Kings $

[Larry David]

There have been two stories brewing for at least 5 months with almost no local coverage. They might be nothing. They might be good. Who knows?

1. 10% of the Kings is reportedly up for sale.

2. There are fairly significant payment issues regarding the team condos. Lawsuits and a lien on the building. The company line is that payment disputes are not uncommon for a project of this size. This is NOT a repeat of me saying "Hey, I think the Maloofs have cashflow issues" several years ago.

But, if there is news on either it might be interesting to some of us.

 

[VF21]

I think the pertinent question would be "Whose 10% is up for sale?"

 

[KingsFanSince85]

I agree that these two things may be 'nothing' or not tied together at the very least.

BUT, both are still peculiar. I would have thought the payment issues would have been resolved already. I don't get what's going on there.

And VF21 is right. Who's 10% is for sale?

Lastly, if Vivek was having $$ issues, I wouldn't think he'd have put together an all-star bid. But who knows.

 

[Larry David]

Who’s 10%? Who is bidding? Does Vivek have the 1st right of refusal? If he doesn’t get it and the person that does goes over his 17% is there a provision that makes the biggest share the managing partner? Seems like some questions that someone in town might want to ask and report over 6 months.

Is the protracted bidding war impacting Sawyer payments? What about the glacial pace of construction at the mall?

Could be nothing. Who knows

 

[VF21]

Who’s 10%? Who is bidding? Does Vivek have the 1st right of refusal? If he doesn’t get it and the person that does goes over his 17% is there a provision that makes the biggest share the managing partner? Seems like some questions that someone in town might want to ask and report over 6 months.

Is the protracted bidding war impacting Sawyer payments? What about the glacial pace of construction at the mall?

Could be nothing. Who knows

Negotiations on sales of private stock are not required to be nor should they be subject to public scrutiny. Final terms of the sale? Sure, if there is an impact on any of the legal obligations of the owners. I know we all want to know everything that we think we should know, but that's simply not the case.

I seriously doubt BTW if Vivek is having money issues. I suspect this may be a consolidation of some of the smaller investors. I hope Shaq is one of them.

 

[whozit]

Negotiations on sales of private stock are not required to be nor should they be subject to public scrutiny. Final terms of the sale? Sure, if there is an impact on any of the legal obligations of the owners. I know we all want to know everything that we think we should know, but that's simply not the case.

I seriously doubt BTW if Vivek is having money issues. I suspect this may be a consolidation of some of the smaller investors. I hope Shaq is one of them.

Shaq being consolidated into a bigger piece or smaller?

 

[Warhawk]

Shaq being consolidated into a bigger piece or smaller?

I think she means getting Shaq out of Kings ownership.

 

[Section 101]

I think she means getting Shaq out of Kings ownership.

Shaq's ownership is just a status thing. Not like he's involved with the team. He hasn't been back since the first season.

 

[VF21]

Shaq's ownership is just a status thing. Not like he's involved with the team. He hasn't been back since the first season.

It's the principle of the thing. He's a part-owner and he still goes on TV and calls us the Queens. Any feeling other than intense dislike for him I may have temporarily harbored is long gone. I don't want his name associated with our Kings.

 

[whozit]

It's the principle of the thing. He's a part-owner and he still goes on TV and calls us the Queens. Any feeling other than intense dislike for him I may have temporarily harbored is long gone. I don't want his name associated with our Kings.

Okay. All is still alright. Given the history, he was an odd fit.

 

[One and Done]

There have been two stories brewing for at least 5 months with almost no local coverage. They might be nothing. They might be good. Who knows?

1. 10% of the Kings is reportedly up for sale.

2. There are fairly significant payment issues regarding the team condos. Lawsuits and a lien on the building. The company line is that payment disputes are not uncommon for a project of this size. This is NOT a repeat of me saying "Hey, I think the Maloofs have cashflow issues" several years ago.

But, if there is news on either it might be interesting to some of us.

As a fan, this is something definitely worth watching, as financing truly dictates what we can do as a team. Unfortunately I've found there's very little coverage of Kings ownership & financing issues (only an ESPN in-depth piece and former employees talking bad about Matina K over Twitter), but interesting to watch nonetheless especially considering past issues with the Maloofs, and honestly, Sacramento being a small market team without the base funding of bigger cities. If we start making more cash consideration and dumpster-diving moves ala the late 00s, this might be a sign that $ is tight.

