A whole new round of Burkle chatter is going to kick up after this Sacramento Bee story:
While the Kings would be tenants in the downtown arena, multiple sources said the city wants the team to make its contribution upfront - $60 million in cash and $25 million through the donation of land around Power Balance Pavilion. [...]
What's unclear is whether the Maloofs are willing or able to put in that much. [...]
But if the NBA likes the financial package, city officials expect the league could begin pressuring the Maloofs to bring in new investors or sell the team altogether.
A source familiar with the negotiations said Southern California billionaire Ron Burkle, who made overtures to the Maloofs last spring, is still interested in buying the team.
Instead of annual lease payments that would help the city replace parking funds that will have become privatized, the city wants the Maloofs' payments now to help build the arena. Given that the Maloofs haven't shown an ability to put together a $60 million roster, coming up with that much at the team level seems tough.
The Maloofs already have massive debt with the NBA's credit facility (up to $125 million), the city ($70 million) and, outside of basketball, only God knows where else. Remember: part of the attraction of the Anaheim deal was that Samueli was going to pay the Maloofs to move. It's pretty much the opposite here.
How will the NBA fall on this? Will they cover the difference? Will they look for owners who have the capital to eventually make it work in this market in a new building? Will they decide that the Maloofs shouldn't have to contribute about 15 percent of the capital costs of an arena they won't own?
This is faaaar from over.
1 recs | 338 comments
Maybe they haven't put together a 60 million dollar roster knowing they may have front 50 to 100 million for the ESC.
Am I giving them to much credit here?
nakaisgod - February 16, 2012
Yes.
This team was stripped to the bones preparing for a move to Anaheim. Also, if your backup plan is to sell a team, it’s more attractive without bad long term contracts.
Aykis16 - February 16, 2012
But how attractive does the team look with debt to the city and the NBA?
I would have to think it would lower the amount the Maloofs would get, like how the Palms debt resulted in them only keeping 2% (not sure if they got any cash or just cleared debt).
SharkKings49 - February 16, 2012
Cleared Debt, and partial ownership.
The reason why they got to keep 2% is because a bank can’t run a casino, so they had to remain partial owners so they can operate.
The Guy on the Couch - February 16, 2012
It wasn't a bank I believe
lietothegirls - February 16, 2012
that's not it at all but alright
wallywagon11 - February 16, 2012
You confuse me.
Is it not right? Or is it all right?
caseycheesecake - February 16, 2012
it was an aggressive takeover and not from a bank
wallywagon11 - February 16, 2012
They were paid in chips...
SayWhat? - February 16, 2012
And they had to take shrimp flavor. Just a bad deal all around.
Kfan in Korea - February 16, 2012
This.
Slam_Dunk - February 16, 2012
I am hoping that the NBA is ok with this knowing their people have been close to the situation the whole time.
I am thinking (or praying) that KJ has kept David Stern more or less updated on the city’s intentions and details like this wouldn’t catch the NBA by surprise.
nakaisgod - February 16, 2012
And hopefully
KJ’s always known the parameters of what Stern & Co. consider to be a “fair” arena deal.
otis29 - February 16, 2012
From the outside-looking-in, def seems KJ and Stern have a good relationship.
Shizzo - February 16, 2012
Glad to see things shaping up
As much as I hate it, I think it is also possible that the NBA loans the Maloofs the 60 mil to get it done.
Dream scenario….Then they can use the debt as leverage to get them to sell, or even better, the Maloofs were waiting for a new ESC so the team value would be higher and they can get more money when they sell.
Sell the team. Please.
sac_faithful - February 16, 2012
This is my hope, that the “The team is not for sale” line changes once all the figures are known and they can look at the cost/benefit comparison of staying (with an upfront lease payment), moving (with an upfront relocation fee), or selling (with an upfront cash payout).
AnotherStupidSN - February 16, 2012
That IS what I think George and the others want
Gavin and Joe? What would they do with themselves? I think the family is divided.
lietothegirls - February 16, 2012
One thing that I like to imagine
is that Stern could possibly tell the brothers that if they sell the Kings to an owner who well help get the ESC built and keep the Kings in Sac, he’ll wish them good luck in their business endeavors and would love to see them recover their fortune enough to make a future bid to get back in the NBA. If, on the other hand, they still try to weasel their way to Anaheim, dividing the league’s owners and possibly resulting in a court case, that they’re on his shit list whether they eventually win or lose (though, he’ll assure them, they’re crazy if they think he’ll lose). Stern may not be able to outright force the Maloofs to sell, but he surely has some leverage at his disposal if that’s the outcome he wants.
AnotherStupidSN - February 16, 2012
This is what I'm hoping for
Everyone not wearing an Ed Hardy shirt can read the writing on the wall – the Maloofs will eventually be out as owners, whether it’s the Sacramento Kings, the Anaheim Royals, or the Seattle Whatevers. Hopefully Stern can use the idea of someday being let back in the club as a carrot to get them to toe the party line.
God help any fans that get these douchenuggets as their owners, though.
AngryTree - February 16, 2012
I'm going to have to google Ed Hardy
And now I did and still not sure of the reference (?)
lietothegirls - February 16, 2012
I'm just not hip anymore
(sigh)
lietothegirls - February 16, 2012
actually you would have had to be hip about 5 years ago to get that
and I still wear my Polo shirt on occasion so I am about 15 years back
wallywagon11 - February 16, 2012
You and I should go shopping for Members Only jackets
otis29 - February 16, 2012
I hate to tell you
but they are so far out of style, they have come back into style.
polotown - February 16, 2012
Whats a members only jacket?
Maybe I’m too young to get that, but too old to know the new hip trends. I just stick with the Kings jackets.
SharkKings49 - February 16, 2012
section214 - February 16, 2012
From your closet?
It would be awesome if it was!
outrider - February 16, 2012
Just back from the cleaners
I’m single again and I needs me my Mojo.
section214 - February 16, 2012
swagger
Shizzo - February 16, 2012
I could totally see Jimmer rocking this.
Shizzo - February 16, 2012
Jimmers Only
I like it.
section214 - February 16, 2012
It's hip to be square!
otis29 - February 16, 2012
Im pretty sure I have seen photos of Joe and Gavin wearing Ed Hardy shirts.
I think that was the reason for the fashion name drop.lol
9K1NGS6 - February 16, 2012
I've seen Ed Hardy
wearing Gavin and Joe shirts.
ElRonToro - February 16, 2012
Touche
9K1NGS6 - February 16, 2012
Does anyone really think that "multiple sources" would be saying this
if the NBA wasn’t already on board?
This story is essentially an announcement by Stern that it is time for the Maloofs to put up or shut up, or they will be forced to sell the team.
polotown - February 16, 2012
I like your thinking.
sac_faithful - February 16, 2012
I have spent waaaay too much of my life dealing with political machinations
polotown - February 16, 2012
I hope this is correct
Howard Nevens IV - February 16, 2012
Looks like we may finally get a peek at the hand they are holding.
Slam_Dunk - February 16, 2012
Completely agree
There is no way this is a surprise to the NBA. KJ didn’t just wake up one morning and say “Ok guys, let the Maloofs and the NBA know what their price will be”. They’ve probably known for a while.
LightningStrike5 - February 16, 2012
Definitely
Saucey Youngman had the 80-100 mill figure in the OC Register weeks ago.
dampania - February 16, 2012
And his source was likely
George Maloof
dampania - February 16, 2012
And he got that information
During his regular weekly attendance at the Maloof’s love palace.
LightningStrike5 - February 16, 2012
rec'd for Saucy Youngman ref
wish I could find that pic of him with the lines of awesome
mtmoore55 - February 16, 2012
This one?
SharkKings49 - February 16, 2012
Yessir!
that’s the one with all the fancy rainbow striping
mtmoore55 - February 16, 2012
I like your thinking, but ...
… it could also be a simple case of the city applying public pressure on the NBA by tossing this number out to the wolves.
Tom Ziller - February 16, 2012
Possible, but I don't think the tone has been that negative.
KJ and AEG wrapped up meetings in NY with Stern not too long ago and this had to have been on the agenda.
In Q&A sessions with KJ following that he said those meetings were very positive and that AEG had committed to putting money into the arena.
I did not ask about the NBA contribution, but if I were a betting person I would say that KJ went to Stern having AEG ready to contribute as long as they got a similar commitment from the NBA.
