The Maloof family, which bought the Kings in 1998, is widely reported to be shopping the team. Industry watchers predict the franchise can fetch at least $500 million in an auction. That price tag would top the $450 million the Golden State Warriors sold for in 2010 to a group led by Mandalay Entertainment Group CEO Peter Guber.
"Would it shock me? No," said Adam Chase, a member of Dow Lohnes PLLC in Washington.
One industry source said the Kings hired Galatioto Sports Partners LLC in New York to run an auction, but that is not confirmed. Galatioto declined to comment.
Galatioto ran an auction for the Warriors in 2010 that drew interest from Oracle Corp. CEO Larry Ellison and 24-Hour USA Inc. founder Mark Mastrov. The Warriors were valued by Forbes at $315 million at the time.
One industry source has not ruled out Mastrov bidding on the Kings in order to keep them in Sacramento. One of the other reported bidders includes an investor group led by Valiant Capital Management founder Christopher Hansen, who wants to move the team to Seattle.
Seattle has been without an NBA team since 2008, after the Supersonics moved to Oklahoma City and were renamed the Thunder.
The Maloof family almost moved the Kings to Anaheim during the 2011 NBA lockout, but that deal fell apart.
Forbes had the Kings valued at $300 million in 2012, an increase from $293 million in 2011. At that valuation, the Kings would rank as the 23rd-most valuable franchise out of the league's 30 teams, according to Forbes.
The increased valuations in sports franchises is a result of the high demand for teams when they hit the auction block. Although there has been a pickup in NBA transactions over the past couple of years, sports teams still do not come up for sale often. In addition, sports leagues generate increasing amounts of revenue from television broadcasting contracts, a portion of which is shared with the teams, making the franchises very attractive targets.
Since 2011, the Memphis Grizzlies, Toronto Raptors, New Orleans Hornets and Philadelphia 76ers have all exchanged hands.
"Valuations are increasing. It does not seem it will go down south anytime soon," Chase said.
Chase adds that the Kings are not the core focus of the Maloof family's business empire. "The Maloofs have other economic interests aside from the team," he said.
The Maloofs used to own The Palms casino in Las Vegas but in 2011 sold a 49% stake each to private equity firms Leonard Green & Partners LP and TPG Capital in a debt-for-equity swap deal that erased more than $400 million of the family's debt and left them with just a 2% stake.
The family still owes the city of Sacramento about $77 million in bonds that were held over from the team's previous owner.
The Kings entered Thursday with a 15-24 record, ranking them 13th out of the 15 teams in the NBA's Western Conference.
Baker & Hostetler LLP announced that Miriam Beezy joined the firm as a partner in the intellectual property group. For other updates launch today's Movers & shakers slideshow.
Seattle-based provider of all natural, nut-based snacks could garner takeover interest from both larger strategics and private equity. More video