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October 21, 2018

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Maloof family and Sacramento investors reach deal for Kings

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From Left, Colleen Maloof, Gavin Maloof, Adrienne Maloof and George Maloof sit courtside as the Sacramento Kings take on the Los Angeles Lakers during an exhibition game at the Thomas & Mack Center Monday, October 23, 2000.

SACRAMENTO — The Maloof era in Sacramento, at times spirited and uplifting, at times dismal and depressing, appears to have come to an end.

A Sacramento investors group has reached a deal with the Maloof family to buy the Kings for an NBA record valuation of $535 million, a source has told The Sacramento Bee.

The agreement, reached Thursday, is expected to be announced sometime Friday, the source said. If the NBA approves the deal, escrow is expected to close at the end of May.

The source, a stakeholder close to the deal, said the Maloof family was eager to “turn the page” and was pleased it was able to sell to a group that will keep the team in Sacramento.

The source did not say why the price values the team at $535 million, rather than the $525 million figure the local group had offered. The sale price translates into $347 million for the 65 percent of the team controlled by the Maloofs.

Ranadive’s spokeswoman Leslie Moore could not be reached for comment, but was accepting congratulations Thursday night on Twitter. A spokesman for the Maloofs said he could not comment.

If the sale is, in fact, finalized and made public today, it will mark a dramatic end to a huge week in Sacramento, and what is being called a major victory for Sacramento Mayor Kevin Johnson, who has fought for two years to keep the team from leaving town.

Earlier in the day Thursday, Johnson said he believed a deal was near.

Speaking at Sacramento International Airport after returning from Dallas, where the NBA Board of Governors on Wednesday rejected a plan to move the Kings to Seattle, Johnson predicted a deal between Silicon Valley executive Ranadive and the Maloof family would “be close to being signed in the next day or two.”

“I’ll be surprised if we get past the weekend,” said the mayor, who was greeted by a small but loud group of Kings fans at Sacramento International Airport. “I feel very confident about that.”

A spokesman for the Ranadive group also said earlier Thursday the contingent was optimistic a deal would be completed.

“Everybody’s working very hard to finalize it and everybody is continuing to talk,” said group spokesman Adam Mendelsohn. “There is regular communication (between the sides).”

Speaking before a playoff game Thursday night in Oakland for the Golden State Warriors, Ranadive would provide no details on the negotiations to buy the Sacramento Kings.

“I’m feeling good about where things are,” said Ranadive, a part owner of the Warriors.

NBA Commissioner David Stern also attended the game, but was unavailable for comment. The commissioner spent several minutes in a VIP lounge inside Oracle Arena along with Ranadive and Johnson before the game started.

In Sacramento, sources said, Downtown Plaza owner JMA Ventures has begun the process of buying the Macy’s men’s store — space that could be used for the planned arena.

The Maloofs, who have waged several battles with local officials in their 13 years in Sacramento and previously reacted angrily to suggestions that they sell the team, appeared more conciliatory on Thursday.

Speaking by telephone, George Maloof — who opened the Palms in Las Vegas in 2001 and is the family’s final arbiter in its business dealings — said talks with Ranadive were “going fine.”

“These guys are good guys, I have a lot of respect for the people who are trying to buy the team in Sacramento,” Maloof said.

If a deal is approved, Ranadive’s group would buy the 65 percent share of the Kings controlled by the Maloofs and their business partner, Robert Hernreich. After absorbing debt associated with the franchise — including the repayment of a $64 million loan the team owes the city of Sacramento — Ranadive would pay roughly $200 million for the Maloof stake.

Ranadive has placed that purchase amount into an escrow account and has secured another $40 million to prove to the NBA he has the financial wherewithal to operate the franchise.

The India-born businessman would serve as managing partner for an ownership team that continued to swell this week.

Besides Ranadive, the group’s leadership includes the Jacobs family of San Diego, founder of communications giant Qualcomm. The three Jacobs brothers — Paul, Jeff and Hal — would serve as vice chairmen of the franchise on a rotating basis.

The other major player in the franchise would be Raj Bhathal, an India-born businessman and head of one of the largest swimwear companies in the United States. Bhathal was announced as a partner on Wednesday.

Mendelsohn said Thursday that the group also has added Silicon Valley entrepreneur Katrina Garnett, a native of Australia, whose latest venture, My Little Swans, is described as the first Internet social network dedicated to high-end family travel.

The investment group also includes 24-Hour Fitness founder Mark Mastrov, Sacramento developer Mark Friedman, attorney and former Facebook executive Chris Kelly, San Francisco tech entrepreneur Andy Miller and Arjun Gupta, founder of TeleSoft Partners, a venture capital firm.

Besides those large investors, about 20 local business leaders have chipped in $1 million apiece for the franchise purchase — bringing the total number of equity partners to 35.

John Kehriotis, one of the current minority owners, told The Sacramento Bee on Thursday he is delighted the team will stay in Sacramento, and said he intends to hold onto his shares. But, he said, he doesn’t yet know much about his potential new partners or their plans.

“I’d like to see who the partners are and how it is structured and what role everybody plays,” Kehriotis said. “This is extremely complicated. There is an enormous amount of people involved.”

NBA watchers say many NBA teams are owned by large groups of investors.

Mendelsohn said the diversity and size of the group are part of Ranadive’s vision for the franchise. “When the opportunity with the Kings presented itself, Vivek felt it was important to put together a world-class ownership organization that could take this franchise to the next level,” he said.

The group has already begun to gel. Last week, Ranadive hosted members of the contingent at his home in Atherton. After discussing business, some in the group took part in a 3-point shooting contest on a basketball court on Ranadive’s property (Hal Jacobs won that contest).

The group also is aligned with JMA Ventures, which owns Downtown Plaza. JMA Ventures has committed to being the master developer for the downtown site around the arena. The Ranadive group will focus on arena development, headed by Friedman.

Sacramento Assistant City Manager John Dangberg said the arena planning is moving forward smoothly and quickly with the new group. “They are taking it aggressively. This thing is moving.”

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