NBA Drama Has California Legislator Questioning Microsoft’s Foothold in Golden State

California State Senate President pro Tem calls for report on state’s technology dealings with Microsoft following Seattle’s pitch to buy and relocate the NBA’s Sacramento Kings.

by / January 25, 2013

Following news that Microsoft CEO Steve Ballmer is part of an investment group seeking to purchase the Sacramento Kings basketball franchise and move the team to Seattle, the leader of California's State Senate is asking how much money his state spends on Microsoft products.

In a Jan. 22 letter to the state Department of General Services, Sen. Darrell Steinberg said he wants to know how many technology contracts California agencies have with Microsoft and how much the state has paid to the company over the last decade.

Steinberg, a Democrat who represents the Sacramento area, wrote that he is “troubled that a company and a CEO that has for so long enjoyed a prosperous and beneficial working relationship with the State of California and its taxpayers would blatantly engage in activities which are clearly and measurably detrimental to our State’s job and revenue base – not to mention use profits earned through business with our State to appropriate a California-based asset.”

After weeks of speculation, a Seattle investment group led by hedge fund manager Chris Hansen announced an agreement  on Jan. 21 to purchase the Kings from the Maloof family, which currently owns the team. Ballmer is a major partner in the new ownership group, which reportedly intends to relocate the team to Seattle in time for the 2013 basketball season -- a deal that must be approved by the NBA.

The potential move delighted fans in Seattle, but outraged many in Sacramento, where city officials have tried repeatedly to reach a deal to build a new arena for the team. Most in the region who do not share the Maloof surname place blame for the failures squarely on the family ownership. 

For years, the Maloof family vowed to work with the city of Sacramento on constructing a new arena. As recently as February 2012, a deal was struck between the Maloofs and former NBA All-Star and current Sacramento Mayor Kevin Johnson. That deal, which saw Johnson and brothers Joe and Gavin Maloof celebrate together on center court at Sleep Train Arena in Sacramento, was quickly derailed weeks later when the Maloof family withdrew from the arrangement. Still, the family repeated its pledged commitment to Sacramento and, through official and unofficial channels (i.e., local sports radio), repeatedly stated the team was not for sale. 

Steinberg, who has involved himself in several earlier efforts to build a new arena in downtown Sacramento, explained the motive behind his letter to the Department of General Services (DGS) during an interview with local radio station KFBK.

“I’m asking questions on behalf of my community and my state,” Steinberg said. “And here’s the issue. Microsoft’s CEO Steve Ballmer is obviously using some of his profits to purchase the Kings and move them to Seattle. California, at the same time, has major contracts with Microsoft. I simply want to know more about this.”

Steinberg continued, asserting that while he is unsure what future course of action to take, he does not take lightly the possibility of losing hundreds of area jobs at the hands of one of California’s large technology vendors.  

“There is something not right about a company and its principal owner making millions of dollars in California while at the same time using its resources to try to take away an asset which is about, yes, sports and entertainment, but also about jobs and jobs for Californians,” he said, adding, “I don’t yet know what the proper public policy response might be, but I want this information about the magnitude of California’s investment with and in Microsoft.” 

The California Technology Agency declined to comment on the matter, and Eric Lamoureux, deputy director of the DGS, said the DGS is continuing to research answers to Sen. Steinberg’s questions. "As such," he said via email, "it would be premature to offer any speculation on the matter."

Microsoft could not be reached for comment by press time. 

Image courtesy of Shutterstock

Chad Vander Veen

Chad Vander Veen is the former editor of FutureStructure.


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