Ron Burkle Rumors
The duration of the process – coupled with the fluidity of the Sacramento group that includes Vivek Ranadive, Mark Mastrov, Paul Jacobs and Mark Friedman that has yet to deliver a formal bid – prompted the Maloofs on Wednesday to leak the ultimatum about today’s deadline. On Thursday, the sources said: • An agreement that keeps the Kings in Sacramento must include reimbursement to Hansen for his $30 million nonrefundable deposit. • Before being completely surprised by the size of the Hansen/Ballmer offer, the Maloofs had rejected overtures from Ron Burkle and Larry Ellison. Ellison would have attempted to relocate the Kings to San Jose.
Structural changes to the group intending to purchase and keep the Kings in Sacramento won’t affect the city’s non- binding contract to build a new arena. That according to city manager John Shirey, who spoke to reporters at city hall today following the introduction of Mark Friedman to the prospective ownership team led by Vivek Ranadivé. Shirey says he consulted with city attorney James Sanchez on the matter. According to the city manager, Sanchez explained to him that the term sheet city council approved two weeks ago with a 7-2 vote doesn’t need to be adjusted because “the fundamental issues, all the terms, they don’t change.”
Following the announcement of the Seattle deal, they were first to step up publicly in the effort to keep the Kings in Sacramento. Now a group of local investors is seeing its role change in the capital city’s fight to retain its only major pro franchise. The group of 20-plus local investors assembled by mayor Kevin Johnson back in January is now part of the major bid led by Vivek Ranadivé to purchase the team from the Maloofs. “We are now part of the general partnership,” said real estate executive Phil Oates, one of the investors pledging $1 million each in the effort to buy the Kings. “The percentages still have to be worked out. But we share, on a much smaller level, in their (the major equity investor’s) profits.”
Sacramento Mayor Kevin Johnson has announced a new investor to help fill the role vacated by billionaire Ron Burkle in the city’s bid to keep the Kings from moving to Seattle. Johnson said at his weekly news conference Tuesday that Sacramento developer Mark Friedman has joined the group. The announcement comes a day after Burkle backed out because of a conflict of interest stemming from his ownership stake in Relativity Sports, which manages some NBA players’ careers.
Friedman’s emergence comes one day after Mayor Kevin Johnson revealed that Southern California billionaire Ron Burkle had to reduce his role in the project because of a conflict of interest. Johnson hinted at a press conference Monday that there might be additional changes in the ownership structure. But Friedman said he’s been contemplating jumping into the Kings bid for a while. “I’ve been talking to Vivek (Ranadive) and Mark Mastrov for a couple of months,” Friedman said, referring to the lead investors in the bid for the Kings.
Speaking at a press event at the Downtown Plaza this afternoon, Johnson stated that Burkle’s changing role has no effect on the structure of the deal to build a new arena at the mall. “We knew that this was flagged early,” Johnson said. ”We were trying to work our way through it in New York when we spoke to the NBA owners. We addressed this issue. They felt very comfortable with our answer. “One of the issues was if Ron could stay in – great, we’ll move forward,” he continued. ”If he can’t, then Vivek (Ranadivé) is going to lead that charge both on team and the arena and we won’t miss a beat. And they were comfortable with that.”
With the fate of the Sacramento Kings remaining uncertain and 10 days left before NBA officials meet in New York yet again to deliberate on Seattle’s bid to buy and relocate the team, there has been a change to the incumbent city’s plan to keep its team. NBA spokesman Mike Bass confirmed that supermarket mogul and part owner of the NHL’s Pittsburgh Penguins, Ron Burkle, is no longer part of the group that is attempting to buy the team and keep it in Sacramento because of a conflict of interest. “Ron Burkle is no longer part of the Sacramento group because his ownership interest in Relativity Media, which has a division that represents NBA players, would violate NBA rules,” Bass said.
