More on the Sacramento Kings-aren’t-really-moving-to-Anaheim front:
- The Los Angeles Times reported Friday that unnamed NBA executives told the paper they “now expect the Kings to play next season in Sacramento.” It quoted one league official as saying that Sacramento Mayor Kevin Johnson’s presentation to the owners the previous week was “amazing,” and indicated that the NBA now intends to wait until next year to see if Johnson can actually pull off the revived corporate support and new arena plan that he has promised.
- Reading tea leaves, Sports Illustrated’s Sam Amick notes that there are “no NBA trips currently scheduled for Anaheim despite the fact that Stern made it clear last week that the owners intended to investigate that plan further.” The only question at this point, Amick writes, is whether Kings owners Joe and Gavin Maloof will go ahead and file for relocation on May 2 and have the NBA officially vote to block it, something that “would be unprecedented and would almost certainly take this Sacramento saga to the courts if they proceeded in that fashion.”
- The Cowbell Kingdom blog speculates that if the Maloofs want to be welcomed back to Sacramento for a possible lame-duck season, they might want to start by fixing the broken toilets at Arco Arena.
The big mystery now is how on earth KJ plans on getting an arena built, given that all previous proposals have crashed and burned, and last I checked no one had discovered an unknown sea of oil under Sacramento. From all accounts, Johnson’s presentation to the NBA only involved a feasibility study for a new arena, not an actual funding plan; and while potential Kings buyer Ron Burkle is a billionaire, he hasn’t indicated that he wants to shave off any of his billions by paying for a new arena.
If all those unnamed sources are to be believed, the next deadline could be March 2012, at which point Sacramento would either have to have an arena agreement in place, or we could be going through this all over again. If so, it’s going to be a really interesting ten months.
What, no Louisville? KFC Yum! Center seats 22,000 fat-bottomed KFC eaters, y’all, and they have plenty of tobacco AND health-care money (Humana) and a bigger metro than Salt Lake. Why not Kansas City? That is, why isn’t the Sprint Center pleading with this NBA franchise… are they more profitable without an “anchor tenant”? Depending on the next CBA, it may make more sense for the Maloofs to look to another small market than to play third leg on the Los Angeles tripod.
Why not Kansas City: www.fieldofschemes.com/news/archives/2009/09/3850_is_the_sprint_c.html
As for why not Louisville, there could be similar reasons there, though I’d guess that “bigger than Salt Lake!” in any case isn’t much of a lure compared to Anaheim, new arena or no new arena.
Neil;
No question that access to Anaheim/OC’s population would be good for the Maloofs… but would it be good for the NBA to split that (admittedly large) pie three ways? In essence, the league would be surrendering a market of, what 2m+, in exchange for splitting an existing market three ways rather than two. It’s possible that could lead to revenue growth, but it isn’t ‘real’ growth in my book.
It may not hurt the Lakers at all, but the same likely can’t be said for the Clippers. Any thoughts?
It’s really the market size argument at heart… if this move were truly better for the NBA, why wouldn’t you take the bottom 6 franchises in ‘local’ revenue and put them all in NY, LA and Chicago?
I struggle to believe that there is anyone in Anaheim that could be ‘converted’ into an NBA fan by the arrival of the Kings. If they aren’t already basketball/Laker fans (or masochists, and thus Clippers fans…), are they really going to be won over by the Kings?
It may well be that the Sprint Center is better off without an anchor tenant.
In addition to the market size argument that John raises, there’s the matter of the upcoming CBA. Next season might be a wash, or will likely at least be foreshortened. There are provisions under consideration that will affect the ways in which small markets can keep talent in town, avoiding the problem of super teams accumulating in NYC, Miami, and LA (think of LeBron and the Miami Brown Machine). Revenue sharing? My point is that it’s unclear if any particular owner currently failing in a small market such as Sacramento, New Orleans, or Memphis might be better off staying put or moving to another slightly better market or trying to crowd into a big one.
I still like the idea of the Kentucky Kings (it alliterates), even though the TrailBlazer fan in me doesn’t want to inflict that fate on Geoff Petrie.
And yet, through all this, the Maloofs still haven’t given any financial information to Taylor-ICON.
