The only team in town?

[SJHornet]

A bit of clarification;

If the Kings leave town, the building formerly known as ARCO will likely be demolished. The city doesn't own the building or the property it rests upon, the Maloofs family does .. which is why they have no lease with the city.

If the Maloof's relocate the team or sell it to a 3rd party that relocates it, the outstanding 75M in city bonds must be paid immediately. Once paid, the arena is no longer collateral and the Maloof family can do whatever they want with the property. Since the outdated arena would no longer be any use to them and would cost too much money to maintain without an actor tenant, they'd likely have it demolished and sell the property for future development.

In short .. no Kings, no arena.

It's been assumed that the Maloofs are going to hand over the arena as partial payment of their debt. Keeping or demolishing the arena will cost money, money they don't have or want to spend. The debate has been how much the arena is actually worth and can go towards repayment.

 

[SDHornet]

Great points made by everyone, but I agree with SJ. San Diego has been running a dilapidated and outdated sports arena for decades and plenty of acts still roll through town and that place has yet to be torn down even without a major tenant. The SD Sports Arena competes with Viejas Arena (SDSU’s venue) as well as an outdoor amphitheatre in the south county. Granted SD is almost 3 times bigger than Sac and it’s a destination city so there are reasons for acts to rent out the various spaces, however as SJ mentioned there is nothing in the Sac area that can compete with Arco’s indoor capacity.

One group of people we are forgetting to mention in all of this are the businesses that profit most from these events. Hotels, restaurants, travel companies (rental car dealers, gas stations, SMF), retail…Sac would lose a significant amount of jobs and tax revenue if Arco is demoed without a replacement facility. Arco would most likely not be able to pay for itself by ticket sales, advertisement revenue, and other sources of income available at a venue like that; but the tax revenue generated by the affiliated activities should be more than able to offset the difference.

No doubt someone will crank the numbers to determine if there is profit to be made by renting Arco. We’ll just have to wait and see what happens with the Kings. It would be interesting to know how much it would cost Sac State to rent out a Sac owned Arco on a per game basis.

 

[SJHornet]

No worries. A healthy debate. I by no means intend to give an opinion about AEG and its ethical practices. I simply mean to say as a succsesful business, they know when to get into a deal or stay away. The arena would not be a free gift. It comes with $77 mil in debt and major upkeep/renovation needs. Chunks of concrete are falling off and chairs are breaking. Roof is leaking. The city doesn't have the money to pay its own workers, let alone fix an arena that the NBA, NCAA and major entertainment acts have said are unacceptable. If the city wants to own an arena, it would be more cost effective to go into business with Sac State and build an 8,000-10,000 seat arena that can be expanded at a later time. Arco is dead.

If Arco/Sleep Train is truly dead, I think Sac and Sac State have a few options. But I think it's obituary can't be written yet. Some are far fetched, so bare with me.

A) When the city acquires the arena, it won't pay off the entire debt, and millions will be accompanying the arena. I think some of the money could be used to renovate and for upkeep. Nothing major, just enough to allow future bookings.

B) The city is given the arena and sells to a second party. The new owner renovates and improves the arena on its own dime.

C) This is where I go off on a bit of a tangent- Sac State buys the arena from the city. The arena is turned into a mixed use facility. My thinking derives from the Maple Leaf Garden model. A local university in Toronto bought the historic arena, and cut it in half. They kept the top half an arena for their sports teams and made the bottom half retail and office space. Sac could make the top or bottom bowl of the arena a smaller venue (8-10,00 seat) and use the other half as classroom and office space for a Natomas based extension center. Or it couod be used as mixed retail and office space, rented out to make extra cash. Far fetched, but an interesting possibility.

D) The arena is truly dead, and Sac and Sac State partner to build a 8-10,000 seat multi-use arena. Model it much like the Stockton Arena. Allows both to make some money from concerts and maybe a ECHL hockey team or D League team. Sac State gets an amazing venue, and both sides are happy. They can possibly make it so it can be expandable to 15-18,000 so a future NBA or NHL team can call the city home.

