And here it is, the moment you’ve all been waiting for, Sacramento Mayor Kevin Johnson’s plan to keep the Kings in Sacramento:
- As expected, the so-called “whales” who will be bidding to buy the team are Pittsburgh Penguins minority owner and supermarket baron Ron Burkle and 24-Hour Fitness founder Mark Mastrov, who, according to Johnson, are preparing a “very strong and competitive” bid for the Kings. That bid will be sent to the NBA today, and then forwarded to the team’s current owners, the Maloof brothers, at which point … pretty much anything can happen, depending on whether the league and/or the Maloofs like the bid.
- At the same time, Burkle is reportedly moving ahead on a plan to build a new arena at the site of the Downtown Plaza mall, which is a switch from last year’s proposed arena site. A “source close to the deal” (jeez, again?) claimed that this could be done for only $400 million (not clear whether or not this includes land costs), and that it would be paid for by… by…
- Nobody actually knows how it would be paid for. And by “nobody,” that apparently includes both Johnson and Burkle: The Sacramento Bee reports that “City Manager John Shirey said that city officials have not yet launched formal negotiations with Burkle and Mastrov over a financing term sheet for an arena, but that those talks are expected to begin soon.” There’s the usual talk about sale of future parking rights, development of extra land on the site (Johnson alluded yesterday to “a mini-L.A. Live”), ticket taxes, and other assorted stuff, but given that this wasn’t enough to adequately fund an arena plan last year, resolving this is more than just a matter of crossing a few t’s — they still need to find actual money.
- Because no announcement is worth announcing unless there are some surprises, Johnson said that Mastrov wants to revive the Sacramento Monarchs WNBA team, and that former Kings guard Mitch Richmond would be a minority investor.
So, there we are. There are so many wild cards still in play right now — will Burkle and the city be able to come up with an arena plan that makes any sense? will the NBA reject the Seattle bid to buy the team if there’s a viable plan to keep them in town? what about an only half-viable bid? if the Seattle bid is rejected, will the Maloofs agree to sell to Burkle and Mastrov or insist on keeping the team themselves? — that it’s really tough to predict anything at the moment. The key right now, it appears, remains the arena money: If KJ and the whales can somehow figure out how to come up with enough cash in a way that makes any sense, then this whole crazy plan might just work. If not, the NBA will have plenty of grounds to take the bird in the hand, approving the Seattle sale and telling Sacramento, “Sorry, maybe you can have the next franchise to move. See how it worked for Seattle?”
Sad state of affairs for Sacramento. Town with fine old buildings and tons of trees which the Crony Capitalists and their Government Re-developer henchmen try to destroy as quickly as possible. Lively Gay scene, if you are into that, and zillions of college kids (two large state universities) but beyond that zilch except for the slime ball lobbyists who fly in from LA. Nothing else.
That’s it. Now with the demise of the Sac Bee and the local journalists (if TV BS artists can be called that) one must go to the LA Times to even get the straight dope on CA government. Schwarzenegger did not live in Sacramento and neither does Jerry Brown which says a lot.
Choice between Seattle and Sacramento is a no brainer. But who really cares about a bunch of over paid tall or fat (Charles Barkley) black guys who play lackadaisical lazy ass form of basketball that most time resembles the old WWF staged matches.
My understanding is that an arena at the new lcoation would require that thousands of city owned parking spaces be torn down. Is this true?
Torn up, not down, since they’re underground parking spaces. But otherwise yes:
http://www.sacbee.com/2013/02/03/5161046/both-downtown-plaza-and-sacramento.html
I really pretty much disagree with your point in bullet 1, “pretty much anything can happen.”
No it can’t. There is a valid, signed PSA between the Maloofs and Hansen/Ballmer, and in that contract is an exclusive right to negotiate. The Maloofs really cannot negotiate with anyone else without mutual consent from some extremely motivated buyers. Sure, the buyer and seller could agree to waive that, but… Come on. Really? When you say “pretty much anything can happen”, that’s one of the things I’d preclude.
Dozens of lawyers worked on this, and the Maloofs want to sell to a particular party for a particular price. It’s going to be very difficult to change that course.
Bob: 3,700. Yup, it’s true. And that would have the effect of reducing the value of the parking lease-out. And they haven’t started their EIR — that will take 12-18 months.
