Exactly three years ago Thursday, a pair of would-be purchasers from Seattle put what seemed like an absurd price tag on the Sacramento Kings: $525 million.
That turned out to be cheap.
The Kings are now worth $925 million, according to the latest annual valuations from Forbes magazine. That’s an increase of 16 percent from a year ago and nearly double the value that Seattle investors Chris Hansen and Steve Ballmer assigned to the team when they made a tentative deal with the Maloof family to acquire the franchise Jan. 21, 2013.
The run-up in the Kings’ valuation is a reflection of soaring NBA values in general. Even at $925 million, the Kings remain something of a bargain. Forbes said the average NBA team is worth $1.25 billion. The New York Knicks, at $3 billion, have overtaken the Los Angeles Lakers for the top spot.
NBA owners scuttled Hansen and Ballmer’s plan to relocate the franchise to Seattle. The Maloofs then sold their controlling interest to a group led by Vivek Ranadive in a deal that valued the Kings at $534 million.
Team valuations have soared ever since, thanks in large part to a huge new national television contract signed by the league. Ballmer’s deal to buy the Los Angeles Clippers for $2 billion in 2014 also has played a huge role.
The Kings, though, have done more than just ride the wave. Just a few years ago, they were among the lowest ranked teams in the Forbes rankings; now, they’re in the middle of the pack – 18th out of 30.
Construction of their new downtown arena, Golden 1 Center – a condition of the NBA’s decision to keep the team in Sacramento – is surely contributing to the team’s increase in value. The $507 million arena, financed in part by a $255 million subsidy from the city, is scheduled to open in October. The Kings also negotiated a far more lucrative regional TV deal with Comcast SportsNet in 2014, more than tripling their annual revenue.
Forbes said the Kings earned an operating profit last year of $4.2 million on total revenue of $141 million.