 

[superhornet]

IMO, the arena (whatever its name) will remain. WWE and the Globetrotters will continue to rotate through there, as will major conferences that won't do well at the Sac Convention Center. Kids shows like Disney on Ice, drag racing, and tractor pulls will also continue to use the place, bringing $$ into the city. SD is correct in citing the San Diego Sports Arena as an example. Heck, the Cow Palace in SF is decades out of date and still gets use. The thing WILL be used.

 

[Green Laser]

IMO, the arena (whatever its name) will remain. WWE and the Globetrotters will continue to rotate through there, as will major conferences that won't do well at the Sac Convention Center. Kids shows like Disney on Ice, drag racing, and tractor pulls will also continue to use the place, bringing $$ into the city. SD is correct in citing the San Diego Sports Arena as an example. Heck, the Cow Palace in SF is decades out of date and still gets use. The thing WILL be used.

Also High School CIF playoff, Nor-Cal and State Championship basketball.

 

[superhornet]

GL is correct.

 

[SJHornet]

All but gone

http://m.sacbee.com/sacramento/db_309738/contentdetail.htm?contentguid=Oxz3ewV1

 

[SJHornet]

All but gone

http://m.sacbee.com/sacramento/db_309738/contentdetail.htm?contentguid=Oxz3ewV1

 

[Hornet25]

The Kings were all but gone to Anaheim too. The Maloofs desperately wanted to move and Anaheim had committed 10's of millions to upgrade an arena to bring it to NBA standards. NBA said no for a number of reasons, and KJ's speech to the board of governors helped to influence the decision.

It's a done deal once the board of governors votes on the sale to Seattle after KJ makes his pitch for the city again. The Kings may still move and the odds are in favor of this, but the fight isn't over yet. I'm curious to see what KJ has up his sleeve.

 

[SJHornet]

The Kings were all but gone to Anaheim too. The Maloofs desperately wanted to move and Anaheim had committed 10's of millions to upgrade an arena to bring it to NBA standards. NBA said no for a number of reasons, and KJ's speech to the board of governors helped to influence the decision.

It's a done deal once the board of governors votes on the sale to Seattle after KJ makes his pitch for the city again. The Kings may still move and the odds are in favor of this, but the fight isn't over yet. I'm curious to see what KJ has up his sleeve.

If there really is a mystery buyer ready to match or come close and build an arena, I think the board sides with Sacramneto. I'm just afraid Hansen simply offers another $100 million on the spot. The Seattle arena also just recieved a set back, as a la suit has been drawn up to stop it from happening.

 

[BuckeyeHornetFan]

All but gone

http://m.sacbee.com/sacramento/db_309738/contentdetail.htm?contentguid=Oxz3ewV1

No, that's not at all true.

The sale was merely a formality that everybody had been expecting to be announced for the past 2 weeks. Now the sale must be approved by the NBA's Board of Governors in April. The thing is, Commissioner David Stern has already granted Mayor Kevin Johnson permission to present a counter offer at that same BOG's meeting.

IF Mayor KJ has a local ownership group willing to match the offer that was officially submitted today and keep the Kings in Sacramento, there's a very good chance the local ownership group is approved over the Seattle group. This thing is far from over.

Word is that there are at least 3 interested groups (that meet the NBA's requisite for ownership) willing to buy the team and keep it in Sacramento. BTW, the $525M purchase price being floated around is not correct. $525M is the total valuation of the team and the Seattle group has agreed to purchase the Maloof family's 53% share of that total valuation, along with an additional 12% from a minority owner, which totals around $341M. The $341M is what local ownership would have to match. Mayor KJ was targeting a number between $400 and $450M to match, so this is far less than that.

The point is, don't close the book on the Kings in Sacramento just yet.

 

[SJHornet]

All but gone

http://m.sacbee.com/sacramento/db_309738/contentdetail.htm?contentguid=Oxz3ewV1

No, that's not at all true.

The sale was merely a formality that everybody had been expecting to be announced for the past 2 weeks. Now the sale must be approved by the NBA's Board of Governors in April. The thing is, Commissioner David Stern has already granted Mayor Kevin Johnson permission to present a counter offer at that same BOG's meeting.

IF Mayor KJ has a local ownership group willing to match the offer that was officially submitted today and keep the Kings in Sacramento, there's a very good chance the local ownership group is approved over the Seattle group. This thing is far from over.

