Raj Bhathal, the founder of Orange County’s largest swimwear maker, will acquire a “significant” stake in the Sacramento Kings when its $535 million sale closes in coming weeks.
The new ownership group, headed by Silicon Valley software executive Vivek Ranadivé, is set to acquire a 65% controlling interest in the NBA team from co-owners Joe and Gavin Maloof, both of whom once flirted with the idea of bringing the struggling franchise to Anaheim.
It’s a sweet turn for Bhathal, a die-hard sports fan who made a run at the New Orleans Hornets a year ago, only to be outbid by Tom Benson, owner of the NFL’s New Orleans Saints. Benson acquired the Hornets for $338 million.
“Leading” Sport?
“We believe that basketball will be the leading American sport of the 21st century,” said Bhathal. “The games are high-scoring, fast-paced, and entertaining live, on television, and relevant in new media.”
Bhathal will serve as alternate governor, representing the Kings at league meetings with Vivek.
He’ll also chair the team’s international committee.
“Basketball is global, multicultural and talent driven,” said Bhathal, a resident of Big Canyon in Newport Beach.
He and his wife, Marta, co-founded and retain a stake in Tustin-based Raj Manufacturing LLC, which sees an estimated $130 million in annual sales and is now run by their children.
Alex Bhathal and sister Lisa Bhathal Vogel took over operations of the 46-year-old, family-run swimsuit business in 2007 in an investor-backed buyout deal with San Francisco-based private equity firm Swander Pace Capital LLC.
Alex Bhathal will be a director on the Kings’ board, which will oversee operations, the existing and planned arenas, and real estate development opportunities near the stadium.
No Rookie
Raj Bhathal is no rookie to sports ownership.
He owned the Orlando Thunder football franchise of the World League of American Football, a one-time spring league aimed at bringing American professional football to Europe.
“When you have a passion for your business, it’s not work,” Bhathal said of such pursuits.
The Kings sale ends years of uncertainty on the future home of the franchise and its long-term viability.
In early 2011, Broadcom Corp. cofounder Henry Samueli, who owns the Anaheim Ducks hockey team and Honda Center’s operating company, offered the Kings a $100 million loan to help relocate the team here, and he agreed to pump as much as $70 million into stadium improvements to meet NBA standards.
A year later, the Maloofs, who once ran the annual Maloof Money Cup skateboarding contest in Orange County, struck a tentative deal with the league to keep the franchise in Sacramento, where Mayor Kevin Johnson, who played 14 seasons in the NBA, was leading a campaign to assemble a local ownership team.
With several financial questions looming, a new investment group emerged from Seattle, led by Bay Area hedge fund manager Chris Hansen and Microsoft Chief Executive Steve Ballmer, who upped their bid to $625 million in the final days of negotiations.
On May 17, the NBA Board of Governors―essentially the owners―voted 22-8 to keep the franchise in the capital, opening the door for the Sacramento-based ownership group.
Raj Bhathal said he kept a watchful eye from afar on the developments amid all the twists and turns. He had kept in contact with league officials since missing out on the Hornets buy.
Raj Bhathal was first approached by Mayor Johnson and then Vivek, who heads Palo Alto-based TIBCO Software Inc., which sees about $1 billion in annual sales.
“For a while, we thought the team would be moved to Seattle, and we stayed away from the deal,” Bhathal said. “But Mayor Johnson and Ranadivé did an incredible job developing a plan for the arena and spearheading an ownership group.”
The new investors agreed to build a $448 million arena downtown to replace the outdated Sleep Train Arena, which was renamed in October when Power Balance LLC’s multiyear sponsorship was revoked after the Lake Forest-based company went into Chapter 11 bankruptcy.
The stadium was briefly called Power Balance Pavilion.
Other minority owners of the Kings include Mark Mastrov, founder of 24 Hour Fitness; Mark Friedman, a real estate developer in Sacramento; the Jacobs family, who founded San Diego chipmaker Qualcomm Corp.; Silicon Valley investor and entrepreneur Katrina Garnett; attorney and former Facebook executive Chris Kelly.
