Dear Gavin and Joe,

Cash in now! Cash in now, baby! Cash in now, honey! Cash in, Miss Smith!

at least you can tell your kids what it was like to be Geoff Petrie's boss

It seems murkier than ever to me. I wouldn't bet on anything right now.

But don't you prefer the way the Anaheim crew is doing business -- behind closed doors?

I am absolutely convinced there won't be a new arena in Sac. Why would you stick around until March 2012 if you're reasonably confident of that outcome? Not just reasonably, but very confident?

The demographics of Anaheim are just better, and they have the bird-in-hand of an arena, plus Samueli probably wants to own the team.

I haven't seen a reliable enough opinion of the Stutzman petition to know if it carries any weight. Anyone know about that? Why wouldn't the Anaheim City Council simply announce a special election for sometime in the next few months and make the petition meaningless?

At this point, I still can't rule out entirely the "Eh, we're moving anyway, sue us"-Sterling approach.

By the way, I've learned to not hang my symbolic hat on the peg of Voison's proverbial writing. Just had to get that out there.

Neil;

Mike posted a link on the last Sac story thread to some info on the Arco Arena 'buy back to lease' deal the Maloofs foisted upon Sacramento... apologies if you have covered it elsewhere, but could you give us the once over on how you think it might impact any potential move?

I've just read it for the first time, but it seems to me like a commitment from the Kings not to leave until the bond debt is cleared. Perhaps not iron clad, but a clear commitment.

So, as the letter from the city manager asks, how do you suppose they plan to deal with that? Seems like they don't have the cash, and as far as I can tell Samueli isn't offering to pay off that debt.

"So sue us" is an option, of course. Or in the Maloofs case, perhaps it is more of a "get in line" challenge?

The Maloofs would still supposedly be getting $50 million worth of the proceeds from the Anaheim bonds, no? That would go a long way toward paying off the remaining bond debt.

If they couldn't make the whole nut, I guess they could always say, "Fine, we'll pay you later, but we're out of here. Go ahead and sue us, suckers." I can't find the clause in the bond documents (or the lease - there are a lot of appendices in what Mike linked to), so I can't tell what remedies Sacramento would have in that situation.

The thing that really baffles me is how the Maloofs took on $74 million in arena debt in 1997, and 14 years later owe $77 million. Did they take out one of those crazy reverse mortgages or something?

It's probably just me, but I always chuckle when I read 'Maloof'. Well OF COURSE they are in financially disarray with a name like that. The Charlie Brown/Eeyore of the sports ownership world. :p

Neil;

I couldn't find anything concrete either, but as I said, this was a first look. I was operating under the assumption that the Maloofs had some immediate need for that $50M (like, to stave off foreclosure on one of their revenue engines, for example). But it could be that they plan to be good corporate citizens, or at least partial good corporate citizens (AKA a higher class of deadbeat).

As to the balance owing, so to speak, well... I think you've discovered the magic of making minimum interest only payments (most of the time) on an accelerating debt.

I'm also fuzzy on why they needed to take on $74M in bond debt obligation (as I understand it, it is still the city that is the issuer, yet another example of the credit facility of a municipality used to benefit a business, or non business)? I came late to this particular party, but wasn't the original Arco Arena construction cost around $40M? Did they paint the bathrooms in 1997 or something? I assumed they 'bought' the arena as is from the city, to the extent they bought it at all, of course.

Does it seem to anyone else like this pretty much ends it?

www.sacbee.com/2011/04/28/3587545/anaheim-sweetening-the-pot-by.html

As far as covering the arena debt is concerned, the City already, unfortunately, owns Power Balance Pavilion arena. The deal is structured so that we bought the arena from Jim Thomas, and he agreed to lease it back, with payments sufficient to cover the bonds as the lease. But the problem is, as with any lease, there are out clauses that cancel the lease; the City has obligations in the lease, one of which is to maintain the arena.

I think they can claim we didn't live up to our end of the bargain, therefore they don't have to make any more payments.

It's an unbelievably bad contract.

Rumors around now that the relocation fee will be $150M. If that's true, just fold the team. They already owe the NBA $75M, and may owe Sac $77M if they can't get out of the lease.

I suspect very strongly they'll figure out a way to get out of that lease. Wouldn't you try?

Mike, not sure why you say fold the team? There's a real easy out for the Maloofs if they can't meet their obligations... sell. Burkle is right there waiting to buy should they come to their senses.

"Does it seem to anyone else like this pretty much ends it?"

What, and waste a perfectly good bidding war?

With marginal to average NBA franchises changing hands for $450m plus (arena deals, of course, have significant bearing on price), you'd have to think that selling would be a better option by far.

It might not be Burkle (who could have other more pressing interests), but NBA teams have a deeper pool of suitors than you might think. If what you said about the arena deal 'outs' is accurate, Mike, why wouldn't a potential relocation owner sweep in with chequebook at the ready?