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February 25, 2011

Sacramento Kings ask for extension on Anaheim move request

The Sacramento Kings owners have asked the NBA for a delay of next Tuesday's filing deadline for relocation requests, saying they want (in the words of an NBA press statement) "the opportunity to discuss their options with the Board of Governors at its April 14-15 meeting." It's widely expected the request will be granted.

The question now becomes: What are they waiting for? Sacramento Mayor Kevin Johnson declared yesterday, "This means one thing. They are trying to cut a deal to leave." And added, "They haven't cut a deal yet, or they wouldn't need an extension."

All of which seems unarguable, but what, then, is the holdup in working out a deal? Several sports business experts tell the Sacramento Bee that an Anaheim move might not be as easy as it sounds: Former A's and 49ers exec Andy Dolich notes that the Los Angeles Lakers and Clippers are likely to oppose the Kings relocating to Southern California, and those teams "have significant influence" around the NBA.

Stanford sports economist Roger Noll, meanwhile, notes that in additional to working out a lease in Anaheim and any relocation fee due the Lakers and Clippers, the Maloofs would also have to figure out a broadcast deal: "You want to make sure your options are as good as what you have in Sacramento." Which sounds like a no-brainer — Orange County has more than double the population of Sacramento County — but again, having existing teams around complicates matters, as we've seen before.

For now, it looks like the Maloofs are hedging their bets, trying to get Sacramento city officials and the Anaheim Ducks owners to, in effect, bid against each other to provide the Kings with a home. The trick will come when it's time to pick a winner, especially if neither partner in this game of chicken has budged much, or if the Lakers and Clippers can really throw up significant roadblocks among the NBA owners. But for now, kicking the can down the road is the better part of valor.


Don't know if there is much hedging to be done. Sac can't offer much even IF they were to open their coffers, which I doubt KJ will do after his press conference yesterday. The Ducks may or may not still be offering 100 million dolllars. Either way, Anaheim is without question the more lucrative deal for the Maloofs long term in terms of TV deal, gate, and freebies from Samueli. To the Maloof's credit the only thing that seems to be keeping Sac in the game is that they currently have the team and the Maloofs have been happy in Sac and don't necessarily want to leave rather they feel they have no choice but to leave.

Posted by Dan on February 25, 2011 12:23 PM

Not sure how you (or anyone) can say whether Anaheim is the more lucrative deal for the Maloofs. It all depends on what kind of lease Samueli is offering, and we don't know that.

Posted by Neil deMause on February 25, 2011 12:59 PM

I say that just based on the raw data (ie: size and value of the TV market, corporate base to draw from, local population, average income of the locals, unemployment rates, and of course the 100 million Samueli is offering the Maloofs to make the move which would likely cover their payments to the Lakers, Clippers, and Sacramento. Sure the lease has to be taken into consideration, but I don't think it'll be a bad lease otherwise the Maloofs wouldn't be considering moving from an arena they own and turned a profit in last year.

Posted by Dan on February 25, 2011 01:05 PM

Well, they're clearly considering it because of all the demographic factors you mention. But Samueli knows those factors, too, and there's nothing stopping him from saying, "You want into my market? It's going to cost you in rent. If you don't like it, good luck finding another arena around here to accommodate you."

I think all we can say for sure about Samueli's lease offer right now is that it's good enough for the Maloofs to be continuing talks, but not so good that they've taken it yet. That still leaves a pretty wide band of possibilities.

Posted by Neil deMause on February 25, 2011 01:19 PM

Getting a SoCal broadcast deal would appear to be the easiest part of the process. Fox Sports must be desperate to get something to fill airtime with the Lakers bolting for their own network(s) with Time Warner. The Maloofs would have to divest themselves of their share of CSN California. I suspect the A's and Sharks would be interested in picking up the slack.

Posted by Marine Layer on February 25, 2011 01:58 PM

And Marine Layer -- I can't believe I'm now addressing a physical feature of our planet -- the Warriors, too. Between Sac-Modesto-Stockton, Reno, Fresno and points north of Sacramento, the Warriors would be eager to add what has to be over 4 million households to their potential market base.

It's really not hard to get from downtown Sac to Oakland Arena or AT&T Park in under 2 hours. I've done it many times. Aren't there people in NYC who travel 90-120 minutes to get to Knicks games?