Sergio: I like your style.
Neil,
I believe the article in the Bee indicated that Burkle’s associate Darius Anderson is part of the group that owns the proposed arena site.
The Sacramento plan actually make a hell of a lot of sense if the money is there. Malls are struggling so an LA Live-style development in place of Sacto’s mall would seem to be a good use of the space.
On the Seattle sale being a done deal, who knows? Al Davis and Donald Sterling were able to move where they wanted to move but that was decades ago. At the least it looks like Sacto could get a Charlotte-style deal where they boot the hated owner and are promised a relocated or expansion team once a new building goes up.
As a Bucks fan this whole thing is disconcerting. I always thought the Sacto arena proposals were pie in the sky but if this thing goes they may be looking for a team right when the Bucks’ lease is up in 2018.
It’s still pie in the sky. There will be a lot of public money involved but it’s not clear if there is enough available and what’s available won’t resulting in harming the Sacramento’s General Fund for decades.
What Jason said.
I just don’t see how KJ can look anyone in the eye at this point and say, “Yes, we have an approved plan to contribute $255M towards this arena.”
If you believe he does, you’ll believe anything.
I think the next step is a “term sheet” that will outline the city’s contribution. KJ will probably take that to the NBA BOG as his “approved plan.” The term sheet will probably say we’ll get the $255M thorough the parking lease-out, land sales, bake sales, spare change found in city parks, etc. but won’t address the issue as to whether or not $255M could be squeezed from those places.
Jason scores again.
But actually, I think the next step is a statement from Maloof spokes-attorney Eric Rose, to the effect of something like, “We have reviewed this offer, and we will not accept the terms it proposes.” I think such a statement could come within 2 weeks.
This talk about another ‘bid’ isn’t entirely accurate. A deal has already been struck between the Maloof’s and Hansen’s group. The NBA BOG vote is to ratify the sale to Hansen or to reject it. Full stop. It is not a vote on the SAC bid vs Hansen’s bid.
If the Seattle group walked away today, the Maloof’s continue to own the team and it is their choice on if or who to then sell the team to—their choice. And therein lies the problem for Sacramento: NBA owners won’t want anyone telling any of the individual owners who they can one day sell to and who they cannot sell their team to if they were to ever sell.
If the BOG votes down the Seattle offer, they are essentially saying, we want to set a precedent so that none of us can sell our franchises to whoever we please done the road. Not going to happen.
Why would any owner ever want to put limits on who they can sell to? It defies logic, especially among greedy NBA owners. The moment any limits emerge, then the price they’re hoping to sell their team for immediately falls, it is the most elementary math equation imaginable.
The NBA BOG will ratify the sale to Hansen’s group next month. They’ll try to spin it as best they can, saying something like ‘Sacramento and its great fans put a valiant effort and that it’s a shame one city had to lose (in fact Stern has already said this) but Seattle won out this time and it’s time to move on.’
The Sacramento Bee says that a “preliminary” term sheet could go to the City Council in April. So KJ plans to go to NYC with a “preliminary” term sheet. I don’t know what Seattle has for its arena deal but will the NBA BOG go for “preliminary?”
http://www.sacbee.com/2013/03/01/5228653/proud-day-for-sacramento-mastrov.html
so what Hoffmanhere says is that the Magoofs and Hansen/Ballmer have what they call in the parlance, an AGREEMENT, with some consideration already put down to seal the AGREEMENT and all the NBA is being asked to do is check out the new Owners and see if they have the cash and needed high moral standards necessary for the NBA? and then the new Owners want to move the team from a real dump to a great city?
Boy that almost sounds too logical
I keep going back to that transcript from the All Star Game, and Stern said he wanted partners, a bid, a well-formed arena plan and a subsidy in place “well before” March 1.
Did KJ meet those goals? Not even close. Especially when we now hear the offer was a bit less than Hansen’s. Oh, but we’re assured it was “competitive.”
Sure. That’s the ticket. It’s a really good offer — almost as good as the one they’ve already agreed to accept.
Sounds like a winning strategy there, KJ. Ooooh, do that again.
What was that transcript from MikeM ? At the major press conference he didn’t say anything so concrete about what he’d require of KJ. He even said it wasn’t going to come down to an economic issue (525, 526). He said KJ said “before March 1st” but didn’t require it.
