The NBA Board of Governors voted 22-8 Wednesday to keep the Kings in Sacramento and not to allow the team to move to Seattle.
The Kings' future in Sacramento has been in limbo as an ownership group in Seattle, headed by hedge-fund manager Chris Hansen and Microsoft CEO Steve Ballmer have pursued moving the Kings to the Northwest.
Last week, the Seattle group lead increased its offer for 65 percent of the Kings to a record $409 million from $358 million. It also offered a relocation fee payout of $4 million per team for a total of about $116 million.
While the proposed move to Seattle has been rejected, the issue of who will own the team remains very much in limbo.
The Maloofs told fellow owners if the team is not allowed to move to Seattle, they would sell a 20 percent share to Hansen's group and keep controlling interest in the team.
The Maloof family also had told the league they don't intend to sell the team to a group led by Silicon Valley billionaire Vivek Ranadive, even if the move to Seattle is blocked.
Ranadive has worked with NBA commissioner David Stern to keep the Kings in Sacramento and build a new arena there.
"We will talk to the Maloofs and seek in the next 24 to 48 hours whether we can help facilitate deal between the Ranadive group and the Maloofs for the sale of the franchise in Sacramento," Stern said of the Kings owners.
Sacramento Mayor Kevin Johnson, who has led the fight to keep the team in Sacramento, told the Sacramento Bee he was confident a deal with the Ranadive group could be completed.
"Sacramento will be changed forever - for good - because of what's transpired the last couple of days," Johnson said.
Ranadive agreed that a deal can be reached.
"We believe we can get this done very quickly," he said, according to the Bee.
On Wednesday, Kings co-owner George Maloof sounded as though he could work with Ranadive.
"We respect the decision that was made [by the NBA]," Maloof said, according to the Bee. "We'll work with anybody. (Ranadive is) a good guy."
However, Maloof also said "there's no pressure on us" to sell the team.
Hansen issued a statement through the SonicsArena.com website, which read:
"While we are obviously extremely disappointed with today's relocation vote and truly believe we put forth both a significantly better offer and Arena plan, we do thank the league and the owners for their time and consideration and look forward to hearing back on our agreement to join the Maloofs as Limited Partners in the Kings.
"But most of all I would like to thank everyone in Seattle who has been a part of our effort and supported our cause. Words simply can't express how much your support has meant to me personally and to our City....
"Our day will come...and when it does it will just be that much sweeter for the struggle. I love you Seattle!"