Really tough to hear about the downtown Sawyer building having financing issues. Sac's downtown really needs more full-time residents to keep the neighborhood active (and support all that retail going in), but developers haven't been able to create much housing as the numbers haven't worked out. Hopefully there's no continued issues that prevent this building from filling out, as well as preventing other developments from seeing the light of day... it will be really tough for all those retail & restaurant establishments to survive long-term without some sort of sustainable neighborhood within proximity.

 

[Larry David]

Since we've last talked, the Kings sold their second round pick for cash and demanded cash in the Temple trade.

And now this https://deadspin.com/feds-investigating-former-kings-exec-for-reportedly-ste-1828721612

 

[Capt. Factorial]

Since we've last talked, the Kings sold their second round pick for cash and demanded cash in the Temple trade.

Small-market franchise acts like small-market franchise! Details at 11!

And now this https://deadspin.com/feds-investigating-former-kings-exec-for-reportedly-ste-1828721612

This is pretty remarkable. But it's not exactly related to Kings finances. There was a very bad apple, he stole millions of dollars from Golden 1 Credit Union and Kaiser, he got caught by the FBI (if I followed correctly, it was the Kings who first reported suspicious activity).

Well, good. Nail the guy to the wall. But I'm not sure it really has any relevance to the Kings, except for those who take more joy in nitpicking balance sheets than watching basketball.

 

[Larry David]

That's not quite factorial. Most likely, he stole from the Kings, not the other two. Golden 1 and Kaiser paid the money to a Kings employee, who embezzzled the funds. That's on the Kings . Until / if the Kings locate, obtain and liquidate assets to recover 13.4 million, the Kings are out the money not Kaiser or Golden 1.

I suppose the Kings could try to litigate (against their two biggest sponsors) whether it was reasonable to renegotiate advance payments with the person that negotiated the deal. But, those arguments aren't great and if the Kings are already paying lawyers regarding their debts to the contractors.

 

[Capt. Factorial]

That's not quite factorial.

Of course it's not. Factorial describes a mathematical function involving the multiplication of successive integers.

Most likely, he stole from the Kings, not the other two. Golden 1 and Kaiser paid the money to a Kings employee, who embezzzled the funds. That's on the Kings . Until / if the Kings locate, obtain and liquidate assets to recover 13.4 million, the Kings are out the money not Kaiser or Golden 1.

Read the story again. He set up a separate company and convinced G1 and Kaiser to pay into it in lieu of future advertising fees. Which of course was false, but the point is the money never went to the Kings in the first place, and the Kings never lost any current revenue, the victims just thought they were paying against future ad dollars. And the Feds have apparently seized the properties dude bought, so it would seem that G1 and Kaiser will get a lot of their losses back. But this isn't on the Kings, it's on the crook. And no, the Kings aren't out the money. It wasn't in their coffers to begin with.

 

[Larry David]

Read the story again. He set up a separate company and convinced G1 and Kaiser to pay into it in lieu of future advertising fees. Which of course was false, but the point is the money never went to the Kings in the first place, and the Kings never lost any current revenue, the victims just thought they were paying against future ad dollars. And the Feds have apparently seized the properties dude bought, so it would seem that G1 and Kaiser will get a lot of their losses back. But this isn't on the Kings, it's on the crook. And no, the Kings aren't out the money. It wasn't in their coffers to begin with.

That's most likely incorrect.

If Kaiser pays some random person in the street, that's on Kaiser.

If Kaiser pays a Kings VP in charge of these matters and the Kings VP steals the money, that probably on the Kings.

The reasonableness of sending the money controls, not whether the Kings ever obtained it.

David under the guise of being a Kings employee still in charge of the issue, set up those payments on the premise that the Kings wanted the accelerated payments and wanted them paid into that account.

I'm sure the Kings and Kaiser will jointly work to sell the house. Because Golden 1 and Kaiser cut the wires, it may be easier for them to take the lead. Whatever cannot be made up, that you assume Kaiser or Golden 1 need to or can be compelled to pay twice is at best unclear and probably a bad case.

 

[Sac.1989]

Lets see what comes of this. Wouldn't be surprised if someone is selling off given our recent valuations.

Making a pretty penny

 

[One and Done]

Since we've last talked, the Kings sold their second round pick for cash and demanded cash in the Temple trade.

And now this https://deadspin.com/feds-investigating-former-kings-exec-for-reportedly-ste-1828721612

Ugh, I hate being Negative Nostradamus (re: summer of dumpster diving & cash considerations). But as I've stated in another thread re: my complete loss of hope in this team: the culmination of these moves are all-too-familiar. But I'm a fan for life, it's a habit, I'm still here, yada yada...