I speculate that behind-the-scenes, this plan is nowhere near as dead as some are claiming. News of the demise of the plans to move to Anaheim are greatly exaggerated. The Maloofs are still trying to move.
The LA Times article is a great source of debate. It’s the sentence in there where the “nuclear option”, as the sentence says, is being considered. When I read that, I just said, “Oh, BS!”. It’s just not a very credible article.
The $9.2M KJ claims to have pledges for is probably nowhere near as firm as it seems.
A $20M TV deal in Sac would lose even more money for Comcast than the current $11M deal does.
The Maloofs still have horrible family finances.
Burkle is trying to take over the Dodgers; he’s not rich enough to afford the Dodgers, Kings and Penguins. Yes, it is possible for the nation’s 98th richest person to get overextended. If he has to choose between the Dodgers and Kings, I am certain he’ll take the Dodgers.
I’d bet the Maloofs still file on May 2, because to wait a year loses them even more money, and they are running out of time. This is as much as about running into the arms of Samueli as it is anything else.
And after reading the Sam Amick article you link to, in addition to other articles he’s written, I just cannot consider him a credible source any longer.
Any article that uses that Friday LA Times article as a source of information is pretty much going to get what it deserves.
The NBA is now doing what it should: Vetting the $9.2M: www.news10.net/sports/article/135007/3/Sacramento-regional-corporate-sponsors-to-meet-NBA-on-Tuesday
That’s exactly what they should be doing.
John: I didn’t mean that Anaheim made sense for the NBA, but rather that I don’t see the Maloofs turning down a shot at OC for a middling market like Louisville.
If Sacramento doesn’t come through with an arena and Anaheim is ultimately a no-go … I dunno. Going from Sacramento to Louisville, even with a new arena, sounds a lot to me like the Hornets going from Charlotte to New Orleans – you’re just trading one set of problems for another.
Why is it your postings about the Kings seem to get way more interest than almost anything else you put out there?
I’ve been wondering about the sporadic remarks about contraction, too. The Maloofs owe A LOT of money overall, but their balances on the Kings are getting pretty close to the overall value of the franchise (not counting the arena — but you can do that, seeing as how the City of Sacramento owns the arena).
When a league is considering contraction, how big a PR and financial nightmare would it be to spend, say, $50M to relocate the Kings (some say the amount will be higher, and others say it will be less; I’m striving for what may be considered an “average” relocation fee), only to discover that they’re on a contraction short-list?
I’ve wondered if that might actually be part of the holdup. If the lockout happens, it won’t be much of a season anywhere next year; but if the BOG knows that the Kings are on a list of 6, and up to 4 of those will be contracted… Why move them?
I think there’s a very high chance contraction (as expensive as that would be) is being considered, and the Kings are pretty high on that short list.
The Maloofs borrowed a lot of money from the NBA; any league payment to the Maloofs that came from contraction would be reduced by the balance of the loan. I’d have to think that if you borrowed money from the NBA, you probably increased the odds of your own contraction. I wish we could see the list of what teams owe; I bet you’d find the Kings are at or near the top of that list.
On the issue of contraction:
One of the ongoing themes of the Field of Schemes site is the constant pressure teams apply to local governments to move to another town for a Better Deal on a Better Building. You can see this strategy failing in Minneapolis right now, by the way.
If there’s a surplus of NBA franchises, then this pressure is diminished. Hence, a crisis of overproduction… too much capital wrapped up in stuff that won’t sell.
But is it not also true that without those four or five marginal NBA franchises that might be picked off (Kings, Hornets, Grizzlies), is there more or less incentive for the OKCs and Louisvilles and Raleigh-Durhams to build new buildings and hope for a team? Does the Kansas City thing alluded to earlier show that there’s no real benefit to a municipality with a new building to have a team-sports franchise signed to a lease?
I’m wondering if the period of unchecked construction is closing with the building of the ballpark in Miami. Is the end of the arena gravy train in sight?
The Kansas City thing is an aberration, because they handed over their arena management to AEG, and AEG has no incentive to throw a sweetheart deal at a sports team. In cities that still run their own arenas, that’s not the case.
