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The NBA and The Art of Civic Arm Twisting

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The NBA has a very interesting strategy for getting what it wants. Seattle went through this when the Oklahomans came to town and bought the Seattle Supersonics, and the ownership told Seattle they had better build a stadium or else. Now the Sacramento Kings ownership, with the support of the NBA, is threatening the same thing to Sacramento.

If you recall in the Seattle case, when local owner Howard Schultz owned the team, he said he may have to move the team if he didn’t get a new stadium. Since he was a local owner,  his threat was not credible enough to local leaders – and he got nowhere. So the NBA steps in, facilitates a deal with the Oklahomans  to provide more muscle behind the threat to build a stadium or they will leave.  Seattle politicians declined and the team moved to Oklahoma to play in the brand new publicly funded arena.

This is playing out again with a slight variation – the Seattle billionaires trying to join this game got the local politicians to agree to help build a new stadium in Seattle, and then they went shopping for team that didn’t have a new stadium.  This time, it played out a little differently – as  in this case, Sacramento caved and the Kings got a deal to get an arena.   Here is the deal Sacromento agreed to:

The city will put $258 million in value into the deal, mainly by bonding against its downtown parking garage future revenues, and by selling several downtown parcels to developers. The development team will put $190 million into the deal.

So if this deal stands, the owners and the league will get more luxury boxes, and more income will flow into the NBA. Sounds like everybody will live happily ever after, except for perhaps the Sacramento taxpayer.

So now what is the  Seattle ownership contingent to do.  It’s possible the NBA will expand by two teams and Seattle would get an expansion team.  Even though I think the NBA is too weak right now to expand the league, in this era of zero interest rates and asset bubbles all over the place, there are likely lots of billionaires that would through money into this profitable arm twisting game.  And I am sure the NBA owners would welcome hundreds of millions of dollars to allow adding two more members of the club.

However, my prediction is that the Sacramento Kings will stay put in Sacramento, and the NBA will work with the Seattle contingent will go to the next town that the NBA has determined needs a new stadium or new lease agreement, and the arm twisting will begin anew.

Eventually some city will say no – and Seattle will get its team.

 

 

 

April 6, 2013 Dan

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One thought on “The NBA and The Art of Civic Arm Twisting”

  1. Noreen Wise says:
    April 9, 2013 at 6:13 pm

    Twice we voted no on stadiums…but billionaries hold us hostage,along with the city,better Sacramento taxpayers than us…billionaries have soooo much money why don’t they pay for the whole stadium? and while you’re at it can you explain the Seattle Public School program which teachs minorities to apply for contracts..what happened to reading, writing and arithmatic

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