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Ball Don't Lie

Prospective Kings buyer and Seattle owner Steve Ballmer is reportedly frustrating the NBA

Eric Freeman
Ball Don't Lie

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Steve Ballmer lectures Ryan Seacrest about a phone (Kevork Djansezian/ Getty).

The fight for the Sacramento Kings is reaching a fever pitch. After the NBA's relocation committee unanimously recommended the Kings stay in Sacramento, the group of Seattle owners led by hedge fund manager Chris Hansen and Microsoft CEO Steve Ballmer (along with current Kings owners Joe and Gavin Maloof) has made efforts to ensure that they end up with the franchise. The Seattle group reportedly has a backup deal in place with the Maloofs to gain a minority stake and eventually move the franchise, in case their existing deal is denied when the Board of Governors votes on it Wednesday. (Never mind that Hansen and Ballmer have proposed so many different plans that it's now unclear exactly what the BOG is voting on.) It appears that Hansen and Ballmer are willing to pursue every possible lead in buying the Kings, and it's unclear what could inspire them to give up their quest.

It appears that those efforts may now be rubbing up against the league's typical standards of comportment and professional respect. As reported by Aaron Bruski for ProBasketballTalk, several league officials are getting tired of Ballmer's manner and methods as he attempts to lock down his purchase of the Kings:

But now that Seattle’s advances have been rebuffed by the NBA, sources say it’s Ballmer that has taken on a larger role in decision-making for the Seattle ownership group. The polar opposite of the soft-spoken hedge fund manager in Hansen – Ballmer is known for being loud and outrageous. Vanity Fair ran a seething piece (Microsoft’s Lost Decade) last August detailing a violent incident and more.

Now that Ballmer has taken on a larger role with the Seattle group, league sources tell PBT that the same bravado he has employed with Microsoft is turning heads at the league office – and not in a good way. It’s no secret that Ballmer is a handful — but a well-connected and filthy rich handful that the NBA would love to have in its stable. At least that was the case. According to league sources speaking to PBT under condition of anonymity, the recent power plays made by Seattle and the Maloof family have “started to weigh on the NBA to the point where any Ballmer-led proposal now or in the future could fall on deaf ears if he doesn’t change course.”

When asked to clarify, the source said that should the Seattle group continue to pursue a scorched earth policy with the Sacramento marketplace, they would jeopardize the city’s ability to secure an NBA team down the road should an opportunity present itself. [...]

“He’s on a rampage,” said one source. “He assumed he could backdoor Sacramento with a willing partner in the Maloofs, but he underestimated Sacramento and now he thinks he can twist enough arms around the league to force his way into the association.”

It's worth reading the full report because Bruski provides several details on exactly how Ballmer is upsetting the league. In short, the idea is that he and his group are attempting to create a bidding war by changing the terms of the sale whenever it suits their interests. There are several problems with that approach, but the specific issue appears to be that Ballmer has more interest in figuring out a way to engineer a sale than in viewing the NBA as a long-term business partner to be worked with on a personal, friendlier way. The prospective Sacramento ownership group, by contrast, is working very closely with the league and has their full support (this is by necessity, obviously, since the Maloofs seem hellbent on selling for as much money as they can get, i.e. to Hansen to Ballmer).

It seems highly likely that Bruski's report is not merely news, but part of an effort on these sources' part to paint Ballmer in a negative light and perhaps shame him into being less forceful. The suggestion that he is jeopardizing Seattle's long-term NBA viability is not a minor one — it's basically a threat. As usual, the personal politics of the sale are playing out in public.

Yet, while there are ulterior motives in leaking this information, that doesn't mean there aren't broader points to be derived from it. The basic idea of this threat to Ballmer is that his actions have long-term consequences, whether that involves the inability of Seattle to get a team or the foiling of his personal attempts to become an NBA owner. The same can be said of the Seattle group's entire plan to get this team, too. While their circumstances allow them to bid exorbitant sums for the Kings, it's typically the case that the sale price of one franchise affect the future valuations of all NBA teams. It's nice to think that the market plays by fully logical rules and can acknowledge that these circumstances are special, but the course of a sale usually proceeds more irrationally (as we're seeing now).

In attempting to build the best offer, Hansen and Ballmer have created several dangerous precedents, some of which may become irrelevant if they are denied. Yet, if we assume that they do eventually get the Kings, it's hard to know how their actions will forge the next path for prospective owners. Will buyers attempt to deal solely with unhappy owners and bend the league as a whole to their desires? Will franchise valuations submit to the logic of financial analysis or the whims of billionaires who really, really want a team? Will that price out local owners in certain markets? There are many ethical questions such as these that deserve to be asked whenever a buyer emerges for a franchise. When we don't ask them and focus on the specifics of a sale instead — i.e. should the league bring this rich person into the fold regardless of his effect on the current system of ownership just because that rich and powerful? — there's a tendency to effect the long-term state of the league in pursuit of a short-term reward. A lack of foresight can create unintended consequences, many of which get sorted out with work stoppages that place the onus of responsibility on the players' union.

This argument is perhaps a little too strong, because the vast majority of new owners enter the NBA with little controversy. Yet, in the case of the Kings, even what the majority assumes to be the morally correct outcome could have a bad effect on the league because of this sale has proceeded. As Hansen and Ballmer added to their offer, the Sacramento group countered some of their key arguments by promising not to accept their full share of revenue sharing money should they fall into that group of franchises. (Hansen, in something of a response, promised that the new Sonics would pay into the revenue sharing fund on a permanent basis.) Put bluntly, this promise is a perversion of the goal of the revenue sharing system, an attempt to make the Kings more attractive to the NBA system by rejecting the rules of that system. Once again, the pursuit of a certain goal can have a drastic impact on the future of the league.

Whether or not Ballmer actually deserves this public shaming of his methods, the fact is that the NBA has made a very good point (inadvertently or not) about the ways in which short-term tactics affect circumstances over time. The personal actions of powerful men often have very public consequences.


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