CowbellKings - February 16, 2012
I'm about 99% certain
This is the way that parties use the media to communicate without making unpolitic public statements.
Stern cannot issue an ultimatum that the Maloofs must pony up some money or the NBA will force them to sell – among other things, it would create issues for other team owners who don’t want Stern to have too much power, and Stern would get pressure from other cities that want teams.
I bet the message to the Maloofs is crystal clear. KJ and Stern leak the “news” in the article. The city is doing its part, but (reasonably) needs a contribution from the largest beneficiary of the arena. The Maloofs must come up with additional funds.
If they won’t, then it becomes quite reasonable and supportable for Stern to take action to force a sale. The other owners can’t object and Stern looks like a savior.
polotown - February 16, 2012
This sounds about right
CowbellKings - February 16, 2012
What are the options?
1. Maloofs come up with $60 million +$25 million land
2. Maloofs come up with part of $60 million +land/ NBA comes up with remainder
3. Maloofs have no money/ NBA comes up $60 million + Maloofs contribute the land
4. Maloofs fail to come up with anything and NBA fails to help = deal ends
5. Maloofs/ NBA fail to come up with anything but Burkle or someone else steps in
Are these basically the options or am I overlooking something?
Slam_Dunk - February 16, 2012
6. NBA comes up with $60 million and takes the land as a $25 million credit
to the Maloofs’ debt, then packages it as part of the (already in the works) sale to Burkle.
polotown - February 16, 2012
This makes sense, because I have always thought that Burkle is interested in the Kings, but is also very much interested in land for development – his primary love ever since he left the grocery business.
ExPFCWintergreen - February 16, 2012
I guess that is really #3
polotown - February 16, 2012
don't think that's possible
wallywagon11 - February 16, 2012
What does the NBA have to do to call a loan?
polotown - February 16, 2012
not sure what you mean
either way, kind of hard to use that land as a $25 milion credit when any sale of it has to be distributed to the bond owners
wallywagon11 - February 16, 2012
Thanks.
I didn’t know the land was encumbered. The article implied that the Maloofs owned it.
polotown - February 16, 2012
I don't think AEG is a shoe in for the $50 million either, so that's a variable
A month ago Tim Leiweke President of AEG answered this question
Could it be similar to what AEG did in Kansas City [investing $50 million to help pay for Sprint Center construction in return for the arena management deal]?
Here’s the link
dampania - February 16, 2012
and this is basically what my arguement was somewhere else in this thread (or another) as to why AEG likely isn't trying to push the Kings to Kansas City
the question you have to ask though is whether they see this as the most viable option to keep the Kings out of the LA area given the affect it would have on their other investments down there. They might possible be more willing to do $50 million because of that.
wallywagon11 - February 16, 2012
I really wonder what Stern's sense is from the owners on the Anaheim thing at this point.
He could very well already know that Anaheim isn’t happening without a court battle (because the Maloofs won’t have enough votes, or because the owners will set a massive relocation fee). I’m sure that Stern was very careful in the wording of his assurance to the Maloofs about any future relocation bid. Still a lot of crazy dynamics and uncertainty in this whole thing.
AnotherStupidSN - February 16, 2012
(Just saying - this really doesn't factor into the AEG side of it)
wallywagon11 - February 16, 2012
It might, if they're not worried about a team moving to Anaheim.
Like you said, they might be more willing to invest in Sac if they’re worried about how a move to Anaheim would affect their L.A. investments. If they know that the owners won’t allow a move to Anaheim, anyways (not sure if they would be tuned into those happenings to that extent or not), then that motivation wouldn’t be there. All I’m saying is, there’s a whole lot about the Anaheim dynamic that is complicated and uncertain (major market owners versus small market owners, etc.)
AnotherStupidSN - February 16, 2012
well they're still making money here
granted if they got a better deal like somewhere else (not Seattle given the whole tenant issue there and how it’s linked to construction) that might throw a wrench in it but considering how much time and effort they put in here and the fact the political process here has already gone quite a ways (still a lot left of course) I don’t think they just drop making money here to start all over again elsewhere.
wallywagon11 - February 16, 2012
I don't think so, either.
You brought up how the Anaheim/LA/AEG dynamic could play a role in this (which I agree with), I was just pointing out that we can’t assume anything about that dynamic because we don’t even know if Anaheim is still a realistic option, and we don’t know how much AEG knows about all that. Lots of questions, lots of answers that I really wish we had.
AnotherStupidSN - February 16, 2012
And how concerned should Stern be...
if Samueli is loaning the Maloofs what could be as little as 50 million and likely much more to move. Maybe even double that. And after reading the Anaheim agreement, they boys basically would get called on the entire balance of the loan if they missed one payment to Samueli.
One could also ponder that this is exactly what the boys and Samueli had a wink-wink agreement to do in the near future. They would probably be forced to hand over control of the team and Samueli would assume all the team debt. Basically back dooring Stern on an ownership transfer. What would the Maloofs get back? Maybe a big investor to help them gain control of the Palms. Which would be why George is so in love with Anaheim.
Jb_Kings - February 16, 2012
AEG has already been in on meetings with KJ and the NBA, though.
So, this $60mil number is coming after KJ and his team (and the NBA) likely already have a sense of what AEG is interested in investing. So, if the AEG chunk is less than $50mil, I would assume that the $60mil figure as the Maloof/NBA chunk is already figuring for that.
AnotherStupidSN - February 16, 2012
I just don't want to assume that the other partners will be ready to roll with our terms sheet should it pass on the 28th
I know all parties have been in contact, but that does not mean that deal on the 28th has been agreed to by everyone involved or that they will even be close. That’s what’s starting to make me more nervous than our city not passing this term sheet.
dampania - February 16, 2012
understandable concern, but the weakest link to this deal has always been the City, in my estimation at least. If the City’s deal is found acceptable to the NBA, I believe that the rest will fall into place. I don’t think that the NBA wants to have another team on the run after suffering the PR disasters associated with recent moves. Attendance is down in major market cities. There is a brand new CBA that appears to be more favorable to small market teams. Etc.
ExPFCWintergreen - February 16, 2012
I'm a lot less nervous about that, because I just don't want this thing to be killed by politics.
If it dies because it just doesn’t make good business sense, it will still suck like hell, but at least we’ll have real closure. That’s really what I’m happiest with in how KJ has been handling this whole thing, in that I really feel like this is absolutely our best shot. He’s doing everything he can from the “political will” side of the equation. If the “business will” just isn’t there for this kind of investment in Sacramento, then we can forget about our visions of Sacramento as a “major league” city for the time being and move on with finding other ways to improve the city in the present and future.
What has been so frustrating about all of the previous arena efforts that have died at the hands of politics is that they haven’t given Sacramento a chance to find out if it can be the center of vibrant growth that many of us imagine. If the city does it’s part with this plan and the private investment just isn’t there to make it work, then at least we’ll know where we really stand.
AnotherStupidSN - February 16, 2012
That's how I feel too - when it comes to the idea of having closure should this fall through
But I’m still a little nervous about the idea of it falling through, and after being at the council meetings and hearing Think Big’s optimism about a deal that works for Sacramento, I’m getting more and more confident that our city will step up.
Now, as a Kings fan, you can’t help but fear an impending Richmond ankle sprain, Horry shot, Game 6, or a blown out knee.
BTW, I’ll be there at the 28th meeting as well, even though I have tickets to the game.
dampania - February 16, 2012
I am hoping for a vote by 8
and get there for the 2nd half. I have already called Coach Smart to call all his TOs in the first half and have gotten many players to agree to feign injury , so we shouldn’t miss much.
We should have a bus ready
ElRonToro - February 16, 2012
They should stream the council meeting on the megascreen at the game
and stream the game on a screen at the council meeting. Maybe have Sheedy selling $9 beers.
AnotherStupidSN - February 16, 2012
and conversely
The game on the big screen at the city council
ElRonToro - February 16, 2012
I can imagine the loudest cheers at the game will be when its announced the city council passes this
dampania - February 16, 2012
Yeah I hope they make it the first order of business
dampania - February 16, 2012
True. It has been difficult for Sacramento to evaluate anything on anything other than political terms, because government (state and local) has become Sacramento’s exclusive “business.” We don’t have a lot of business interests, chambers of commerce, etc., that have a lot of voice and recognition in City Hall.
ExPFCWintergreen - February 16, 2012
I think you can actually see it in a simpler way.