And darn you for making me listen to over 20 minutes of David Stern ramble. About the only pleasant thing was the way he shut down Chris Daniels’ question at 16 min in.
http://www.nba.com/video/channels/nba_tv/2013/02/17/20130216-stern-full-presser-.nba/
ChefJoe:
http://www.bleedblackandpurple.com/2013/02/david-stern-discusses-future-of-kings.html
Fourth paragraph.
Seattle has a binding MOU that requires further votes/approval/study results before a binding final vote. That sounds a lot like a voted, preliminary terms sheet to me, with more legalese.
Yeah, I’m not seeing anything in there about what he required. He just said KJ was going to submit a bid likely well before March 1st that included a significant subsidy for an arena. Nothing specifically about partners or subsidy already in place (although I’m sure that helps), and KJ hit March 1st deadline rather than beat it (from what the public’s heard). KJ still has time to nail some details down before the BoG and they may just like where Sac is going well enough to give him some more time before November. It’s not like the KeyArena is going anywhere or Hansen has any other team-buying opportunities coming up soon.
Neil and I have had this argument before, and neither of us pressed it very hard. I won’t this time, either.
I just keep hearing one of the most well-known attorneys in the country saying,
“That’s all we have, the mayor has said that we’ll have that likely well before March 1 which appears in our constitution for when we must receive applications to move, it’s sort of irrelevant exactly but that was a good enough date so we selected that.”
and “we selected that” makes it sound like a deadline. He was kind of soft-pedaling when he said it, for sure. But I read this as KJ and Stern agreed he better have a competitive bid (which implies a whale), an arena plan and a defined subsidy in place on or before March 1 — or else.
And yes, I admit the “or else” part is what I hear when I read this statement. But given who said it, I don’t believe it’s a stretch at all.
Fair enough? And you can disagree with me. I just think there’s logic behind what I’m saying.
Yeah, ok, I’ll disagree with you. I think Stern and the NBA would really like to use the Seattle threat for a bit longer than a few months. Just having a strong offer put forth by Hansen accomplishes the goal of making perceived team value rise. Now Stern just wants to get all the lagging ducklings in a row.
I’ll disagree with both of you, if that’s okay. I expect Stern and the NBA will make a decision in April, because they want to get this resolved for next season. But until then, there’s no reason for them to rule out Sacramento — even if their arena plan is half-baked and full of holes, if they’re holes that the city would be left having to fix later (like Minnesota with its Vikings e-pulltab money), then it’s not the NBA’s problem. And as much as the NBA owners want to be able to sell to whoever they want when the time comes, 1) this is the Maloofs, who everybody hates, and 2) they have an equal incentive to encourage home cities to ante up for arenas when teams threaten to move, and rewarding Sacramento would do that in spades.
If I had to put money on it, I’d still bet on the team moving to Seattle, if only because it seems like the Sacramento plan could blow up about six different ways in the next month and a half. But I’d take Sacramento if you gave me odds.
Neil, I am shocked that you’d disagree with me!
Just kidding, of course. I love the work you do here. Someone has to expose these stupid plots.
Anyway, KCRA reported tonight that the rumor is, There is no way the Maloofs will agree to a deal to keep the Kings in Sac. However, it is definitely to their benefit to keep hope alive, so more than 4,000 show up to games. So, as much as they’d like to release a statement 6 hours ago that says (I’m paraphrasing), “Piss off, KJ”, they’ll bite their tongues in the hopes that Sacramento keeps trying.
It’s all about losing a little less money for them.
A signed, valid PSA that the BOG has nearly no chance of rejecting. Deal with it, Sac-Ra-Men-To chanters.
@sergio
It goes well beyond basketball. A downtown arena would house over 160 non NBA events a year. There is something for everyone.
@Heffmanhere
Actually, there has been a precedent set by the league in telling a fellow owner who they can sell to. In the summer of 1999, Vancouver Grizzly ownership had a deal subject to NBA approval to sell the team to St. Louis businessman Robert Lurie. While he publically denied it, everyone knew that Lurie wanted the team in St. Louis. The BOG and Stern had no interest in St. Louis so they denied the sale.