In a contrast of post-presentation news conferences, the Seattle group was subdued and the Sacramento group was fired up. “The NBA does not want to move a team from one market to another, period. We already know that,” said Sacramento Mayor and former NBA player Kevin Johnson, who represented the Sacramento group along with Sen. Darrell Steinberg and financial backers Vivek Ranadive, Mark Mastrov and Ron Burkle. “They normally move a team from one market to another when the fans don’t support it or you can’t build a building. That’s not the case in Sacramento.”
There was supposed to be a Ron Burkle sighting at The Bee on Monday, and then there wasn’t. The mystery man canceled his appearance a few hours before the 2 p.m. tipoff, offered no reasons and remained true to his reputation within the arena of professional sports. The Pittsburgh Penguins’ billionaire co-owner – one of four investors involved in the proposed $447.7 million downtown entertainment complex and attempts to purchase majority interest in the Kings – is only occasionally seen and rarely speaks.
Add another investor to the group Sacramento Mayor Kevin Johnson is assembling to keep the Kings from moving to Seattle. Johnson announced Monday night that Paul Jacobs, CEO of the international technology company Qualcomm, has agreed to become part of the Sacramento bid. Jacobs joins a group that includes billionaire investor Ron Burkle, 24 Hour Fitness founder Mark Mastrov and TIBCO Software CEO Vivek Ranadive. “A true Dream Team! This Fab Four is a bracket buster,” Johnson wrote on Twitter.
The City of Sacramento checked off a major box in its fight to keep the Kings today. Sacramento Mayor Kevin Johnson announced via Twitter that an agreement has been reached with the Ron Burkle/Mark Mastrov/Vivek Ranadivé group to build a new downtown arena. “It’s a great day in Sacramento!!!!!,” Johnson said, beginning a string of tweets. “I’m pleased to announce an agreement w/ Burkle-Mastrov-(Ranadivé) group on a public-private partnership to build a new ESC at (Downtown) Plaza Mall. Consistent (with) our core tenets, the deal avoids new taxes, protects the City on the Kings loan, and ensures no net impact to the general fund”
After Sacramento Mayor Kevin Johnson announced that a deal was reached to build an arena in Downtown Sacramento, he tweeted a picture of himself on the phone and fist pumping. In response, Kings fans tweeted pictures of themselves, “#KJing”
Between the proposed purchase of the team, the investment in the downtown plaza arena and related real estate development around the site, Ranadive, Mastrov and Burkle will be investing nearly a billion dollars. While the specific figure of the offer for the team is not yet known, $190 million of the investment is in the arena. That sum is $58 million more than the $132 million put forth by the NBA and the Maloof family that owns the team in a 2012 arena deal that would have put the arena in the city’s railyards but fell apart when the Maloofs were no longer comfortable with the handshake agreement.
According to Johnson’s tweets, the new ownership group is ready to invest up to a billion dollars in the region in the transaction, which includes a deal to purchase the Kings, build a new entertainment and sports center and lock into a new 35-year agreement to keep the team in Sacramento. According to multiple reports, the new deal is for an estimated $448 million and includes a private investment by the Burkle/Mastrov/Ranadivé group of $190 million for the arena in the Downtown Plaza. The City of Sacramento is putting up an estimated $258 million by leasing its downtown parking assets to a private operator and selling city owned land parcels as well as an arena surcharge for users.
Vivek Ranadive, an Indian-born software tycoon who lives in Silicon Valley, was unveiled as the man who will lead the bid for the team itself. Already a part owner of the Golden State Warriors, he takes the reins from East Bay health-club financier Mark Mastrov. A source familiar with the situation said Mastrov – whose initial bid was described as inadequate by the NBA – will remain a major partner in the bid. The third investor in the Sacramento effort, Beverly Hills billionaire Ron Burkle, was continuing to negotiate a deal with city officials on a new arena at Downtown Plaza. But in a somewhat unsettling development for the city, officials were unable Thursday to complete the so-called term sheet outlining the city’s subsidy and other elements of the deal. The document was supposed to be released to the public in the afternoon.