Nah, the Maloofs are simply trying to avoid the Empty Arena Syndrome for their last dozen home games. If the balance of the Kings schedule sold out, they're still moving.

I absolutely believe this is a done deal, and Stern is helping orchestrate this.

Posted by MikeM on February 25, 2011 02:13 PM

No, there aren't all that many people in NYC who travel 90-120 minutes to get to Knicks games. (People 120 minutes away from Manhattan we call "Philadelphians.") Commute times like those work a lot better for football than for basketball, where most of the games are weeknights, so you need to be somewhere that people can easily get to after work.

Posted by Neil deMause on February 25, 2011 02:21 PM

A current member of the State Assembly and a former Board of Supervisor member named Roger Dickenson is now suggesting that local investors buy the Kings.

Oh, sure, Sacramento is loaded with billionaires. They're practically on every corner.

Just don't tell anyone, okay? This can just be our little secret.

If it's possible for this to get any stupider, I'm not sure I want to know about it.

Posted by MikeM on February 25, 2011 08:11 PM

Stern said his greatest regret was the failure of the Vancouver Grizzlies.

Bring the Kings to Vancouver! California has got plenty of teams. :p

Other markets: Pittsburgh, Kansas City and Dubai - they got money to burn over there.

Posted by Dave on February 25, 2011 11:42 PM

New Jersey will be looking for a team when the nets move to Brooklyn in 2 years. If you can have 3 teams in LA, why not NY metro for the kings? Of course, i'd guess the paperclips will eventually move from LA, so they will be back down to 2 if the kings did move to Anaheim

Posted by runner on February 26, 2011 01:14 PM

Gosh, I'm getting so tired of the franchise musical chairs going on! If people in Newark, San Jose, Vancouver, Anaheim, KC, Louisville, etc.. want a team so bad, they should just form one right on the spot. Then compete against like opponents until they are strong enough to compete against tougher competition. Institute Pro/Rel throughout professional basketball! There are more than enough courts and enough players to form at least 50-80 different teams throughout the country. David Stern and the different dumb ass owners of the NBA are the main obstacles! Sooner or later, the market would really have to be pried open and end this musical chair madness!

Posted by Jaime on February 26, 2011 05:48 PM

@ Jaime - sounds like someone's been reading Hardball. Or at least if memory serves me, that's the topic of that book. Break the league monopolies, Have competing leagues for each sport. Then when a hockey team in Edmonton threatens to leave if certain factors aren't met a team from another league smart enough to know Edmonton is rich in hockey tradition moves in and fills the void.

Posted by Andrew T on February 27, 2011 01:24 PM

We're getting about 5 articles per day in the Bee about this now. Huge success! The Clippers-Kings game tonight sold out! Woohoo!

Except they're not going to assemble an arena deal in the next 45 days. Sorry, it's still not going to happen.

Posted by MikeM on February 28, 2011 11:54 AM

Just curious how much you think the TV rights play into this. Sam Amick from Fanhouse wrote a little about it here.

Posted by John on February 28, 2011 12:30 PM

I assume it's mostly about the TV rights, especially since the Honda Center in Anaheim is only about five years newer than the Arco Arena in Sacramento. That's a double-edged sword, though: If Orange County is so valuable as a TV market, then the Lakers and Clippers are going to try to demand a ton in territorial rights fees to make up for the loss of potential ad sales. Sure, the NBA could tell them to go take a flying leap, but as we're seeing with the San Jose A's case, leagues generally aren't quick to do that.

Meanwhile, what's up with that Fanhouse article referring to the Kings as the "city's only professional sports team"? Are the River Cats semi-pro all of a sudden?

Posted by Neil deMause on February 28, 2011 01:02 PM

John, I think the Lakers' new TV deal is what opened the door even wider for the Kings to leave. The other point covered in this article -- that the Maloofs are "miffed" with KJ -- is yet another little shove for them to move through that door.

It's really hard for me to see how the Kings stay now. By refusing to hand over the documents Taylor-ICON needs and by asking for the relocation meeting to occur on April 15, the Maloofs have effectively shortened the 90 day negotiation period down to less than 50 days. Given that they've been trying for 11 years, I can't see them getting this done in 50 days.