Basically, the NBA either likes the look of the terms, or they they don’t. If they think it’s a good deal, they’ll push the Maloofs to agree to it. If the Maloofs balk, the NBA could decide to either offer to loan them the money or push them to sell to an owner who will take this arena deal. If the Maloofs then say they won’t sell and they’re killing the deal to file for relocation, things could really get interesting/ugly between the Maloofs and the NBA (with no certainty of how it would eventually shake out).
AnotherStupidSN - February 16, 2012
Okay, let me see how this works with the options I set forth.
If Maloofs come up with the terms, no problem. Deal done.
If Maloofs balk, NBA helps, deal done. NBA doesn’t help deal fails.
Pretty much the same as I pointed out. I was just trying to spell out what options would most likely look like, as it plays out.
This is either going to go smooth as silk or this is going to have more twists and turns along the road.
Slam_Dunk - February 16, 2012
Not necessarily. The other option is that the NBA convinces the Maloofs to sell to someone that will take the deal in Sac. I have no idea the extent to which the NBA could do that, but I think there’s enough reason to have hope that it’s a possibility (the Maloofs owing a ton of money to Sac and the NBA, powerful owners not wanting a team in Anaheim, etc.)
AnotherStupidSN - February 16, 2012
Well, yeah. I mentioned that as Option #5 listed further up the page.
I just got lazy and didn’t mention that again. That would probably be the best of all options, but I think for that to happen, the Maloofs will really have to feel that their backs are against the wall, with no other option available to them.
I am concerned that Seattle’s interest in the team, along with George Maloof hanging out in Southern California, they could have some hope they can work something out without selling the team.
Slam_Dunk - February 16, 2012
Yep. I think the NBA wants to give maj. ownership to Burkle
This is perfect means by which that gets done. Lately I lost hope that this would be the deal, and felt that the City’s focs on building downtown was a huge unforced error. But any deal becomes possible when there is someone available with cash. I hope and pray this is what happens.
ExPFCWintergreen - February 16, 2012
If the region gets the ESC built and forces the Maloofs out in the bargain, I will officially be over Game Seven.
At least I think so. I hope so.
andy sims - February 16, 2012
"NBA Champion Sacramento Kings"
Shizzo - February 16, 2012
So says my license plate holder.
caseycheesecake - February 16, 2012
Well said.
And thats been the hardest to get over.
9K1NGS6 - February 16, 2012
But what about Game 6?
Slam_Dunk - February 16, 2012
Game 6 never happened
betweentheeyes - February 16, 2012
Kick the Maloofs to the curb and approve our arena plan and I'll forget all of 2002
SharkKings49 - February 17, 2012
I will too, but....
I will still have to turn away when the highlight comes on the TV and Vlade knocks the ball out to that skinny bastard.
EJ08 - February 16, 2012
natomas land?
How can they generate revenue there when natomas is already saturated with retail? Welcome to Palms Sacramento! Where the slots are stingy and it smells vaguely of a lockerroom but at least it’s closer than cache creek. Tax the hell out of profits there. Everyone wins!
fire_voisin - February 16, 2012 via mobile
They had a whole meeting where they talked about different options for PBP and the land.
Things like healthcare facilities or a for-profit university. There should be options.
AnotherStupidSN - February 16, 2012
Just what we need another Kapan "University"
Lotusprime - February 16, 2012
argh
Kaplan*
Lotusprime - February 16, 2012
Need them or not, it's one of the few booming industries these days.
Though, it sounds like investigations into student loan practices could put a dent in their momentum.
AnotherStupidSN - February 16, 2012
It's going to be an automall
You watch.
Carl - February 16, 2012
No that’s why they are overhauling Auburn Blvd between Watt and Marconi..Catch people with all the new dealerships there, and that’s why all the dealerships are starting to leave Fulton and Arden..Why be there when you can get views from the freeway from people on their way to the Automall
I would love it to be a new water/amusement park that way we could run cal expo out of business. That place has been constantly deteriorating and the board not approving the smart move last year with the land swap has pissed me off to my last nerve.
Widowwolf - February 16, 2012
I felt exactly the same
dampania - February 16, 2012
The problem with cal expo is that the board doesn’t care if it runs out of money or not. It isn’t their money. They still have the state fairgrounds. They still get to drive around town in the complimentary cars donated to them by GM. They still get good tickets to opening day at Del Mar.
ExPFCWintergreen - February 16, 2012
Their Chair also had this really lame excuse that the Natomas site didn't have good freeway visibility
While I’d argue that it has much better visibility than the current Arden site – two major freeways converge there and it is flat. You can see Arco arena from miles away. At the Arden site you only can see the fairgrounds when you drive right by it.
dampania - February 16, 2012
Not surprising to hear this. I know that ONE member of the Cal Expo board wanted to make this happen, going back to 2007 or so, right after Q and R were defeated. He was the reason why this Cal Expo proposal even came up. But his was only one vote.
ExPFCWintergreen - February 16, 2012
all I know is
this sounds like a pretty fair deal for them. If they can’t afford that contribution, then they’re not the right owners. This is getting really interesting now.
drew7 - February 16, 2012
Thoughts
More important than the Maloofs, my concern now lies with the NBA. Lacking a new arena, the NBA would allow the Maloofs to move the team. As much as I disagree with it and the hate the idea, it wouldn’t be difficult for Stern to put his spin on that situation. “We gave them an extra year, they knew if a deal didn’t get done the team would move.” Etc., etc.
If the city can come up with a reasonable and viable plan, I think it becomes far harder for the NBA to spin a move. If the city does its part, but the Maloofs can’t cover theirs, that’s a tough sell. I can’t imagine how you spin the team moving in that scenario (although Stern would probably just say it wasn’t his fault in a very condescending manner and then light a subordinate on fire).
My hope is that the NBA finds the deal reasonable, and puts the Maloofs on the spot. If that happens, I will be happy. I will be happy if the Maloofs come up with their portion, or I’d be happy if the Maloofs sold to someone else who could put up the money. Either way, I’d be happy.
The NBA is the part of this that still scares me.
Exhibit G - February 16, 2012
Agree.
Slam_Dunk - February 16, 2012
Well, if the report from Cowbellking is correct about the NBA loaning around $80 milllion to the Maloofs for their share then this article doesn't really change much there.
Unless I am missing something.
Either way, this has always come down to how willing the NBA was to put their foot on the Maloofs throats. It would be pretty historic for the to put up the $80-85 million for the Maloofs and if the Maloofs have the stomach to fight it out in court and a will to move to Anaheim it can get pretty dicey but it is what it is.
wallywagon11 - February 16, 2012
*pretty historic for the NBA to put up
wallywagon11 - February 16, 2012
The Maloofs are close to tapped out by the NBA
Including holding companies, the NBA’s policy is not to allow ownership groups to have more than $125 million in debt tied to the team/arena. We have a solid idea that the Maloofs are already over $100 million, and they might be tapped out completely.
I don’t see the league making an exception. They’d like need BoG approval to do so.
Tom Ziller - February 16, 2012
Same boat
I personally can’t fathom the NBA doing it but those were the reports just a little over a week ago.
But yeah I have a hard time believing it as well. I’ve mentioned it before, but it would be quite historic for the NBA to pony up much for an arena on it’s own.
It’s kind of crazy though much equity the Maloofs have burned up. No wonder they don’t want to sell, they won’t see anything from the sale.
wallywagon11 - February 16, 2012
Tapped out? My math says they are already well over with the City loan
and would have been in the same boat once Samueli loaned them money to move to Anaheim.
Let’s hope the NBA feels like they can enforce the ‘policy’. Is it in thier bylaws do you know?
lietothegirls - February 16, 2012
the public doesn't have access to the NBA bylaws
it’s rumored though that a fairly decent chunk of teams are maxed out on their credit line. I seem to recall it was about half of the 19 teams that have gone over the old $75 million limit.
wallywagon11 - February 16, 2012
sorry I misread what you wrote
The NBA just has a max credit line with the NBA’s credit per team. Tom is talking about them being tapped out on the NBA’s credit line. There likely is nothing about credit lines to third parties (although there has to be some sort of vague “financial health of a franchise” provision somewhere)
wallywagon11 - February 16, 2012
Yeah, wondering about the "financial health of a franchise" stuff in regards to the Maloofs borrowing money to move the team.
AnotherStupidSN - February 16, 2012
It sounded like more than that to me
and it sounded like sound financial sense for the league considering that the Dodgers revealed that they are $575 million in debt.
lietothegirls - February 16, 2012
The relocation fee is a wild card, though.