Let’s think through contraction: Say the NBA, at huge expense to the remaining owners, buys out the Kings, Hornets, Grizzlies, and Bucks. Suddenly those franchises are generating no local ticket sales, no local sponsorships, no local souvenir sales; and while the remaining 26 teams each get a larger cut of the national TV money, the next time there’s a TV contract up for negotiation, the networks are going to look at a league with a presence in four fewer markets and adjust their bid accordingly.
The upside would then lie entirely with creating new markets to scare old ones with. But do you really think that Sacramento and Memphis, once burned, are going to rush to outbid each other to lure a new team? And who are they going to lure, anyway, as you’ve just wiped off the map all of your problematic franchises?
Contraction really doesn’t make any sense. (*Maybe* for the NHL, but even then withdrawing from the Sun Belt and repopulating Canada would seem more logical.) Threatening contraction, on the other hand, makes all the sense in the world.
Anderson: I think that era is closing, if not already closed. Sam Gallioto (sp?), who heads the eponymous sports facility financing group, has said he considers that business to be effectively dead. Given the state of the nation (and it’s member states) finances, it’s hard to see how the gravy train can continue.
Furthermore, as the financial pressures begin to mount even on municipalities that have not, historically, broken the bank for sports facilities, there are simply fewer destinations available for use in the sports extortion game. Should the Kings move to Anaheim actually happen (as Mike keeps guaranteeing it will!), they will be leaving the spartan surrounds of their present arena not for a new, dazzling and bejewelled palace, but for the former Duck Pond in Anaheim – built in 1993 for $125m, give or take… and that’s more than $40m less than the San Jose Pavillion cost (opened 1993). The former Arco arena cost much less, but was built just 5 years earlier than Anaheim’s facility.
They aren’t moving into the Staples centre, in other words. And should they move, they will be very much the secondary tenant (at least until Samueli gains control, which is something Mike and I agree on completely as being the endgame).
To look at this move from the league’s point of view, it does nothing for TV (as they are losing the Sacramento market for nothing but a potential share of an Anaheim market that already has access to NBA basketball); it does nothing for the arena extortion chain (the modest Pond already being there) and probably irritates at least two of it’s present franchises.
Balanced against that, we have KC (where the new arena is in place, and the franchise has a history), Seattle (where a renovation was done 2 years after the Anaheim arena was built) or even Vancouver – with a wealthy owner who has already had dialogue with the league, and a modern building more in line with the NBA norm than Anaheim or Sacramento.
Right now the NBA has more available franchises than it has solid ownership prospects or potential ‘cooperative’ destinations. It’s problems are miniscule compared to the NHL’s similar quagmire, but nonetheless are not insignificant. Mr. Stern has some tapdancing to do to fix these issues… and we haven’t even begun talking about the Grizzlies yet…
John, if I ever made a “guarantee” remark, I guess I’d pick now to back off on that. However, if I was a gambler, I’d still bet on them applying on May 2, if for no other reason than CYA. You know, maybe this Taylor-ICON report comes back and stuns us all with privately-sold bonds and private funding. That would be wonderful. I don’t think for a second that will happen, but I may end up being surprised.
I don’t know if you live in or near Sac, but there is absolutely no love lost between the fans and the Maloofs now. If the Maloofs considered going to a game in Power Balance, and if I was in a position to do this, I’d strongly advise them to not go.
Moreover, if I was serious about moving my team to Anaheim, I wouldn’t spend 50 cents more than necessary to operate an NBA franchise next year. Free-agent shopping this summer (assuming there is one)? No — unless a huge bargain came along, and it was only to get me to the league minimum. Heck, I might even try to challenge the legality of the league minimum, if for no other reason than to show my desire to leave.
We’re going to find out what color the Maloofs stripes are this summer. I have a feeling fans won’t like the hue.
And Burkle is gone. There are no alternatives for local owners now. That’s one KJ blew; he never should have announced that one until it was far more solid, and he was blind-sided by the Dodgers and MLB on that one. I just can’t picture Burkle going after both franchises.
I think Neil meant this as a rhetorical question: “do you really think that Sacramento and Memphis, once burned, are going to rush to outbid each other to lure a new team?”