I’m not saying that the same will happen here but the precedent has been set.
http://en.wikipedia.org/wiki/Vancouver_Grizzlies_relocation_to_Memphis
Wikipedia (possibly more reliable than anonymous sources): Instead, McCaw used Washington’s bid to leverage a higher sales price with Bill Laurie, who offered US$148 million for the Grizzlies, and a US$52 million bonus if the team ultimately relocated to St. Louis. ….
After the deal was announced, Commissioner of the NBA David Stern stated that he was opposed to a relocation, showing to that no NBA franchise had moved since the mid-1980s. He stated that his goal was that the Grizzlies remain in Vancouver and succeed there. The NBA Board of Governors’ Finance Committee also made negative statements, as the purchase agreement was structured with incentives to move the team. The deal was then renegotiated before the board could vote on the issue. On 21 January 2001, Laurie announced that he had paid McCaw an undisclosed amount to walk away from the deal.
Trueblood: Only 14% of US arenas host 200 events a year. I’m guessing none of those are in cities the size of Sacramento.
https://www.fieldofschemes.com/2012/08/31/3740/seattle-virginia-beach-arena-projections-anticipate-nearly-double-the-national-average-in-annual-events/
@Neil
OK, my estimate was a little high but the point remains. The arena wouldn’t be just for Kings games or “lazy” players. There are other events that justify the arena’s existence if funded properly. That is something we agree on. I don’t want bogus funds going towards it either but if they can maybe get more private dollars from Burkle then I think this is a good deal for all involved. How much private money is up for debate. We’ll see.
@chefjoe
Same thing. The league wanted the team to stay in Vancouver. Wikipedia says it was restructured BEFORE it could go to vote. Had it gone to a vote of the BOG, they very well may have denied the sale which would’ve set the precedent that Sacramento is hoping will happen next month.
Trueblood, it’s possible something will happen to change the situation before the BoG meetings April 18-19 (wouldn’t be the first time applications have been withdrawn). The NBA would have to schedule a special vote to make any decisions before their regular meeting.
Neil/MikeM:
I still think it’s most likely that the NBA will take the Hansen deal. They can get rid of the Maloofs right now if they do that, and worry about serving the long suffering Sacramento fans later on. As Seattle, Winnipeg, Minnesota and other locations have shown, spurned fans tend not to take a hard line on replacement teams – even if they have to wait a decade or two.
However, the NBA know how motivated Hansen is and that he has an arena deal in place.
It is not impossible that they could scoop the “save the Kings” windfall cash in Sacramento, refuse to allow the Maloofs to sell for relocation (and arrange a buy out of their share of the Kings for an amount equal to what Hansen was offering), then sell an expansion franchise to Hansen.
It’s unlikely, as I say. But there are many ways the NBA could extract the absolute maximum dollars from “keeping” or moving the Kings.
It’s true Hansen might throw up his hands and walk… but I doubt it. You don’t agree to arena deals like he did unless you really, really want to own the Seattle SuperSonics.
Trueblood:
While I agree that there is some precedent, the fact is that the NBA doesn’t need any precedent to tell the Maloofs who they may sell to. The league has absolute discretion to make it’s own decisions as to relocation.
We tend to think of sports franchises like independent businesses. In fact, they are not. They are far more like franchise restaurant outlets than individual businesses.
The Maloofs do not own a fully portable business asset. They own (part of) the Sacramento Kings, a NBA franchise operating in Sacramento. They can not turn the Sacramento Kings into any other franchise without the express permission of the league itself.
Any party to the proposed deal w Hansen could choose to file legal action if the sale were scuttled by the league. However, it is extraordinarily unlikely that the case would even make it to court given the absolute rights the league holds in these matters, and virtually impossible that they would win any damages even if the case did.
It wouldn’t matter if Hansen and Ballmer had offered $5bn for the franchise. The Seattle Supersonics are not the Maloof’s to sell anymore than a second team in Chicago or a third in NY is theirs to sell.
I’m with John. The most likely scenario right now looks like the NBA giving Hansen the team because he has all his ducks in a row and Seattle’s the surer market, while giving Sacramento a pat on the head and a “Sorry it didn’t work out for you this time, but feel free to throw money at us again next time there’s a franchise up for grabs.” But that’s far from certain, and whatever happens, it’ll be less because of any legal niceties than about what the NBA owners think is in their own (not necessarily entirely rational) self-interest.