The Maloofs taking the NBA to court if they “block” a move to Anaheim would be one thing. But would they take the NBA to court for setting a $60 million relocation fee? I would think the Maloofs would have a tough time proving to a judge that the relocation fee represented blocking a move, considering the looseness with which the relocation fee is defined (it’s been clearly established that relocating teams be charged the fee, but the amount of the fee seems to be completely open). I suppose that one question would be whether or not the NBA can stop the Maloofs from borrowing tens of millions of dollars from Samueli to pay the relocation fee.
AnotherStupidSN - February 16, 2012
I don’t fear the NBA any longer. I believe the NBA became a Sacramento ESC proponent once the NBA discovered that another deep pocket was in the wings waiting for a an opportunity to help keep the Kings here in Sacramento. I think it is exactly as discussed above, in that if Sacramento can come up with half of the costs or thereabouts, then the NBA will force the Maloofs to put up its “share” or give up majority ownership to Burkle. The willingness of AEG to pony up its $50 million is also important. I think that, once Burkle made it known to Stern that he had cash to pay to keep the Kings here, then Stern fully committed league executives to the effort, to the point of sending them here, acting as if the Kings were in receivership—which they are, given that they already owe the NBA a lot of money and must still carry a loan from Sacramento on their balance sheet.
Some local folks with ties to media and political people have been predicting a Sacramento Kings future for some time now, citing NBA and Burkle involvement.
This just might happen.!
ExPFCWintergreen - February 16, 2012
Your logic is impeccable
The NBA and David Stern would not go in as far as they have unless they had a clear understanding of the situation and alternatives. They have invested too much time and effort to just shrug and walk away.
The turning point in the whole ESC discussion was the famous reply to Kevin Johnson almost one year ago:
betweentheeyes - February 16, 2012
I hope the NBA see this deal as reasonable
Have there been any arenas built recently with NBA teams fronting this kind of cash? I’d love for the pressure of this deal to shift to the Maloofs and see what happens. They say they are debt free. It’s time to find out if that’s true.
blako - February 16, 2012
I don't think this is the norm.
Would really like to see it head in that direction though.
From what I’ve heard KJ talks to Stern weekly, so I find it hard to believe he’d announce this without at least having some idea Stern is on board. I also have heard Stern has little patience for broke owners, which doesn’t look good for the debt ridden “boys”.
Add in that you have a billionaire who has successfully shown he can operate a team, who you know is following all of this closely, pulled out from the dodgers bid, and still is interested in buying the team. Very interesting.
Crocoduck - February 16, 2012 via mobile
league
That’s a great point, the NBA doesn’t want poor owners either it’s not a good look for the league either, its interesting to see what will happen if the NBA is onboard with the ESC plan. I think keeping team here would be seen as a good PR move for the league, more so I don’t think the NBA really wants another team in LA either.
Murf - February 16, 2012
NHL Carolina Hurricanes put up $60M for their building in the 1990's
I live about three hours north of Raleigh. I mention it because Raleigh to some degree is a city not totally dissimilar in size to Sactown with one pro sports team. It was my understanding the Carolina Hurricanes put of $60M of their own money for the construction of the RBC Center in Raleigh in 1990’s. Restaurant and meal taxes paid the rest.
On the surface asking the Kings for $85M seems quite reasonable.
I will also mention RBC, the financial company for whom the arena is named, signed a $80M 20 year naming rights contract about 5 years after the building opened.
VirginiaKingsFan - February 16, 2012
absolutely not the norm
however they have had people here in town. I guess we’ll see what happens.
People need to realize though that this is likely not over past February 28th
wallywagon11 - February 16, 2012
Nets
Does anyone know how much its costing the Nets for the Brooklyn arena? Is 60 million a good or bad deal for ownership nowadays?
who betta than kanyon? - February 16, 2012
I think in lieu of yearly lease payments
of only 3 million its a good deal
ElRonToro - February 16, 2012
What do you mean how much is it costing them?
As in relocation fee? Pretty sure that would be $0.
wallywagon11 - February 16, 2012
Stay ready Mr. Burkle, unless the Maloofs have some hidden money, you may have your opening
*Assuming Stern agrees with KJ
SharkKings49 - February 16, 2012
I would be a little cautious of Burkle
He’s from Southern CA. The Thunder owners are from OK and told Seattle they’d find a way to keep the Sonics there. That didn’t happen. Anaheim doesn’t stop being a good destination for the Kings because ownership changes hands.
who betta than kanyon? - February 16, 2012
If I'm remembering correctly
He bought the Penguins and built an arena in Pittsburg to keep them there; I’m not worried about the bait and switch. He can fly wherever he wants. Plus, the change in ownership would be in response to the efforts to get an arena built…
towndunce - February 16, 2012
I have no idea what the situation was in Pittsburgh
I know it is big enough to support several sports teams — the city isn’t big, but the metropolitan area is a decent size. I’m not saying Burkle would definitely move the team, I would just be weary of the billionare’s motives. He wants an NBA team and doesn’t have any connections to Sac. That is all.
who betta than kanyon? - February 16, 2012
okay
so who is that NBA wealthy potential owner from Sacramento who has the resources to buy the Kings and help figure this mess out?
wallywagon11 - February 16, 2012
C-Webb
I’mtotallybeingsarcasticincaseyoudidntknow.
Lotusprime - February 16, 2012 via mobile
lol
I’m just proud you didn’t feel the need to throw in a hashtag in there like one of those assholes on twitter (#joking)
wallywagon11 - February 16, 2012
Hashtags anywhere but twitter are dumb
Even on twitter they’re sort of a waste.
Lotusprime - February 16, 2012 via mobile
Mark S Allen
who betta than kanyon? - February 16, 2012
The fm 102.5 guy???
A) he’s not super rich is he?
B) I think I just dated myself by calling him the 102.5 radio guy.
Lotusprime - February 16, 2012 via mobile
also the guy from Scratch
BTW, you just fell into my chasm.. muahaha!
who betta than kanyon? - February 16, 2012
with lisa ling
who’s now a hard hitting journo. I knew the chasm was there the whole time.
Lotusprime - February 16, 2012
I didn't even realize that was Lisa Ling
nice
who betta than kanyon? - February 16, 2012
btw, kudos
for the reverse chasm
who betta than kanyon? - February 16, 2012
Graduated from Del Campo HS
in 1991. Lisa, not Mark.
Lotusprime - February 16, 2012
Mark S. was 45 in 1991
then as now, attempting to look and act 22
look for his next good day report: “frosting your hair and wearing hurley clothes past age 50: It’s not just for joe maloof anymore”
lchristmas - February 16, 2012
No way that would mak him 66 now
Unless he’s Dick Clark’s illegitimate child there’s no way he’s 66.
Lotusprime - February 16, 2012 via mobile
How dare you
insult the man whose name and wisdom graces the back covers of literally DOZENS of DVD cases. His reviews are timeless, and if it weren’t for his recommendation (“What a treat!”) of Sandler’s classic, Jack and Jill, I never would have wasted $14.50 seeing it on opening day.
Shame on you, sir.
Carpeteria - February 16, 2012
A Burkle Press Release during last years arena talks
http://www.sactownroyalty.com/2011/4/14/2111592/ron-burkle-billionaire-sacramento-kings
Burkle may never happen, but this is why I root for him.
SharkKings49 - February 16, 2012
To be fair
What is he supposed to say. “Sucks that they’re trying to move your team to LA, let me buy the team and then in five years I can move them to LA instead. Kthnxbye!”
Lotusprime - February 16, 2012 via mobile
One of his close business partners ...
… is Darius Anderson, who is a Northern California guy and the real Wizard of Oz in this whole effort.
Also, AEG doesn’t want this team in Anaheim. They want them where they can build and run a building … so Sacramento or KC. Burkle has no ties to KC.
Tom Ziller - February 16, 2012
yeah I know.
I know about Anderson too, I was just saying the guy isn’t going to come out with a press release in which he makes his true intentions about what he’s really going to do with the team known from the get go.