Would also add - to the list of a very familiar summer - that the Kings cleaned house on their entire training department, who was one of the very few shining stars of the organization. Not a knock on the incoming team, but I wonder if this new team is cheaper?

Lots of smoke developed this summer on the business and basketball side... hope this mess flames out quickly, because it's not looking good.

 

[Larry David]

A decade ago, the Kings made a ton of moves that would be objectively strange for a well-run and well-funded team. Eventually, several of us started asking whether the team was sufficiently liquid. For years, the debate was described as unduly negative and speculative here and by much of the local sports media. In fact, the owners of the team took on a real estate project that was too big and not profitable. Until the bee and outside press broke the news, most fans here were Pollyanna about what was most likely happening.

Fast forward the Kings are in the midst of trying to reshape 4 full blocks of downtown with a mall, hotel, restaurants, condos, apartments, and other non-mall retail. It’s clearly becoming a more expensive and longer slog than advertised during the save the Kings pitch. While a lot more people live in midtown these days, the mall and restaurant projects are predicated upon folks in the burbs driving into midtown and parking in a mildly urban setting to spend significant dollars. For decades, the stores and malls that occupied the land the Kings bought struggled based upon the inability to attract those shoppers and diners long term.

Based upon the fits and starts of the Kings trying to lease and open the mall and third parties struggling to open eateries or retail on non-Kings land a few blocks from the arena, the Kings must be wondering at least WHEN their vision of 4 blocks of massive rent and hotel profits will start to turn the balance sheet black. Perhaps someday they will own 80% of a cash cow. I’m sincerely rooting for that to happen. Not for the Kings, but for the city’s sake.

Then again. Maybe , the owners of the team took on a real estate project that was too big and not profitable. They are a lot of signs they are sinching their belts hard financially. Based upon how they are acting and how hard it is redevelop and recoup profits downtown, the questions at this point are fair.

 

[One and Done]

A decade ago, the Kings made a ton of moves that would be objectively strange for a well-run and well-funded team. Eventually, several of us started asking whether the team was sufficiently liquid. For years, the debate was described as unduly negative and speculative here and by much of the local sports media. In fact, the owners of the team took on a real estate project that was too big and not profitable. Until the bee and outside press broke the news, most fans here were Pollyanna about what was most likely happening.

Fast forward the Kings are in the midst of trying to reshape 4 full blocks of downtown with a mall, hotel, restaurants, condos, apartments, and other non-mall retail. It’s clearly becoming a more expensive and longer slog than advertised during the save the Kings pitch. While a lot more people live in midtown these days, the mall and restaurant projects are predicated upon folks in the burbs driving into midtown and parking in a mildly urban setting to spend significant dollars. For decades, the stores and malls that occupied the land the Kings bought struggled based upon the inability to attract those shoppers and diners long term.

Based upon the fits and starts of the Kings trying to lease and open the mall and third parties struggling to open eateries or retail on non-Kings land a few blocks from the arena, the Kings must be wondering at least WHEN their vision of 4 blocks of massive rent and hotel profits will start to turn the balance sheet black. Perhaps someday they will own 80% of a cash cow. I’m sincerely rooting for that to happen. Not for the Kings, but for the city’s sake.

Then again. Maybe , the owners of the team took on a real estate project that was too big and not profitable. They are a lot of signs they are sinching their belts hard financially. Based upon how they are acting and how hard it is redevelop and recoup profits downtown, the questions at this point are fair.

Very succinct, and great job of recapping the proxy to this all-too-familiar summer.

Would add some other factors that may be at play to the real estate issue:

• even when planned, the retail component barely reduced the sq footage of the former Downtown Plaza, a mall that due to both neglect and lack of consumer proximity, could not maintain a survivable vacancy rate prior to the eCommerce boom
• consumer tastes have rapidly shifted to eCommerce in the past few years, making most brick & mortar business models obsolete and/or limited to essential neighborhood services (nail salon, dry cleaners, grocery), bars and restaurants
• business sustainability: perhaps the Kings can not simply survive as a franchise in Sacramento without additional revenue streams outside of the usual sponsorships, tickets sales et al and thus the retail & land ownership component was a crucial pillar in the new ownership's financial plan

I'm not sure why I care so much about this, maybe I just don't want everyone to be fooled again, and find more realistic optimism in other areas. Anyways, worth watching as the smoke builds...