But what if we look at the history? Oakland spent a pretty penny to bring the Raiders back, with the same problematic ownership. New Orleans couldn’t keep the Jazz, then overspent for the Hornets. MSP lost the North Stars, then overspent for the Wild. Charlotte lost the Hornets, then overspent for the Bobcats. (Bracketing shared-venue examples like the Atlanta Thrashers.)
I take Neil’s general point that contraction is a great stick for the league to use as discipline with various local governments. My point is merely that local governments often reverse themselves and make preposterous decisions, as Field of Schemes more than adequately demonstrates.
You know, Anderson, I think Sacramento is just stupid enough to where if the Maloofs defaulted on their lease payments for the arena, and the Kings bolted, and were a huge hit in Anaheim… If all that happened, I still think people up here would bend over backwards to get a new team.
I really do.
This could even be construed as an argument to keep the Kings, couldn’t it?
Let’s be fair to Memphis. They keep their boxes sold and now that team is hot. Heisley would be a fool to move them or contract them.
On the other hand, let’s ridicule Seattle. That arean did undergo a renovation, but they couldn’t sell boxes last time around and the basketball capacity is tiny. In fact, that renovation is a bogeyman that keeps places like PB Pavilion and the Palace of Auburn Hills from being a candidate for renovation. If you don’t have the structure for a modern arena (post-United Center sightlines, multiple concourses, a large enough footprint for ancillary shops and an exclusive suite/club concourse) then there’s little point in fixing up an old building.
Hey Mike;
I think they will apply, you’re quite right. If nothing else, it demonstrates one more step in the “we can’t get a decent deal here” chain needed to get a move, to somewhere, at some time.
I thought the Maloofs owned the Arco arena??? Or do they just own the (favourable) lease?
Final question: Let’s say KJ can get a deal done to build a $160M-180M arena (the pond, with a little modernization) this summer (after the NBA tables their relocation request)… is that enough? I get that they are playing in an arena that cost about a third what Anaheim’s did to build, but what would be ‘enough’ (other than everything you can get, down to the last golden toilet)?
Ben: Key Arena seats about 17k for basketball. Anaheim seats just over 18k. Plenty of arenas are in the mid 17,000 range… so while the facility might be deemed too small, or too old, by NBA standards (whatever they are), the Sonics leaving had a lot more to do with Bennet’s agenda than it did with the building. Key Arena w $80M (in 1994 dollars) of renovations is still a better revenue producer than Arco at $40M construction cost. Neither one will make the Bulls owner jealous…
Kansas City, on the other hand, has a building better than any of the proposed options available.
I still think that the Maloofs are going to file for Anaheim relocation and probably get the approval needed to make it happen. The Maloofs live in SoCal and that’s where they want to be, Samueli will eventually own the team and should focus on trying to acquire the Angels from Arte Moreno (who in turn could own the Dodgers after that).
John Bladen,
Until recently, everyone around here thought the Maloofs owned the arena, but it turns out that in order to “lend” $73M, the City had to buy the arena and then lease it back to the “prior owners.”
Here’s the letter to the NBA that explains the mechanism:
www.cityofsacramento.org/kings/documents/Kings_Letter.pdf
Here’s the full contract:
www.cityofsacramento.org/treasurer/public_finance/official_statements/documents/pdf/OS_List_1997%20Lease%20Revenue%20Bonds%20Arco%20Arena%20Acquisition.pdf
The thing that makes me irate is that this was referred to as a “loan.” In fact, the local media still calls it that. But read the summary and tell me who owns the arena.
Yeah, I’m mad about it.
And now, in one of the sleaziest developments yet, Stutzman has gathered the 11,000 signatures required to force a vote in Anaheim on the $75M in bonds.
Why is this sleazy? Because while Stutzman is fighting for the rights of Anaheim voters on a $75M bond issue, he doesn’t think Sacramento voters should get to vote on a $300M bond issue to build an arena in Sacramento.
Oh, and Stutzman is from Sacramento, too.
Sleazy. One of the tackiest things I’ve ever seen Sacramento do. They deserve to lose on this one alone. I bet this is one move the NBA DOES notice.
Thanks for the links Mike. Wow. That’s really something.