Lotusprime - February 16, 2012
AEG also has real financial interest in this going to KC either
under the lease agreement with Kansas City, AEG is responsible for finding a tenant. However, they’d have to share revenues with the tenant inorder to entice them. Currently the revenues are so high on the Sprintcenter that they have met the criteria to actually kicking back arena revenues to Kansas City, something even the lawyers for AEG publicly admitted they didn’t think had a chance of happening. So, if AEG is making SOOO much money that they have to share the top % of it with the city and taking in all of the other money without having any problems at all getting enough concerts in there and enough people using the arena to say they are literally maxing out how much money they thought they could make, they aren’t exactly going to be fighting to get a tenant in there any time soon to help shoulder the burden. There is no burden for them, just lots of money.
wallywagon11 - February 16, 2012
crap sorry
*AEG has NO real financial interest in this going to KC either
Screwed up the headline!
wallywagon11 - February 16, 2012
It doesn't seem like they'd make any MORE money anyway
no new business really in KC.
lietothegirls - February 16, 2012
and AEG is the party who has the contractual obligation to find a tenant
I know there are some provisions under which the city can (and no, not looking it up I am lazy today) but if it’s AEG who is the one who has to do it and it’s currently against their financial interest … why? I mean, unless there are no other options and it would be more harmful for them to have the Kings move to Anaheim and they think that is a real possibility perhaps but I doubt it would come to that.
wallywagon11 - February 16, 2012
But KC is making money now
and there was a comment from AEG last year that said if they landed a sports team in KC they would have to cancel other events it’s so booked up.
lietothegirls - February 16, 2012
Is Burkle out of the Dodgers chase?
lietothegirls - February 16, 2012
Since when does a man romance only one?
Slam_Dunk - February 16, 2012
Found this article at the LA Times
He didn’t bid on the team, but may still “back” another bidder.
http://articles.latimes.com/2012/jan/28/sports/la-sp-0129-dodgers-bidders-20120129
otis29 - February 16, 2012
Right
http://www.latimes.com/sports/la-sp-0209-bidders-box-20120209,0,4165396.story
He’s no longer on the list
lietothegirls - February 16, 2012
exactly
was everyone gone when I fanshotted that? I thought it was kind of a big deal.
wallywagon11 - February 16, 2012
I vaguely remembered it
That’s why I asked the question
lietothegirls - February 16, 2012
You don't read my fanshots?
For Shame
wallywagon11 - February 16, 2012
Pittsburgh is virtually identical in size to Sacramento
but it is an old, Rust Belt city that was once of the nation’s largest, so people think of it as bigger than it is. If they can support multiple major league teams in Pittsburgh (and a major college program), so too can Sactown.
RJinFairOaks - February 16, 2012
There's also a lot of money in Pittsburgh (or, a lot of nice buildings/museums/universities, at least)
which I assume is due to the legacy of the steel industry heyday, etc. Passed through it for the first time recently, was very impressed.
AnotherStupidSN - February 16, 2012
Anaheim stops becoming a good destination for the Kings the second an arena is approved
The team can change owners all it wants, the team is staying in Sacramento if we build an arena
HeuristicLineup - February 16, 2012
agreed
I just think that the only way ownership changes hands is if the arena deal falls through and the Maloofs go bankrupt
who betta than kanyon? - February 16, 2012
If the arena deal falls through?
And what, the Kings have to move?
LightningStrike5 - February 16, 2012
Anaheim is dead.
I’m 95% certain that any revenue sharing agreemt came with firmer assurances of territory protection. The new GS owner as well as the LA owners and probably Chicago would have insisted on it.
Seattle, KC, St. Louis? Different stories.
lietothegirls - February 16, 2012
Yep, the revenue sharing deal plays a big part in all of this, in multiple ways.
It’s too bad we don’t know the details of it.
AnotherStupidSN - February 16, 2012
Maybe Larry Coon may know
As far as the CBA goes, he’s like Wally on steroids.
SharkKings49 - February 16, 2012
Yeah, don't think the numbers for the revenue sharing are public in any way, though.
AnotherStupidSN - February 16, 2012
could be
I know MLB has it as an addendum toward the end of their CBA.
wallywagon11 - February 16, 2012
Anaheim isn't a good destination
Until someone’s willing to give Jerry Buss a boatload of cash.
otis29 - February 16, 2012
Jerry Buss and Donald Sterling
Sterling’s boat will just be smaller.
Lotusprime - February 16, 2012 via mobile
And probably filled with Koreans.
Lotusprime - February 16, 2012 via mobile
Bennet was only able to leave because Seattle wouldn't build an arena
Had they built an arena they’d still have the Sonics. I think it sucks that it works that way but as long as Sacramento builds this thing, the Kings are staying. At least for another 15 years or so until the NBA starts crying about how the new arena is obsolete…
deadenddude - February 16, 2012
I truly believe that Burkle’s primary interest is in the Sacramento, not the Anaheim or San Diego or Yuicapa Kings. Hey, it makes sense. Burkle loves politics and donates to Democratic politicians. Where do most of the state’s politicians hang out?
ExPFCWintergreen - February 16, 2012
New Owner AND New arena would be the biggest "and one!" in Kings history.
Please don’t wake me up from this dream…..
kinglet - February 16, 2012
We all knew this was coming.
At a certain point, the Maloof family and/or the NBA was going to be asked what their contribution to this whole party was going to be. I believe that the Maloof contribution will be something on the order of 2%.
With that said, if the Kings get a new building, then the value of the franchise will probably increase drastically, possibly even enough to retire the debts that the Maloofs have to the city (via the Arco issue) and possibly even a substantial chunk of their indebtedness to the League. Cerainly, though, if a new building gets done, the franchise value will go up far more than the $60M-85M they may be requested to front.
The NBA’s on the clock on this one. They already own one distressed franchise (NOLA), and the recent agreement already has Jerry Buss and Donald Sterling and Joe Lacob paying out money to the “smaller market” teams, so it behooves the league to stabilize those “smaller market” teams so that they are self-sufficient. Moving a team out of that smaller market and depositing it as a third team in the LAX market (or a second team in the SFO market) does not accomplish that goal.
Sacramento has done more in one year than most cities in this position have done, and they appear (by most accounts) to not be bending over and assuming the position for the local ownership. KJ and his staff have done their part. Now it’s time for the NBA, and the Maloofs, to do theirs.
SierraSpartan - February 16, 2012
Yeah the problem with the NBA having all the distressed markets though
is that those other owners in distressed markets kind of like being able to move elsewhere inorder to secure more profits from other cities and they get to vote. And remember, it’s not like the league has a sterling record when it comes to preventing it’s franchises from moving.
wallywagon11 - February 16, 2012
(Although personally I would bet on the NBA over the Maloofs if it came down to threats of a lawsuit personally)
wallywagon11 - February 16, 2012
personally personally personally
wallywagon11 - February 16, 2012
A nice expensive legal battle
That sounds right up their alley. I’m still nervous about that though if push comes to shove.
Crocoduck - February 16, 2012 via mobile
Sierra Spartan has the same conclusion I do as stated in the first sentence
betweentheeyes - February 16, 2012
This runs back to an issue that the Maloofs have run into before and have taken to heart
They have heard the expression: “My two cents” and think it applies to finances as well as opinions.
betweentheeyes - February 16, 2012
Slam_Dunk - February 16, 2012
udderly believable
betweentheeyes - February 16, 2012
And it's $60 million up front of course
The land would come after the new ESC was built.
lietothegirls - February 16, 2012
Works well for post ESC Natomas revitalization
ElRonToro - February 16, 2012
Wait, wait, wait
The Maloofs were certainly going to be on the hook either in cash or via a loan for a relocation fee in the $40-$75 million range, I’m sure that’s why the City wants the money they would have spent anyway.
And yes, in a new arena the value of the franchise probably goes from $350 million to $400 million +.
The debt load of the current owners will have little affect on the future franchise value with the kinds of people who might buy a franchise.
