For months – even years – members of the Maloof family has said their NBA Sacramento Kings are not for sale. They reiterated that Friday when Sacramento and Ron Burkle made more overtures to buy the team.
They’re right. There’ is no Lyon Real Estate sign in front of Power Balance Pavilion. But as any good mergers/acquisitions lawyer knows, they can be sold with some pressure. Even pressure to keep the team from moving to Anaheim.
The Maloof family doesn’t own all of the Kings. According to Sam Amick of SI.com, they own 53 percent of the team. That’s a majority stake. However, there is a group of minority owners, some who have been with the team since it moved to Sacramento 26 years ago, that own the other 47 percent.
As majority owners in a private company (Sacramento Kings Limited Partnership), the Maloofs have a fiduciary responsibility to advise their minority owners whenever they receive a viable offer for purchase. It would be hard to believe that billionaire Ron Burkle wouldn’t offer above-market value.
Also, those minority owners are aware that the Maloofs are leveraged heavily in loans to the City of Sacramento ($77 million), the NBA (a $75 million from a line of credit offered to all teams a few years ago) and, possibly, another $70 million to new landlord Henry Samueli, who owns the Anaheim Ducks and runs that city’s Honda Center.
Those minority shareholders could put undue pressure on the Maloofs in a number of ways, including selling all of the remaining pie to a single investor like Burkle, who has promised to run the franchise the right way in Sacramento. After all, do the minority owners want to be part of franchise that is at least $151 million in debt?
This not some plot far-fetched plot out of the movie “Mr. Deeds” or “Trading Places.” This is basic business.
Burkle may or may not buy the Kings. He may or may not invest in a new arena for Sacramento. Whatever he does, he has put enough pressure to delay the NBA’s vote for the Maloofs’ relocation to Anaheim.
At this rate, he could pose become an even bigger pain to them when the Kings’ other shareholders ask the Maloofs what a prospective owner is offering. That’s when it will be tough for them to say “the team is not for sale” with a man like Burkle waiting in the wings.
NBA extends Kings’ deadline for relocation [CBS Sports]