Word is that there are at least 3 interested groups (that meet the NBA's requisite for ownership) willing to buy the team and keep it in Sacramento. BTW, the $525M purchase price being floated around is not correct. $525M is the total valuation of the team and the Seattle group has agreed to purchase the Maloof family's 53% share of that total valuation, along with an additional 12% from a minority owner, which totals around $341M. The $341M is what local ownership would have to match. Mayor KJ was targeting a number between $400 and $450M to match, so this is far less than that.

The point is, don't close the book on the Kings in Sacramento just yet.

Is there a possibility the NBA can take over the Kings? I think the only times leagues do this is when the owner is bankrupt, but can the NBA decide the Maloofs do not have the best interest of the league in mind, and take away the team and sell it locally?

 

[BuckeyeHornetFan]

Is there a possibility the NBA can take over the Kings? I think the only times leagues do this is when the owner is bankrupt, but can the NBA decide the Maloofs do not have the best interest of the league in mind, and take away the team and sell it locally?

Yes, a "best interest of the league" clause does exist. In fact, the NBA could have ousted the Maloofs well before they decided to sell (remember, these teams are "franchised"), but, might have had to deal with an anti-trust lawsuit. They didn't want to play that card unless absolutely necessary. Regardless where the franchise ends up, I'm sure the NBA is glad to be ridding themselves of the Maloof family.

Now, in regards to the sale of the team, the NBA has the right to approve or disapprove any potential ownership group. If a local group emerges that is willing to match what the Seattle group has offered, the NBA can opt to approve that group over the group the Maloof family chose. In short, the Maloof's don't have complete authority over who the team is sold to. As long as their bottom line isn't affected, they have no leg to stand on in regards to a lawsuit against the NBA for negating the deal to the Seattle group in favor of a local group.

As a previous example, look no further than the SF Giants, who were sold to a group that intended to move the franchise to St. Petersburg, Fl in 1992. A local ownership group stepped up and matched the same deal and MLB approved the sale to the local group instead in order to keep the franchise in place.

Same logic applies here. As long as the offer can be matched AND that local group has an arena plan in place, the NBA could very well make the same decision MLB did with the Giants. According to Mayor Johnson, the downtown arena deal the city negotiated with the NBA is still on the table for any new ownership group to pick up and run with. Also, AEG has re-pledged their support of $59M to the project.

So, with all that still on the table, it's really up to Mayor Johnson to find an ownership group that wants to match the offer and agree to the downtown arena terms. If he does (many are speculating he already has a group in the fold) then our chances of keeping the team could be very good.

 

[SJHornet]

Is there a possibility the NBA can take over the Kings? I think the only times leagues do this is when the owner is bankrupt, but can the NBA decide the Maloofs do not have the best interest of the league in mind, and take away the team and sell it locally?

Yes, a "best interest of the league" clause does exist. In fact, the NBA could have ousted the Maloofs well before they decided to sell (remember, these teams are "franchised"), but, might have had to deal with an anti-trust lawsuit. They didn't want to play that card unless absolutely necessary. Regardless where the franchise ends up, I'm sure the NBA is glad to be ridding themselves of the Maloof family.

Now, in regards to the sale of the team, the NBA has the right to approve or disapprove any potential ownership group. If a local group emerges that is willing to match what the Seattle group has offered, the NBA can opt to approve that group over the group the Maloof family chose. In short, the Maloof's don't have complete authority over who the team is sold to. As long as their bottom line isn't affected, they have no leg to stand on in regards to a lawsuit against the NBA for negating the deal to the Seattle group in favor of a local group.

As a previous example, look no further than the SF Giants, who were sold to a group that intended to move the franchise to St. Petersburg, Fl in 1992. A local ownership group stepped up and matched the same deal and MLB approved the sale to the local group instead in order to keep the franchise in place.

Same logic applies here. As long as the offer can be matched AND that local group has an arena plan in place, the NBA could very well make the same decision MLB did with the Giants. According to Mayor Johnson, the downtown arena deal the city negotiated with the NBA is still on the table for any new ownership group to pick up and run with. Also, AEG has re-pledged their support of $59M to the project.