Is this a subplot to force the Maloofs to sell? Only Stern knows.
lietothegirls - February 16, 2012
Yeah a few weeks after commenting back and forth with jjham15 a bit
I am pretty much in the Burkle bandwagon unless they figure out some crazy municipal bond idea where it’s tied to funding for puppies for homeless children (“But what about the children?”)
wallywagon11 - February 16, 2012
Uh oh
mbcarval - February 16, 2012
I think I just Burkle'd
section214 - February 16, 2012
I wonder if the '$25million' for the Natomas property
would include some deal that once the City sells it the difference if any between that $25 mil and the final sales price would be deducted from the $67 million dollar loan.
hmmm,shouldn’t give them ideas.
lietothegirls - February 16, 2012
Feel like I need a flow chart so I hope I am not making a mistake
but I would think they’d have to and they’d also have to require the Maloofs to keep on paying the loan on top of whatever rent they give to the NBA or the Kings (this is all mixed up now but I was under the impression from Cowbellkingdom that the Kings rent was going to be paying back the NBA for them fronting the Maloof contributions) and on top of letting the city take some revenues from ticket sales (in a surcharge) and some of the advertising revenue from the arena.
wallywagon11 - February 16, 2012
Sure, but the principle
would
likelypossibly be reduced in three years when it’s ready for sale as the real estate market recovers.lietothegirls - February 16, 2012
The one thing I think we as fans need to be prepared for
Is that this is a fluid situation right now. Because if the Maloofs are still making the minimum payments every year on the old loan (by the way the max you can pay off in one year is a little over $15 million but yes obviously selling the land would help knock off the principal faster) plus paying back the NBA $60 million over 30 years (I have zero clue if it would be 0% interest or what but at the very least $2 million a year) plus they are being asked to fork over a chunk of their arena revenues (along with AEG as well) to cover the $9 million hole left in the city’s revenue from the parking, it’s going to take some serious negotiating. And I am sure they’ve started talking about it all with different parties but those talks really won’t begin in earnest with the Maloofs until they get the parking deal done.
wallywagon11 - February 16, 2012
And I honestly don't know how
but the city has to at least make sure they can secure the old loan using the new arena. I have zero clue if that is easy or not but if they can’t then they need to pay up quicker than later.
wallywagon11 - February 16, 2012
The bottom line with all those points is that the Maloofs are pinched.
The question is, will they determine that it’s better to get out of the pinch by selling than by still trying to move to Anaheim (which could end up including a court battle, etc.)? My guess is there would be another Maloof Family Civil War, and I have no idea who or how that would be won.
AnotherStupidSN - February 16, 2012
Yep
War, but I think Joe and Gavin lose that fight.
lietothegirls - February 16, 2012
You mean, thinking that Joe and Gavin will be set against selling?
Maybe, but I got the feeling that the other siblings were the ones most juiced on living the easy life in SoCal, so maybe they would be pushing to fight the NBA to still try the move. In any case, there’s definitely a complicated dynamic of business interests versus personal interests with that family.
AnotherStupidSN - February 16, 2012
Exactly, I think Joe and Gavin get outvoted
lietothegirls - February 16, 2012
That is often a problem when you have a dissolving family fortune
No one is earning the money to keep the finances afloat so they all fight over the lifeboats as their fortunes sink.
Again, for ‘Qeurqe Joe and Gavin, this is the last of their persona, for George, the Palms is still his limelight claim even if all he owns is the shade the building provides. Yo’ Adrienne just wants to stay next to the TV cameras in Hollywood.
Poor Papa Maloof must have casket burns from spinning so fast in his crypt.
betweentheeyes - February 16, 2012
I thought they had him stuffed.
caseycheesecake - February 16, 2012
The NBA is negotiating on behalf of the Maloofs
Now, how that came about and what the limit of the NBA’s authority to say ‘this IS the deal’ to the Maloofs are I just don’t know.
lietothegirls - February 16, 2012
That's the 60 million dollar question.
Why aren’t the Maloofs negotiating, and how much say ($ in loans and therefore a sort of lien on the Kings) does the NBA have? And why are they doing this? My fantasy is that the team is going to be sold once the arena is ok’d, and the NBA is just stewarding this to the finish line.
kinglet - February 16, 2012
That is the reality
The Maloofs have little to no say in the matter. The meetings about the Kings staying have all been with Stern. Not the Maloofs. The staff running the organization behind the seens are NBA staff. The Maloofs are figureheads at this point.
CowbellKings - February 16, 2012
It's nice to hear someone else put it so plainly
I tried saying essentially the same thing on another thread some weeks ago, with little or no support. Someone else is thinking similarly above, that the league is “acting as if the Kings were in receivership”, even though that may not be technically/literally true.
kinglet - February 16, 2012
I agree. I think that Burkle and Stern cut this deal last year. Let them twist in the wind for a while to see if Sacramento can do its part, then bring up a demand for assurances and money from Maloofs on March 1, and if they can’t put together the cash, then say good bye to majority ownership.
ExPFCWintergreen - February 16, 2012
I think it ends up
The Maloofs will still owe less than 50 million on their Sac loan
They will owe the NBA 60 million for fronting their Arena yearly lease
They still owe the NBA whatever 100 million.
They will have leveraged over 200 million of a franchise worth 300 to up to 4 when ESC is done. If they sold for 4 they would walk away with about 100 million after subtracting other partners
ElRonToro - February 16, 2012
and now you see half of why I keep preaching Burkle
wallywagon11 - February 16, 2012
Kings are valued at only $300
according to Forbes as of January 2012.
kinglet - February 16, 2012
well, I honestly don't know how accurate Forbes is on their major league franchise estimates
wallywagon11 - February 16, 2012
True, and a franchise in Sacramento might have more value for someone with a lot of business and political ties to the city.
kinglet - February 16, 2012
Burkle, for example, as the first name that comes to mind.....
kinglet - February 16, 2012
Plus, I don't think that factors in the new revenue sharing or a new arena, both of which should bump the value.
But, yeah, the value is whatever someone will pay for it. So, who knows?
AnotherStupidSN - February 16, 2012
For those who don't think Burkle has a motive
Check his political ties, keeping the kings in the capital of California gives him the ultimate wine and dine place. I have no doubt he would keep the kings in Sac because it gives him the best opportunity to swoon and lobby politicians. Not mad at this all either, because in the end Kings are still in Sac and billionaire Burkle is happy.
ThomasGQ - February 16, 2012
The more I learn about him
the more I love him. Good man.
Carpeteria - February 16, 2012
I don't give a crap about his political affiliations
He could be a staunch supporter of every politician I hate, and I wouldn’t care.
Exhibit G - February 16, 2012
Agree with Carpeteria:
Good man.
caseycheesecake - February 16, 2012
The Yucaipa Companies....Ha! I grew up in Yucaipa. It's a town in southern Cal.
folsomfella - February 16, 2012
Reading SacBee Comments on this story
Wow. The mouth breathers are in full force this morning.
Tom A~! - February 16, 2012
Just STOP
lietothegirls - February 16, 2012
It always amazes me how much people who can't read
write
ElRonToro - February 16, 2012
It amazes me they remember to breathe
otis29 - February 16, 2012
unfortunately, breeding is instinctual
lietothegirls - February 16, 2012
I almost want to go look
but, I know that that way leads to madness.
Lotusprime - February 16, 2012
Maaaaaadnessssss!
But if you feel like arguing back, please fight the good fight
lietothegirls - February 16, 2012
I just did
lietothegirls - February 16, 2012
Now I'm deep in the weeds with those lamebrains
Thaaaanks :-)
lietothegirls - February 16, 2012
And in addition to the usual downers, Seattle trolls are now showing up
dampania - February 16, 2012
That's actually creating some unity!
lietothegirls - February 16, 2012
It's pretty funny
The more I read, the more I realize that the anti-arena groups don’t know what they are talking about. Most replys from them are just personal insults and factless claims.
SharkKings49 - February 16, 2012
Thats all they've ever been
The only valid reason to comment there is to have our posts read by other people who aren’t commenting.
kangsfan - February 16, 2012
How dare you insult Jason Thompson in that way!
wallywagon11 - February 16, 2012
lol
Exhibit G - February 16, 2012
On that topic...
Is it my imagination or is he keeping his mouth closed more?
Slam_Dunk - February 16, 2012
Based on the SacBee coments and some anti-arena people on Tuesday,
I think the majority of people against the arena are against any form of capitalism in general and don’t like the fact that we are building an arena that the “rich” Kings owners will use or that a corporation will profit from our parking.
SharkKings49 - February 16, 2012
The problem is it's an echo chamber with little moderation.
So things just go completely wacky in a hurry.
wallywagon11 - February 16, 2012
sorry when I saw moderation
I meant no mods with adequate ban hammers or time out tappers
wallywagon11 - February 16, 2012
Okay with the fact a land gift is part of this now
And if we were to assume the $200 million from parking is factoring in paying off the $52 million on the bonds (and doing this basically after reading a certain letter)
200+50+60=$310 million
or
200+50+85=$335 million
Personally I don’t quite get how the land gift can be part of the total but then again I’m an idiot.
wallywagon11 - February 16, 2012
They want $240 at least and will use some to pay off the tax excempt lots.