Remember how we just went through all this two years ago with Anaheim? Everybody was dissecting the precedents about what territorial rights were worth and antitrust rulings and all that, and in the end it came down to the NBA deciding, “Meh, not worth pissing off the Lakers and the Clippers for.” This is going to be about whatever 30 guys in a room feel like doing in April.
I guess nobody has actually ever seen Seattle
Sacramento is a suburban eyesore with absolutely NO downtown, very little urban life, but some nice old wood buildings with plenty of trees…It is a government DOLE town…folks work for the State and then leave at 4 for the really hideous burbs…one does reach a truly professional and upscale class until one leaves the valley going east to the Foothills…It is no coincidence that Intel’s satellite is located up against the Foothills…the business’ that attract the bright crowd are either in Davis or bordering/in the Foothills of the Sierra
Lake Washington, Lake Union, the Sound, Queen Ann, the Fremont, University, Greenlake…and downtown where you can easily access Lake Union for your kayak or seaplane…Key Arena is located conveniently close but suppose the new arena will be south of downtown near the new separate baseball and football stadiums…Husky Arena to the north of downtown on Lake Washington has been recently redone…and the wealth of Seattle makes Sacramento look like a piker…
for cities, there’s no comparison between Portland/Seattle and Sacramento…Portland/Seattle are in the class of San Francisco, Sacramento is a dump…
money, location, aesthetics, city, people, education all favor Seattle
Sergio:
Sacramento’s perceived physical and cultural shortcomings will make little difference in the eyes of NBA owners, the same group that five years ago overwhelmingly approved the Sonics relocation from picturesque and wealthy Seattle to nowhere-as-near picturesque and not-as-wealthy Oklahoma City. Oklahoma City! Once upon a time, the league allowed the Rockets to leave San Diego (America’s Finest City) and move to Houston and the Grizzlies to depart Vancouver for Memphis. Enough said!
This is and will be about like everything else in pro sports: money. L.A. despite being on the ocean and having mountains has no NFL team while smaller cities, both in size and wealth , and lacking the same physical features have teams due to a eager willingness to provide corporate welfare which L.A isn’t. Whichever city provides the most money towards a new arena and has an ownership group happy to overpay the most gets the team. If Seattle gets the Kings it won’t be simply because of lakes and hip neighborhoods.
I think the team moves to Seattle. Why? I don’t think the arena deal in Sacramento will be finalized and I don’t think that Mastrow has matched the Seattle offer. If they deny Hansen there is the possibility the Maloof’s don’t sell and try to move the team next year or sell it again. And at this point I think that the NBA BOG wants above all else to get rid of the Maloof’s.
You know, Sergio, Sacramento actually has a very nice midtown. But that’s part of the reason I oppose this arena plan. I think it’ll wreck what we have. They’re already talking special-tax districts, and I do not believe they will extend 2 blocks. Try 2 miles; and that will kill our great midtown.
I went to DC a couple years ago, and I must say, definitely one of the best restaurant scenes in the US. But while I was there, it hit me: Sacramento, believe it or not, does too. Way above average.
Anyway, Marcos prints a nice column here:
http://www.sacbee.com/2013/03/03/5231707/marcos-breton-arena-subsidy-could.html
“Yeah, these deals never work out, but let’s do it anyway.” Sw-weet.
ILWU is dragging their hopeless case back to court.
http://www.sacbee.com/2013/03/04/5235339/seattle-longshore-union-heads.html
Its not hopeless. We will see what the appeals court says.
It is hopeless. Their argument is the judge was wrong. A judicial incompetence argument will only hurt their cause further.
Sacbee continues to insist that the Maloof-Hansen PSA is merely a tentative agreement. Their words, not mine.
I think they’re nuts. This is a deal they’ll work hard to keep alive. If the BOG tells them they have to make changes — they will make changes.
I guess a rumor started on the Seattle Times that the relocation fee would be $75M. Neil, how could they justify $30M to move the Sonics to OKC, then suddenly require $75M to move a team back to Seattle? That doesn’t sound like a fee to me; it sounds like punishment. Are they allowed to do that?