So, with all that still on the table, it's really up to Mayor Johnson to find an ownership group that wants to match the offer and agree to the downtown arena terms. If he does (many are speculating he already has a group in the fold) then our chances of keeping the team could be very good.

Well, from all accounts, KJ seems to believe he's found his group. I guess its up to the board of governors to keep Sacramento around. Unfortunately, I think they are also faced with denying Seattle, who was equally robbed of their team, and the "black eye" they will recieve from moving Sacramento will be countered by the return of the Sonics. I hope the right decisions are made.

 

[superhornet]

I've heard that the Seattle group is drumming up the star power to try to jam this down our throats. Apparently, they're planning to sign Larry Bird and Phil Jackson to their front office....

 

[superhornet]

FYI: Given that we had two threads related to the proposed Kings move to Seattle, including one in the Hornet Football Forum, I've merged them. I hope the result isn't too confusing....

 

[BuckeyeHornetFan]

Assuming a viable local ownership group comes into play, I really hope the NBA does the right thing, even if it causes some legal issues, by keeping the team in town. You don't right the Seattle wrong with another wrong.

Not only that, what kind of message does it send to other mid and small market teams? If the City of Sacramento did everything it was asked by the NBA to do AND even presented a deep pocketed, local ownership group willing to invest in the City / new Arena AND sold out every single game for 17 of 26 seasons (unmatched by anyone) and you still vote to take their team away??

How can that possibly be a good thing for the league going forward is beyond me. If they want a team in Seattle so badly, they should award them an expansion team. BTW, while what happened to Seattle and the Sonics in 2008 was terrible, keep in mind that they didn't put up half the fight or show half the support Sacramento has during this ordeal. Why the NBA would want to leave a City like Sacramento, where they are the only show in town, for a city like Seattle where a team would have to compete with the Seahawks, Mariners, UW and their MLS team is beyond me.

 

[Hornet25]

Well the first step is providing that deep pocketed buyer with an arena plan, and then it's up to the BOG to make the right decision. Put all the pressure on the NBA to do the right thing.

Not only do 2 wrongs not make a right, but in this situation, you have a city willing to put up public funds to build an arena. Other owners around the league will eventually need a new arena and would prefer for it to be publicly funded, at least in some large part. By walking out on Sacramento, you make all those other cities suspicious of going through the effort of funding an arena to keep their team. The Maloofs put the NBA in a bad spot. The only way I see the NBA getting out of this without a black eye is to keep the Kings in Sac and giving Seattle an expansion team.

 

[BuckeyeHornetFan]

Well the first step is providing that deep pocketed buyer with an arena plan, and then it's up to the BOG to make the right decision. Put all the pressure on the NBA to do the right thing.

Not only do 2 wrongs not make a right, but in this situation, you have a city willing to put up public funds to build an arena. Other owners around the league will eventually need a new arena and would prefer for it to be publicly funded, at least in some large part. By walking out on Sacramento, you make all those other cities suspicious of going through the effort of funding an arena to keep their team. The Maloofs put the NBA in a bad spot. The only way I see the NBA getting out of this without a black eye is to keep the Kings in Sac and giving Seattle an expansion team.

I wholeheartedly agree.

Assuming Mayor KJ has his ducks in a row and has found a viable team to compete with the Seattle group's offer, it will be about politics from this point on. Will the NBA's desire for the Seattle market outweigh the negative ramification of rebuffing a city that has done all that it was asked to do and has supported it's franchise like no other (until the owners began purposely destroying the franchise and the good will amongst it's fans) ?? I surely hope not.

That all said, IF the worst case scenario does happen ... do you really think it will benefit the Hornets and their programs all that much? If it does, that would be the only good thing to come from any of this. Still, I'm hoping for the best at that we get to keep our Kings AND the Hornets continue to build fan support (and better facilities) through the consistent success of winning.

 

[Hornet25]

I was always under the impression that college sports flourish under a strong alumni backing. Not sure that losing the Kings has anything to do with how much the alumni backs Sac State. I have enough room in my sports world to follow Sac State and an NBA team, and so do most. The only way that you start getting fans of Sac State beyond alumni is when they start playing on a national stage on ESPN. Either in the playoffs or if they were to move up to FBS and are part of a TV contract. Until then, it doesn't matter if the Kings are here or not. One of those catch-22 situations.