$30 mil from the hotels self imposing a tax on themselves, and a future sale of the Natomas land now valued at $25 million but might be worth more in three years when the ESC opens.
lietothegirls - February 16, 2012
the $30 million from the hotels though doesn't get included in that
you can’t unless you think the hotels have $30 million to give right now
wallywagon11 - February 16, 2012
What? You think every penny has to be upfront?
No chance we or anyone else builds it if that was the case.
lietothegirls - February 16, 2012
If it costs "X" dollars to build a building
How do you not fund the entire thing up front?
otis29 - February 16, 2012
Some kind of loan will be required
The $25 mil from Natomas, the $30 mil from the Hotels, the tix surcharge, none of those will be upfront and never were going to.
lietothegirls - February 16, 2012
of course not
nobody is including those items
(okay I kind of included the land sale up above as perhaps happening but emphasized I don’t see how that gets in there)
wallywagon11 - February 16, 2012
damn it
sorry of course those aren’t being included
wallywagon11 - February 16, 2012
Everyone is including those items
You don’t get close otherwise.
lietothegirls - February 16, 2012
sorry
no they aren’t being included in the $406 million price tag as “Hey the $30 milion from the hotels is $30 million toward the pricetag.” Granted some of the reporting has been bad and done it but that’s not how it works and everyone knows that.
wallywagon11 - February 16, 2012
No
I don’t know what you’re talking about and I believe you completely incorrect. Why else raise the money in installments like that?
lietothegirls - February 16, 2012
because it would either go towards financing or filling the city's revenue gap
… one year later
wallywagon11 - February 16, 2012
the comment I made below might help articulate what I am saying
I think the streams are crossed or something because this is the basic stuff we saw with Measures Q and R even.
wallywagon11 - February 16, 2012
$30 million from the hotels in 30 annual installments yes can absolutley go to a loan
but it won’t be $30 million of the $406 million pricetag
Sorry I thought you were saying that it would equal $30 million of the $406 million pricetag.
wallywagon11 - February 16, 2012
if the city backs up a loan though
the city may perhaps subject to a petition for a referendum
And if they somehow find a way to legally get a loophole where they won’t face one, it’s going to be hard to get the city council to go along if the rates are higher than if it was a normal municipal bond
wallywagon11 - February 16, 2012
Construction is payed in progress payments of a total contract.
caseycheesecake - February 16, 2012
yes but not in payments 30 years down the road
but before, during, and fairly soon after completion.
wallywagon11 - February 16, 2012
if you want to count it towards the construction cost, why yes it does
now if it was backing a loan or a municipal bond, that’s great but technically it’s financing for the loan or municipal bond. You can’t apply that $30 million as if it is $30 million of the total $406 million if it is in early installments of $1 million a year for 30 years unless we are talking about a 0% loan.
For example, say you get a $15,372.451.03 loan at a fixed 5% interest rate payed annually for 30 years. That would require $1 million worth of financing every year. Now you wouldn’t say “Hey we just got $30 million” to cover whatever you need that loan for, you say “We got $15,372,451.03.”
That’s what I mean. Not that it is irrelevant but it is the financing.
wallywagon11 - February 16, 2012
ug
*yearly installments (not early)
wallywagon11 - February 16, 2012
Derp Derp forgot the $40 million "or so" in selling public land
So actually looking at somewhere between $340 million and $375 million with all of those assumptions
wallywagon11 - February 16, 2012
I thought they weren't selling the land now because the counsel didn't want to do that
prowseinthehouse - February 16, 2012
Well their hesitant
but if it’s some of the land actually at the railyards and tied into the whole financial package for the arena they may think differently on that. They won’t likely be all that willing to sell some of their other land though that they mentioned that wasn’t right at the railyards.
wallywagon11 - February 16, 2012
*they're
worse than normal today. Sorry
wallywagon11 - February 16, 2012
As soon as I saw "their"
I knew you’d be posting this.
I love a site where people actually use good grammer.
polotown - February 16, 2012
What if they took the land being given from the Maloofs in Natomas
and flipped it for more money up front? Would that be a possible option to get another 25Million?
prowseinthehouse - February 16, 2012
if the land is the land Arco is on and used to back up the loan to the Kings
the proceeds would have to go towards paying off the loan. Further, if you could magically get out of that you can’t sell that land until the new arena is up or else the Kings have nowhere to play anyway.
wallywagon11 - February 16, 2012
Do we know what all the $400 million pricetag includes?
Might part of that total cost be potentially payable by current or future money that don’t necessarily need to be included on the term sheet? Perhaps federal or state dollars for infrastructure? Or, if those things are already accounted for outside of the $400 million, maybe there are other parts of it that don’t necessarily need to be paid for with upfront cash, but can be paid somehow with future revenue (naming rights, advertizing, taxes, fees, whatever)? Or do we know that the $400 million is $400 million in actual facility construction costs that needs to be paid for in order to have it approved and start work on it?
AnotherStupidSN - February 16, 2012
yeah it's all in the reports at the city website
$406 million includes the construction of the arena, the VIP parking, and the standard contingency money (a little extra to pay for overcharges which happen with about every large construction project and is required for one this big a project and is almost always used and usually even maxed out entirely).
wallywagon11 - February 16, 2012
I believe in the city's report
they talk about perhaps not doing the VIP parking right away but they weren’t sure whether they could really get away with that but it’s just $19 million of the project.
wallywagon11 - February 16, 2012
$30 mil in potential cost overruns was included, or $27m, something like that
lietothegirls - February 16, 2012
yeah sorry that's what I meant by contingency money
Pretty sure that legally in California you are required to have a 7% cost overrun fund (or contingency or whatever) for projects this big. You have to have that money inorder to be allowed to do this kind of project (and it is almost always used and often maxed out because, well things happen and it’s pretty big).
wallywagon11 - February 16, 2012
Easy mistake. I forgot $40 million at the 7-11 the other day. Oh well.
Carl - February 16, 2012
such is life
wallywagon11 - February 16, 2012
And the defensive rotations were terrible against the pick and roll!
oh sorry…wrong post….
gregory l - February 16, 2012
funny
lietothegirls - February 16, 2012
And yes, it was dreadful by both JT and Cousins
kept leaving their men.
lietothegirls - February 16, 2012
OH NOES GUYS
SEATTLE IS MAKING A BIG ANNOUNCEMENT!
LightningStrike5 - February 16, 2012
THEY ARE EXPECTING RAIN???
otis29 - February 16, 2012
I DON'T KNOW
IT SOUNDS SUPER SERIOUS GUYS
LightningStrike5 - February 16, 2012
Maybe New Orleans?
polotown - February 16, 2012
POLOTOWN REPORTS SEATTLE IS MOVING SPACE NEEDLE TO NEW ORLEANS
otis29 - February 16, 2012
IN THE TRADE THE CITIZENS OF SEATTLE GET FREE JUMBALAYA FOR LIFE
wallywagon11 - February 16, 2012
You owe me a keyboard!!
but I’ll settle for a beer if I ever make it out there to see the Kings in Sac
polotown - February 16, 2012
You got it
We’ll bust out some local goodness…maybe a Lockdown Stony Bar Scotch Ale.
otis29 - February 16, 2012
oohhh.....
fffindeed - February 16, 2012
I hate you
You just made me laugh out loud in front of my boss.
LightningStrike5 - February 16, 2012
that's happened to me on this site.
tryin not to laugh just makes it harder
Shizzo - February 16, 2012
TWSS
Kfan in Korea - February 16, 2012
OH MY GOD
90’S GRUDGE MUSIC IS POPULAR AGAIN!!!! HOLY SHIT!!!
wallywagon11 - February 16, 2012
The dream of the 90s is alive...in Portland
RJinFairOaks - February 16, 2012
just put a bird on it
wallywagon11 - February 16, 2012
Birds are SO OVER
swoosh91 - February 16, 2012
TWHS
chenp22 - February 16, 2012
The 1890's
I love Portlandia
polotown - February 16, 2012
As opposed to constant drizzle?
Ahhh, the suicide capital of the world!
lietothegirls - February 16, 2012
Do you say Drizzle?
zag392009 - February 16, 2012
tweeted this
but here is some quick math.
$85M. 60M (i’m guessing a 30 year lease Paid up front) + $25M land sale
$60M/30 yrs = $2M a year to use building for kings
$2M / 41 games (i know there are more but for this i’ll use 41) = $49K a game cost to the Maloofs
Easiest solution for Maloofs – add $3 charge to every ticket sold to every game – that covers the cost of the lease
That’s a simplified version of the real deal but it does show this is not too far out of reach – it’s all dependent on the Maloof finances and whether they can get that cash up front. Obviously you are not going to sell out every seat for every game so you’d probably be charging 3.25 or 3.50 – based on the expected occupancy. If they base their calculations for example on regular season games only anytime the team made the playoffs the maloofs could pocket that extra fee for themselves – building a greater incentive to invest in the team.
Madzillagd - February 16, 2012
This is why my optimism is not strong on this topic yet...
Wonderchild - February 16, 2012
Actually, it is reason to BE optimistic
It is a reasonable deal, the NBA has already backed the Kings staying in Sac, the Maloofs are overlimit on their NBA loan, and if the Maloofs can’t do it, someone else can.
polotown - February 16, 2012
Exactly
If Sac can do everything that Stern requested, then it’s going to be nearly impossible for him to back the Maloofs over Sac.
Poor owners leads to a poor NBA product. If the Maloofs can’t afford it, then Stern will try to push them to sell (using the limited power he has over the Maloofs) in order to protect the NBA. Burkle could afford it. I’m sure that Filipino MVP guy could afford it (assuming he is still interested).
SharkKings49 - February 16, 2012
I think this is the most likely scenario. I believe that last year, Stern – Burkle cut a deal, along with AEG (and Johnson), stating in essence that if Sacramento can put forward a good faith effort, say 1/2 the costs, and AEG can come up with a significant contribution to show commitment to run the project and oversee afterwards, then Stern will turn the screws on Maloofs, forcing them to put up money, knowing that they won’t be able to do this without bringing in Burkle as majority owner. Win for Stern and loss for Maloofs.
Burkle is a political player in democratic politics, as is Stern.
I think this is why Gavin and Joe are trying to scurry around Sacramento these days (as reported by Voisin), in an attempt to persuade Stern that they shouldn’t be whacked come put up or shut up time.
ExPFCWintergreen - February 16, 2012
much like the Laker Time Warner Deal
it’s a double edged sword
wallywagon11 - February 16, 2012
True, I guess.
Stern does like to collect Billionaires these days…
Wonderchild - February 16, 2012
Link?
polotown - February 16, 2012
From some dude named Chris Daniels in Seattle
about their announcement
Dub_TC - February 16, 2012
And the public money is through a TIF it appears
and the private money is largely based on a TV contract.
Unless something meaingful pops up, that’s not exactly very enticing at the moment.
wallywagon11 - February 16, 2012
Yeah, I don't see how or why a station would pay upfront money to help build
an arena for the promise that they get to broadcast the games if/when a team moves there.
Kfan in Korea - February 16, 2012
oh can totally see why someone wanting to create a tv network would do that so long as you got the tenant picked out
so long as the plan is to not build it until there is a pro sports team tenant, that’s fine from their perspective. Just once you get a tenant or two who is interested you might have the start of something.
But would they be interested? If the arena is being funded through the money on the tv contract deal, all the money being invested from that is going into the arena and not yearly to the NBA franchise owner. And on top of that you are including the idea of surcharges on tickets? At that point they could be better off building the arena themselves in their mind. And Seattle is in a real pickle because of that 2006 referendum requiring a net positive on investments. Fortunately for them they have a lot of very wealthy people but if a big chunk of that public money on this deal is in fact from the TV contract, good luck.
wallywagon11 - February 16, 2012
They don't have a tenant though
So what if they front the money and then no team comes? Oops, sorry, but thanks for the funding?
Kfan in Korea - February 16, 2012
Well I didn't watch the press conference but I will say (and this is only if the rumor is right though that a TV network deal is part of it)
that they won’t move forward with an arena without a tenant because … well the TV part of it. They just won’t. They’ll have whatever tenant at Key Arena or something else like the University or I have no clue but they aren’t using a TV network deal money without a tenant.
wallywagon11 - February 16, 2012
sorry
they’ve have the tenant play elsewhere in town while they build the thing but yeah they need a tenant signed up before they build (maybe just start with hockey first?).
wallywagon11 - February 16, 2012
dear lord
*they’d
worst day evAr
wallywagon11 - February 16, 2012
Wally'd
otis29 - February 16, 2012
Seems similar to that Jim Crandell report last year
Maybe their plans also include the winter olympics…
SharkKings49 - February 16, 2012
Game Changer!!!
kangsfan - February 16, 2012
So Seattle isn't going to move forward on getting an arena
unless they have a team ready to move. So this is even less relevant to Sacramento now. New Orleans though…
Aykis16 - February 16, 2012
Hmm...
So, the NBA sells the Hornets to Bill Gates who moves them to Seattle? What would their new name be, the “Mud Daubers”?
CowbellKings - February 16, 2012
Team name: The Seattle Windows
Team logo:
deadenddude - February 16, 2012
POS was supposed to post the Microsoft logo
deadenddude - February 16, 2012
The initial name will be The Dos
they’ll later upgrade the team to Windows after stealing Curry from the Silicon Valley Macs.
Kfan in Korea - February 16, 2012
Buffering...
kromeace - February 16, 2012
Damn, BSOD
otis29 - February 16, 2012
Lets hope they don't trade for iReke
kangsfan - February 16, 2012
I just thought the windows logo was really clear
kangsfan - February 16, 2012
They'd be named the Melindas, of course.
folsomfella - February 16, 2012
Well, if it was Chris Hansen, there's only one proper name for them.
’Da Bears.
HarveySpecter - February 16, 2012
Rec'd you perv
wallywagon11 - February 16, 2012
I suppose “the Predators” might also work in that case.
ExPFCWintergreen - February 16, 2012
Well, even more aptly,
I was trying to think of something that would be the enemy of a bear. Nothing really comes to mind right off the bat.
HarveySpecter - February 16, 2012
The honey pots?
AnotherStupidSN - February 16, 2012
Oh, bother.
HarveySpecter - February 16, 2012
Their arena would have a bunch of directory signs that say
“Why don’t you have a seat over there.”
/caruso
jveezy - February 16, 2012
haha good one
recced
deadenddude - February 16, 2012
Can someone make a Sheedy head sign for sitting behind the basket at PBP?
http://sports.yahoo.com/blogs/ncaab-the-dagger/alabama-fan-face-sign-instant-internet-hit-172350668.html
Scott Section 213 - February 16, 2012
Don't piss her off
ElRonToro - February 16, 2012
Really, we should be kissing her ass
not taunting her
deadenddude - February 16, 2012
I know what this past Tuesday's vote signified (a no harm in asking for offers vote)
and I don’t think she’ll approve the eventual deal, but just in case she really is trying to be reasonable about this and just happened to be really difficult to convince, we really do need to avoid pissing her off. We need one more yes vote and if by some miracle it’s hers, I’m not going to complain.
jveezy - February 16, 2012
All the possible permutations of the final "deal" are interesting but fraught with hazard for all parties..
My gut tells me that the Maloofs are counting on the NBA for more than just moral or strategic support — they may be bankrolling “the boys”. That said, with Anaheim lurking as a very interested and impatient suitor of the Kings, the NBA in Stern recognize that they can play one off against the other to garner the best deal possible that puts more cash in “the boys’” pockets while relieving the need for the NBA to provide more largesse. However, if the Kings do leave Sacramento they must immediately retire the loan and pay Sacramento around $70 million. If they stay, the Maloofs will need to provide a portion of the money to fund the arena — apparently around $80 million. If the Kings leave, Empty Bank Balance Arena just freed up some 40 dates for the foreseeable future. Hard schedule more Monster Truck Pulls and Ice shows that people will pay to see. If they stay, the need to commit to putting a winning team on the floor or all is for naught.
Natomaser - February 16, 2012
I don't believe that Stern "loves" Sacramento but
I do believe that he has had it with the Maloofs. Stern’s point of view is that the future financial health of the NBA relies on billionaire owners. So it is much more likely that he is using the circumstances in Sacramento to acquire a “better” NBA owner, not to put $ in pockets of “the boys.”
polotown - February 16, 2012
Burkle! Please?
PurpleLoco - February 16, 2012
I made the mistake this afternoon
of commenting on SacBee.Com for about 30-40 minutes. LIke shooting fish in a barrel. Nice to get back to some intelligence here at STR.
EJ08 - February 16, 2012
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