the founding family of telecommunications giant Qualcomm Inc. and prominent downtown Sacramento developer Mark Friedman. There's a former senior executive from Facebook and a couple of tech entrepreneurs from the Bay Area. Ranadive himself is chief executive of Tibco Software Inc., a $1 billion-a-year Palo Alto company.

Read more here: http://www.sacbee.com/2013/05/17/5429834/kings-new-ownership-group-kicks.html#storylink=cpy

Here's a list of all the owners:
■Vivek Ranadive - – Tibco Software Inc. of Palo Alto has revolutionized the use of data at such companies as eBay and Southwest Airlines. Since 2010, he has brought data-driven expertise to the NBA as vice chairman of the Golden State Warriors.
■Three Jacobs brothers of San Diego – whose family founded Qualcomm Inc., which makes telecommunications equipment – would become vice chairmen of the Kings, rotating that post.
■Raj Bhathal (announced Wednesday) – Owner of RAJ Manufacturing, based in Tustin, which makes such swimwear brands as Hurley, Reef, Nautica and Guess.
■Arjun Gupta, a venture capitalist with offices in India and Menlo Park
■Mark Mastrov, founder of 24 Hour Fitness chain
■Andy Miller, a tech entrepreneur in San Francisco, president and chief operating officer of Leap Motion, a motion-control hardware and software company. He also is co-owner of the Modesto Nuts minor league baseball team.
■Chris Kelly, an attorney, Facebook alumnus and political activist who ran for state attorney general in 2010
■Mark Friedman, Sacramento developer who specializes in urban projects. He would be the liaison between JMA Ventures, owner of the Downtown Plaza, and the city.
■Katrina Garnett, Silicon Valley entrepreneur and investor. Her newest venture is My Little Swans, a social network dedicated to high-end family travel and lifestyle.
John Kehriotis, David Lucchetti and Benvenuti family.
 
I still don't understand the business reasons why the owners wanted to pay the 535 valuation (which dropped after acquiring the additional 7%),

It's called philanthropy. There are super wealthy people out there that like to use their money and influence for the greater good or for what they deem to be a nobel purpose. Vivek has stated several times that keeping the Kings in Sacramento was the right thing to do and he had the ability and willingness to help out. While Vivek and his partners are sure to try to make $$ back on their investment, they didn't get involved solely to make money.

In fact, most owners don't own a team with the intent of making much money from it. A majority of owners lose money each year and write off the losses. Unlike the former owners of the Kings, they don't depend upon their sports franchise as a major means of income.
 
It's called philanthropy. There are super wealthy people out there that like to use their money and influence for the greater good or for what they deem to be a nobel purpose. Vivek has stated several times that keeping the Kings in Sacramento was the right thing to do and he had the ability and willingness to help out. While Vivek and his partners are sure to try to make $$ back on their investment, they didn't get involved solely to make money.

In fact, most owners don't own a team with the intent of making much money from it. A majority of owners lose money each year and write off the losses. Unlike the former owners of the Kings, they don't depend upon their sports franchise as a major means of income.

Exactly! Pro sports franchises are mostly a hobby and bragging rights for super rich owners. Many are also known to collect lots of fancy cars, lots of big mansions, and even trophy wives/girlfriends. Very, very few view any of this stuff as an investment like they see their lucrative primary business. Only around half dozen or so NBA teams turn an actual profit and most not very much - of course when they sell maybe that's when they cash in - but considering the yearly loses sometimes not that much.
 
It's called philanthropy. There are super wealthy people out there that like to use their money and influence for the greater good or for what they deem to be a nobel purpose. Vivek has stated several times that keeping the Kings in Sacramento was the right thing to do and he had the ability and willingness to help out. While Vivek and his partners are sure to try to make $$ back on their investment, they didn't get involved solely to make money.

In fact, most owners don't own a team with the intent of making much money from it. A majority of owners lose money each year and write off the losses. Unlike the former owners of the Kings, they don't depend upon their sports franchise as a major means of income.


Which is what I assumed by the question.. First, I am grateful for this consortium to come together when we were on the brink of losing our team. As a fan, I feel indebted, and want to see them succeed on this financially because I don't want them losing any cash saving our azzes. There are some folks in this group who I wouldn't think are in a position to lose a lot financially. But I don't think they anticipate loss, as can be seen by Vivek's promise that we won't need any supplemental revenue sharing once in our new arena. I think it is both, investment and philanthropy.. If guaranteed loss I don't know if the investors would be here
 
Vivek will make million dollar software deals while taking clients to games. If the team is not a perrennial competotor and gunning for championships, it won't reflect well on tibco. This is why I'm so confident he'll be doing whatever it takes to build a winner.

The new arena, with all its gadgetry, will be one giant technology store.
 
Last edited: