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April 15, 2011

Kings-to-Anaheim D-Day ... or not

If you were hoping for a quick resolution to the Sacramento Kings relocation drama this weekend, you may be disappointed. After the Kings owners gave a 90-minute presentation to NBA commissioner David Stern and the league's relocation committee yesterday, it looks as if the likely scenario now goes like this: The Maloof brothers file an official relocation request by Monday's deadline, then the league spends the next 60 days figuring out whether it can line up the votes to approve it — or, more to the point, whether it can come up with a territorial rights fee that will placate the erstwhile no votes without breaking the Maloofs' bank.

It's really hard to read tea leaves on this one, though, without any leaks about what conversations are going on at the actual meetings. Until then, we're left with an extremely thin gruel of rumor such as the San Jose Mercury News asking Joe Maloof whether a decision could come today, and Maloof texting back: "Yes, I think so."

Sacramento Mayor Kevin Johnson, meanwhile, told the NBA yesterday that Pittsburgh Penguins co-owner Ron Burkle is interested in buying the Kings and keeping them in Sacramento. Assuming a new arena is built, though, in which case the Maloofs would want to stay in Sacramento, too. Also assuming the Maloofs would sell, which so far they say they won't. Still, it might convince a couple of NBA owners that there are other options than cracking open the Lakers' and Clippers' market, so for KJ, it's certainly worth a shot, even if a low-percentage one.


The move to Anaheim is really about Samueli gradually gaining control of the Kings. The Kings aren't yet for sale, but if they were, it's Samueli that would get the team, not Burkle.

It's interesting to note that Burkle has ties to ICON, which built Pittsburgh's arena, and is also trying to put together a proposal for Sacramento.

I think it's possible that Burkle can get a team (the Hornets) and relocate them, but he'd probably just get into a bidding war that wouldn't get very high with Larry Ellison. My money would be on Ellison winning that battle, then possibly relocating the Hornets to San Jose, not Sacramento.

There's no way the NBA will approve a Kings replacement until an arena is under construction or completed. Seattle set the precedent for that. So no matter what happens with Burkle, I can't see Sac having an NBA team for at least 4 years, probably longer. And Seattle will get a team before Sacramento does. San Jose probably as well.

Posted by MikeM on April 15, 2011 12:26 PM

Now they've extended the relocation application deadline until May 2. I'm not sure why; the City won't have an arena plan by then, and the Maloofs say they are not selling. So what's going to change?

Posted by MikeM on April 15, 2011 01:58 PM

The Maloofs asked for the delay, according to the Bizjak tweet at the URL you provided. Which can only mean either: 1) they didn't have the votes, or 2) they're holding out hope that they can shake loose a new arena in Sacramento, because they'd prefer that to Anaheim.

I'm guessing #1, because as you say, Mike, nothing's likely to change in terms of an arena plan in the next two weeks.

Posted by Neil deMause on April 15, 2011 02:14 PM

Neil, if the Kings are "forced" to stay in Sacramento, I think you'll be quite appalled at some of the stuff that would start to happen. Take a look at the lease payment schedule to Sacramento. Notice something? The payments are accelerating now.

Staying in Sac is absolutely untenable now. This team was already at the salary-floor this year, and actually fell below it for a time, until they traded for a player and then waived him to bring their salary structure up to the floor. I don't think the NBA appreciated that move.

This talk of the Hornets moving here to replace the Kings is ridiculous too. The Hornets have a lease. Breaking it would be expensive.

I think we're going to be without an NBA team for at least 4 years, for pretty similar reasons Seattle is also without one.

Posted by MikeM on April 15, 2011 04:57 PM

The news clip with the Maloofs that got circulated yesterday paints a picture of Joe, Joe and Gavin who desperately want to leave Sacramento. I give it about a 1 in 10 shot that the Kings are back, but if it's with the Maloofs, things will be really weird...

Posted by MikeM on April 16, 2011 12:36 PM

Stern said that the extension was due to what was said, not what wasn't said. That sounds like KJ promising a big push for an arena deal by 5/2. Even if that doesn't happen I still think the move is no slam dunk. There is momentum towards charging a nine figure relocation fee, which would likely kill the deal.