Well, Hansen and Ballmer can always start their own basketball league if they don’t want to play by whatever arbitrary rules the NBA creates for their league. If it were a free market then cities/the public could own (and profit from) the teams… after the Celtics the NBA outlawed that public transaction of shares.
You also have to remember that Seattle (the city) held the head of the relocation committee’s (Bennett’s) feet to the fire when he relocated and collected another $45 M from him… above the NBA’s $30M relocation fee.
Also, it’s one thing when you’re already an owner and moving a team away from a city/state that won’t put up for a new arena and another when you’re applying to own and relocate at the same time, and turning away from a city that has been throwing arena solution plans at the old team owner for years.
On the $75M rumor:
http://www.cbssports.com/nba/story/21805635/could-mayor-kjs-fight-for-kings-set-him-up-as-hunters-replacement
MikeM, I’m pretty sure the Constitution is silent on the matter of NBA relocation fees.
At the same time, though, ChefJoe, I am glad the two sides have never reached an arena agreement. Q&R was a bad deal; Cal Expo was just stupid; the parking leaseout was (and still is) a terrible idea.
Reject good plans; yeah, not so smart. What good plan was killed? By my count, exactly zero.
Until Seattle got involved with Hansen I wasn’t really concerning myself with what happens with sports subsidies in Sacramento. My interest is not to commit tax revenues (even carefully hidden subsidies) towards another Pro Sport in Seattle – we’ve got NFL, MLB, MLS, and even a new college stadium that all have various ongoing revenue streams going towards them while the Kingdome bills still aren’t paid off (because they decided to focus off paying newer stadium bills instead of the older ones). http://seattletimes.com/html/politicsnorthwest/2014511106_yes_were_still_paying_off_the.html
I understand you don’t think the Kings are a good investment by the city of Sacramento and you’d be happy to see them go elsewhere. My feeling is if some city has to draw the short straw of the NBA I’d rather it not be Seattle until we’ve got all our other pro sports stadia paid off and we’re not giving away most of the return to the public. The Mariners’ lease will be up in 2018 (and they had a lease that put them so far into the hole before the stadium was built that no profits have ever been shared with the city) and the Seahawks have a lease through about 2030, but taxes should start disappearing for the Clink in 2020.
Well, I’d rather see the Kings stay; I just think it’s a bad idea to give away the store to get them to stay. In order of preference, I have:
1) They stay;
2) They leave;
3) We give away the store to get them to stay.
Sacramento’s a better market anyway.
http://www.sacbee.com/2013/03/05/5238806/group-says-sacramento-is-a-better.html
Har.
I really am starting to accept that $75M number. I guess that’s the total amount Bennett paid to move the Sonics to OKC.
That just seems like a bribe to me. Ya know? Like the NBA is going to say no to a $525M valuation AND $75M to divide 29 ways? Sure. That’ll happen.
KJ was slow on the uptake here, and it cost him. My confidence meter is now pegged pretty hard. And this doesn’t even factor in the idea that they can put together an arena plan in 28 days. That’s just not going to happen.
MikeM
When you say that the Cal Expo deal was just stupid, are you talking about the convergence plan or the original plan that was put together by John Moag and called for an investor to clean up the fairgrounds and build an arena? Or both?
Mike M
Correction. There was a viable alternative arena plan at Cal Expo. Team KJ’s downfall started with insisting the arena be located downtown without knowing how to pay for it and then coming up with the bogus parking monetization idea. I’m sick and tired of all the repeated lies and media blackout of the only plan offered that had any chance. To refresh your memory go to http://dahliadesignstudio.com/cal_expp/index.htm. With public support this plan could have revitalized Cal Expo including an arena. No it isn’t a stupid idea.
The Convergence Plan was stupid.
Should have been clearer. Sorry.
Doug
Sounds like you are referring to the original Cal Expo plan that preceded the convergence plan. The problem with that is that it was way too expensive. No developer was going to touch that with a 10 foot pole. The recession just buried it for good.
Tonight’s development really was a huge setback. They want a vote on this by March 26. Three weeks away, they don’t even have a plan, haven’t debated anything, and they want a vote by March 26.
That could happen, I suppose, but it won’t be a very solid plan.
I think this is a disaster. I’m sure KJ can’t understand why.