I can just imagine trying for a rental car and hotel tax, too. First, most cars aren't rented in the City -- they're rented in the county. Second, the Council chambers would be filled with lobbyists opposed to a tax like this; the Council wouldn't do this.

We'll see. Pretty entertaining.

Pass the popcorn, please.

Posted by MikeM on February 28, 2011 01:03 PM

Neil. When you wrote about how the TV rights are a double-edged sword, you pointed out that the Lakers and Clippers are going to try and demand a ton in territorial rights fees. Just curious but how are territorial rights assessed? I know they are different from relocation fees and to be honest I assumed that the territorial rights were part of the contract when the owner bought the franchise. Not really sure how one necessarily gets a "right" to a specific dollar amount of a territory or how they assess the geography of it all.

Posted by John on February 28, 2011 01:12 PM

In the NBA, as I understand it, relocation fees are the territorial rights fees. And the league just makes them up on a case-by-case basis.

Right now the Lakers and Clippers aren't screaming about this because they want the Kings to get a new arena as much as anyone, so they're not going to throw a wrench into things unless it's necessary. But you can be sure that there are tons of behind-the-scenes talks going on, and will be more at the April owners' meeting. It's going to be all about how much the L.A. teams can demand without their fellow owners deciding they're being openly greedy, and then the Maloofs deciding if that's something they can pay.

The more I think about this, the more I don't see it getting done before the lockout. Way too many variables in play for anyone to want to set anything in stone when they don't know what the next CBA will look like. The Maloofs (or the league) can always issue a "we're going to give Sacramento one last chance" dictate, and use that as an excuse to punt everything to next year, when at least the labor situation will be settled.

Posted by Neil deMause on February 28, 2011 01:22 PM

Thanks Neil. With the rumors that it would cost Ellison $100+ million to move a team to San Jose I thought the territorial rights were somehow associated with the amount of money Lacob paid for the Warriors so I got a bit mixed up between territorial and relocation rights.

Posted by John on February 28, 2011 02:01 PM

I think the Ellison number was $150 million. But that was just Michael Ozanian's guesswork at what it would take to make the Warriors buzz off - there's no set figure for this stuff.

Moving teams is hard, which is why it doesn't happen very often. Not impossible, mind you, just harder than the sports pages would make it sound.

Posted by Neil deMause on February 28, 2011 02:06 PM

"The more I think about this, the more I don't see it getting done before the lockout."

The more I think about it, the less I think this is correct, for a couple reasons.

1) This rumor has been around for a couple years (a local TV station had an interview with an LA broadcaster in April 2009 about this), which is about as long as they've been working on it.

2) Seattle.

We're not seeing the entire 48 minutes here, just the last 18.7 seconds. The City of Sacramento has about 40 days to work out a deal. The Maloofs probably gave Sac ROFR here, and that's all we're getting to see; will we match?

I'd bet this has been fully vetted by the league offices by now.

Posted by MikeM on February 28, 2011 04:30 PM

How would Seattle even play into this? Seattle currently is not a viable market since they don't have an arena and no plans for one (not to mention their new city law making it harder to do so).

Posted by Dan on February 28, 2011 06:50 PM

Dan, just using Seattle as an example of Situations That Can Move More Quickly Than You Expected.

Point 1 was to show that things didn't just develop 2 weeks ago with Anaheim; point 2 is to show that even if it had developed within the last 2 weeks, things can still move quickly.

Posted by MikeM on February 28, 2011 07:43 PM

Now Power Balance is pulling out, at least temporarily:

Posted by MikeM on March 1, 2011 01:24 PM

The NBA has granted the Maloofs an extension until April 18th. How much you want to bet Power Balance will decide whether to put their name on the arena conveniently right around April 18th...

Either way though, it's not looking good for Sac as their ICON/Taylor report won't be done by April 18th.

Posted by Dan on March 1, 2011 02:34 PM

Honda Center may be only 4-5 years newer than Arco, but it seems a lot newer. Arco has more in common with a retired arenas like the Meadowlands and old Miami Arena, while Honda is a lot like the Palace, with plenty of suites and club seats. It still feels modern.

Posted by Mark on March 1, 2011 10:33 PM

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