The Maloof family has agreed to sell the
Sacramento Kings to hedge fund manager Chris
Hansen and Microsoft CEO Steve Ballmer for $525
million, plus a relocation fee that will likely be well
in excess of $30 million, according to my sources
familiar with the transaction. A last ditch effort
by Sacramento‘s mayor Kevin Johnson to keep the
NBA team in the city failed because he could not
assemble a group of investors fast enough.
The $525 million price for the Kings is the second-
most ever paid for an NBA team. In 2010 Ted
Leonsis bought the 56% of the Washington Wizards
and Verizon Center he did not already own for an
enterprise value of $551 million. The most ever
paid for a basketball team without an arena was
$450 million for the Golden State Warriors shortly
after the Wizards deal.
The billionaire Ballmer and rich Hansen can simply
write a check to the Maloofs, whose casino
business and basketball team are highly leveraged.
Ballmer and Hansen will move the team to Seattle
and play in KeyArena for two seasons before
moving into a new, state-of-the-art arena that will
cost $490 million. When the relocation fee is
factored in, the final price for acquiring the Kings
will be around $600 million.
In addition, by moving to Seattle the Kings will get
a richer local television deal. Seattle’s metro area
population is 3.3 million, more than a million
people more than Sacramento.
A year ago we valued the Kings at $300 million. But
the new arena, which will be run by Ballmer and
Hansen, will add tens of millions of dollars a year
from premium seating, sponsorship and non-NBA
events that the Kings currently do not get at Sleep
Train Arena. In addition, there is the possibility of
an NHL team eventually moving into the arena,
which would add more money to the pot.