Posted by Ben Miller on April 16, 2011 01:51 PM

The delay is because of the following reasons:

1. The Maloofs did not show sufficient information about their lease in Anaheim.

2. The Maloofs did not show sufficient information about their TV contract in Anaheim.

3. How will the new revenue in Anaheim be used in the revenue sharing process?

4. Shot in the dark by KJ on a new arena in Sac that has failed miserably several times in the past....The lowest on the this list by far.

Developers like David Taylor always like to pitch their designs but the moment you ask "How is this going to get paid for?" All developers pretty much say "that is not my problem"

There is no way to finance a new arena in Sacramento without public money. The model in sports today is to only use RDA funds (gone in California pretty much) for infrastructure, transportation issues and land. Then you have the team itself build privately on the land.

7M from Sac corporations? That is such peanuts to the overall problem. KJ is really wasting his time on this and I am shocked they are were they are right now.

@Ben Miller- The relocation fee will not be $100M, it will be in the $50M range max.

You lost that bet to me on if the Lakers/Clippers would be indeminfied:

Stern says there will be no consideration given to the impact of existing teams. Therefore I am right that the Lakers/Clippers will not be paid a single cent outside of traditional relocation fees that are spread across all the owners.

If the relocation fee was going to be more than $50M then Samueli and Anaheim would have put up more money than 75M for the bonds. Lets be real here and Stern knows this full well.

So much for the Queens in Sacramento....

Posted by Sid on April 16, 2011 08:48 PM

I forgot one more thing:

The Maloofs did not show how the 25M was going to be used in renovations to the Honda Center for basketball.

Pretty much the Maloofs came unprepared and they will for sure have this info in 2 weeks.

Posted by Sid on April 16, 2011 08:52 PM

Sid: "No consideration to the existing teams" was in response to whether opposition from the Lakers and Clippers could cause the move to be blocked. It was not about additional payment to the franchises (which will happen, either through an initial disbursal of the relocation fee or a lawsuit).

And let's make a second bet on that relocation fee. A $50M fee would be insane. Anything is possible, but NBA owners could make more than $50M by blocking the Kings' move, relocating the Hornets to Anaheim and selling them to Samueli (Ducks owner). The only possible rationale I could see for allowing such a small relocation fee is that they'd be sticking it to the Lakers. A far more likely outcome is that they'd use a possible relocation as a threat to encourage Buss to share some of that $3 billion he's getting from TWC over the next 20 years with the rest of the league.

Posted by Ben Miller on April 16, 2011 10:59 PM

One has to wonder if the Maloof boys have alternatives on the back burner should the Anaheim scenario fails. I would guess San Jose would be option one. Other options could include St Louis, Fort Myers, Norfolk, Montreal, Honolulu, Columbus, and Louisville. One would have to believe Cincinnati, Buffalo, Birmingham, Kansas City, Pittsburgh, Des Moines, Albuquerque, Las Vegas, San Diego, Nashville, Greensboro, and Jacksonville have been ruled for a number of reasons, primarily related to revenue potential and/or inadequate existing facilities, among many others.

Posted by Leon on April 17, 2011 07:26 PM

Why would Montreal be on the list? Absolutely no demand.

Posted by Tyler on April 18, 2011 01:01 AM

Leon - If the Anaheim move fails, then San Jose will probably be off the table as well, since the Lacob group just bought the GSW for somewhere north of $400M and would probably not appreciate a team moving into a building 30 miles to the south.

The only two cities with NBA-spec arenas and no NBA teams currently in the market are Louisville and KC. Unfortunately for the Maloofs, neither of those cities are any closer to their interests in Las Vegas.

So, for the boys, it's Anaheim or bust. The fact that David Stern placed the architect of the Sonics at the head of this most recent relocation committee is a very telling fact. Stern wants the NBA out of Sacto, and he's going to be willing to step on existing owners' toes to do it.

And in five or six years, look for the Chicago (Rosemont) Bucks and the New Jersey (Newark) Pacers and the San Jose Hornets in the NBA.