The NBA has joined the discussions to build a new entertainment and sports center in Downtown Sacramento according to city manager John Shirey. The information came to light in this week’s Sacramento Kings’ update at yesterday evening’s city council meeting. “I want to let everybody know that we believe the talks are progressing well with the investor team (of Mark Mastrov and Ron Burkle),” Shirey told members of council. “I wanted to also let you know that we are also now discussing issues with the NBA. They are doing their own due diligence work, wanting to assure that our investor team and the city can deliver on a new arena downtown. So our discussions have broadened somewhat in the last few days.”
The city is expected to vote on an arena term sheet on March 26th, just eight days before the NBA’s financing and relocation committees convene in New York for a special meeting on April 3rd. Shirey indicated that the outline of the proposal to build a new ESC at the Downtown Plaza could be ready for council and public review as early as next Thursday, March 21st. “Everybody knows that we’re under a very tight timeframe to get all this work done,” Shirey said. “But we’re not going to short-change the agreement.”
Think Big Sacramento, the regional initiative focusing on building a new downtown arena, released a report today detailing the strength of the capital region’s professional sports market. “Today’s report provides further proof that, pound for pound, Sacramento is one of the strongest and best performing markets in the NBA,” said Kunal Merchant, Executive Director of Think Big in a statement accompanying the “Home Court Advantage Report”. “Whether measured by fan support, corporate support, or media market reach, Sacramento has proven to be a model for what a one‐team NBA market can be, should be, and is.”
Sacramento officials today stepped up their public relations campaign to keep the Kings from leaving, saying the city is a better NBA market than Seattle. Mayor Kevin Johnson’s Think Big Sacramento task force unveiled a barrage of statistics to bolster its argument that the city has been more supportive of the NBA than Seattle fans when the SuperSonics were in the league. The report comes four days after investors Mark Mastrov and Ron Burkle gave the NBA their bid to buy the Kings and keep the team in Sacramento. The bid is a counter-offer to the deal the Maloof family, owner of the Kings, made in January to sell controlling interest to investors from Seattle.
Burkle and the city have agreed on a deal to construct a new arena in the city’s downtown. Johnson recruited $20 million in local investors to purchase 7 percent of the Kings’ ownership stake available in bankruptcy court, as well as $50 million in business sponsorships over the next five years for the franchise.
The proposed bid of 24-Hour Fitness founder Mark Mastrov and billionaire Ron Burkle to purchase the Sacramento Kings and construct a downtown arena has a chance to challenge a Seattle ownership’s group to move the franchise. Mastrov and the local investors’ bid is “slightly lower,” than the $341 million that the Chris Hansen-Steve Ballmer group has agreed to pay for the available 65 percent of the Kings, a high-level source involved in the talks told Yahoo! Sports on Thursday night. “They have a shot,” the source said. “It’s still a long shot, but the bid will be close enough to cause real debate.”
City officials have also said the public contribution to the proposal could include land sales, surcharges placed on tickets for events at the arena and assessments paid by property owners near the arena. Asked if Burkle was confident he could fill the gap between what the city can commit to an arena and the final price tag, a source said “that is not going to be an issue.” The source said Burkle has limited partners in the deal, a group that could include celebrities and former professional athletes.
While the amount of the Burkle and Mastrov bid was not revealed Thursday, the mayor said it would be “very strong and competitive.” Seattle hedge-fund manager Chris Hansen and Microsoft executive Steve Ballmer have a binding agreement with the Maloof family to buy the Kings in a deal that values the franchise at $525 million, or about $341 million for the 65 percent they control. A source familiar with the Mastrov offer said it’s expected that the NBA will look over the proposal and forward it to the Maloofs, who have the right to “entertain” other offers as backups in case the NBA rejects the Seattle bid. Beyond that, the process isn’t quite clear. “It’s not like there’s a manual for how to do this,” the source said. “This is somewhat unprecedented in the history of the league.”