The Sacramento Bee ran an interesting overview of the Sacramento Kings‘ financial situation yesterday, including much about how the economic downturn has exacerbated the financial gap between the NBA’s haves (who have big enough markets that they can still sell tickets) and the have-nots (who don’t).
Which, according to the Bee at least, is what’s driving the Kings owners’ arena drive:
In this climate, it’s easy to see why the Maloofs would focus on a new arena as a way to restore the team’s fortunes. Seven other NBA teams have moved into new buildings in the past decade.
Posh arenas don’t guarantee success. Memphis and Charlotte, for instance, take in less money than the Kings despite newer buildings.
But in 2009, when the NBA was scouting Cal Expo as an arena site, the Maloofs predicted a new arena could boost revenue by $13.7 million a year through “additional lower-level seating, premium club seats, and additional suites,” wrote consultant Economics Research Associates.
That’s a jump of more than 10 percent, and some experts say the new-arena effect could be considerably higher.
There’s something weird to this argument, even overlooking the fact that the Kings arena squabble started way before the economy tanked. Follow the bouncing logic: Lots of other NBA teams are getting new arenas, and even though some of them are actually doing worse in their new digs, the Maloofs figured they could add $13.7 million a year in revenues from a new home.
Only one problem: A $350 million arena would cost nearly twice that much. So what the Maloofs were actually saying — if the Bee has it right — is that they wanted the city of Sacramento to spend around $25 million a year so that they could increase their revenues by $13.7 million a year. Looked at that way, a new arena is less a “way to restore the team’s fortunes” than a really, really inefficient money-laundering scheme for public cash.
Which is what most of them are, more or less. But it’s unusual to see it laid out so bald-facedly.
I would take the position that would come out in the Taylor-ICON analysis, but there’s one problem with what I’m saying here: The Maloofs haven’t shared with Taylor-ICON the requested records. How can Taylor-ICON perform a financial analysis if they don’t have the numbers?
Since the Maloofs aren’t giving over the documents, don’t you think that bolsters the “They’re Leaving” argument?
I think the last holdup here is the relocation fees the NBA wants to charge. I theorize that if those fees get too high, the Maloofs will sell the franchise — or, worse yet, abandon it.
So far we have… Not sharing the documents with Taylor-ICON, registering the Anaheim Royals website and copyrighting the name, no season tickets available yet, the mayor’s comments, and your analysis above. With that in mind, can you remind me why I should gather that the Kings aren’t relocating? It’s quacking an awful lot like a duck, Neil.
“Lots of other NBA teams are getting new arenas, and even though some of them are actually doing worse in their new digs…”
I think you’re mis-reading that? It doesn’t say the Grizzlies and Bobcats are doing worse than they were before their new stadiums, it says they’re doing worse than the Kings are now?
Well, now the City of Anaheim is considering selling bonds to bring Honda Center up to NBA standards, and to build a practice facility.
But, you know, I feel certain the Kings aren’t leaving this year.
(Sorry, that was rude. You know my sense of humor by now.)
This IS HAPPENING, Neil.
A blogger up here in Sac is suggesting that the Maloofs are getting nervous about the scheduled date for the Anaheim City Council vote on the Honda Center bonds. Originally, it was scheduled for March 22, but this has been pushed back to April 12, which is two days before this matter is scheduled to go before the NBA Governors.
I personally think the blogger is reading too much into this. There has been too much said and too much done at this point in Sacramento; season-ticket sales for next year are torpedoed already (if there even is a season next year, that is).
Fans up here are lobbying hard for one more year, but attendance would set the wrong kind of records if that happened.
Anyway, here’s what the blogger had to say:
www.sactownroyalty.com/2011/3/20/2061564/source-honda-center-renovation-delay-worries-maloofs-could-kill
Well, in the same evening, we had Sacramento mayor Kevin Johnson say he was pretty sure that this was the Kings final weeks in Sac, and then a few hours later Anaheim mayor Tait said the announcements would come within one week.
Something happened yesterday to prompt this. I don’t know what, but there’s really no way these two mayors said what they said, within hours of each other, without some significant milestone having been reached.
KJ:
www.kevinjohnson.com/KevinsBlog/BlogArticles/tabid/72/Article/809/watching-kings-prepare-to-leave-is-like-slow-death.aspx
Tait:
www.ocregister.com/news/council-293235-kings-anaheim.html
Mayor Tait would not have made these comments if he wasn’t certain the deal was done. I just don’t see it any other way.
And now we have a last-second offer from parties in Sacramento:
www.fox40.com/news/headlines/ktxl-new-plan-could-be-gamechanger-for-sacramento-kings-20110323,0,6232256.story
Let me see if I’m skeptical.
(Goes away for a minute. Comes back.)
Yup, I’m skeptical.
This has spawned some pretty funny conversations on local Kings blogs, though. “Ooooo, do you think we can derail a plan that has been in the works for over 2 years with a last-second, not very well thought out plan? I do!”.