Posted by The Other JD on April 18, 2011 10:21 AM

Chicago Bucks? Having witnessed the 6 Bulls championships firsthand, I can honestly tell you there would be little if any support for a second Chicago NBA franchise. This is a Bulls town by far - a second team - a NHL, NBA or NFL - would not survive. Wirtz, Reinsdorf & McCaskeys would all block a 2nd team in a heartbeat. 4 Chicago pro-teams (the ones that really matter anyway) have won championships within the past 25 years in a title-starved city. Team loyalty is very strong here.

Posted by Mark on April 18, 2011 12:04 PM

Besides, while I see the upside for an individual owner in going into an already occupied major market, what's in it for the NBA as a whole? The Bucks would at best cannibalize the Bulls' fan base, and at the same time you'd lose Milwaukee fans entirely.

Anaheim, Newark, and San Jose are slightly special cases in that Orange County, New Jersey, and the South Bay are far enough away from existing teams that you could argue there's some untapped market share there. (Though they'd still cannibalize some from existing teams.) Chicago, I don't see it.

Posted by Neil deMause on April 18, 2011 12:13 PM

I'm a long time Bucks fan so I'd hate to see them leave, but their moving to Chicago would not necessarily result in simply a cannibalization of the Bulls fans. There are lots of Wisconsin expats in the Chicagoland area and there are also lots of fans who either don't want to pay Bulls ticket prices or don't like going to the area the United center is in. The Rosemont arena is by the airport in an easy to reach area and even if they charge 60% of what the Bulls charge they'd still beat their Milwaukee gates and have the benefit of greater TV ratings. Plus the team could still market themselves to Milwaukee fans and get themselves on Wisconsin's RSN (like the NHL's Wild).

As far as a benefit to the NBA goes, national TV ratings do tend to be higher when teams in big markets are featured on TV. There surely is an elasticity to that if too many teams left small markets, but 8 teams are already in markets outside of the top 25.

As a last note, it is hilarious to think that somehow Reinsdorf would have more sway in NBA decision making than Buss. The Lakers are the 800 pound gorilla of the league. If he can't keep another team out of the LA market (which he can't), then there's no chance in the world that Reinsdorf could keep a second team out of Chicago. The only thing more laughable is the notion that the bandwagon-hopping fans of Chicago are so brand loyal that they would never betray the Bulls. The Bears and the Cubs (more precisely, the party around the Cubs' stadium) are immune to competition, but Bulls, Sox and Hawks fans come and go depending on whether the team is decent.

Posted by Ben Miller on April 18, 2011 05:27 PM

Ben, if you think Chicago fans are going to support a pre-existing franchise, you are sadly, sadly mistaken. If moving teams to big cities was such a great idea, then we'd have have existing teams in the same league moving to Boston, Philadelphia, Houston, New York, etc to tap into those markets.

Yeah some misfits would show up to games, but not in the huge numbers one might expect. Plus there's already alternatives for Chicago fans: Minor & Independent League baseball, AHL Wolves, WNBA Sky, NU Wildcats & DePaul Blue Demons. Chicago fans already have a full sports plate.

The Bulls are on the upswing & the #1 seed in the East & could be decent for a while. Not exactly a lot of disgruntled Bulls fans right now, and no reason in hell to support (say an ex-Wisconsin team) at that. And is it a crime for fans not to pay & show to watch a lousy team play? Sounds like common sense to me.

I take it you're not from the Chicago area, and your tone is highly arrogant & delusional.

Posted by Mark on April 18, 2011 07:15 PM

From Milwaukee, and well acquainted to the -- to use your term -- "arrogant ('some misfits might show up at games') and delusional ('there's already alternatives for Chicago fans: ...DePaul Blue Demons')" points of view of Chicagoans.

Posted by Ben Miller on April 18, 2011 07:57 PM

"Why would Montreal be on the list? Absolutely no demand"

Was their any buzz in Montreal last year when the Toronto Raptors played an exhibition game there?

Posted by Daniel Francis on April 24, 2011 03:33 AM

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