maloof arena options reported from espn dime mag

[jrahn]

http://sports.espn.go.com/nba/dailydime?page=dailydime-061111-12

Western Conference

It's way too soon to know what happens next for the Sacramento Kings after the latest proposed plan for a new arena was soundly rejected by voters Tuesday, bringing an unsavory end to a campaign that created unprecedented tension in town.
What we do know: There are actually three potential outcomes as opposed to two.
(1) The Maloof Brothers can start over with the city and try to strike a new arena deal, perhaps at a site closer to Arco Arena than the proposed (and defeated) move to a downtown rail yard.
(2) They can start seriously exploring their options to leave town, something the Maloofs have consistently insisted they don't want to do in spite of all their ties to Las Vegas and serious interest from Anaheim.
(3) They can explore selling the team and buying a new one, which is the newest option on the list but hardly far-fetched.
The Maloofs certainly don't want to sell the Kings after eight wildly successful seasons that transformed one of the league's perennial doormats into a model franchise and made them synonymous with the franchise. But they're also receiving criticism in town like they've never received before, after years of darling status.
Sacramento's anti-arena lobby puts the blame on the collapsed deal squarely on the Kings' owners, including accusations that the Maloofs are holding out for too much public funding and that they intentionally sabotaged the current proposal in hopes of securing a sweeter deal ... or to make it easier for them to move the club.
But such claims overlook a couple crucial facts, according to league sources.
For starters, even if the Maloofs are secretly desperate to move the Kings to Las Vegas, as has long been suspected, that can't happen until Vegas sports books stop taking NBA bets or commissioner David Stern relents on his stance that he'll never put a team there if you can wager on NBA games.
Neither is likely to happen soon, with the sports books understandably unwilling to forfeit millions in NBA revenue and Stern refusing to budge for years, even though he has consented to put February's All-Star Game in Vegas, as well as the NBA's biggest summer league and Team USA training camps.
A crucial secondary point: The NBA, sources say, is adamantly against leaving Sacramento, which ranks as one of the league's strongest markets. The Kings, with the Maloofs in charge, have become a sellout machine. On the assumption that the city will have a new arena someday, which seems a safe assumption, it's also a market with considerable growth potential.
So ...
Moving the team ain't so easy.
If the Maloofs reach the point that they want to leave town, don't be surprised if they're encouraged to sell the Kings and buy an ailing franchise, then move their new team to Anaheim ... or Vegas if one of the current obstacles has been removed. The NBA is in no rush to leave a proven market.
Of course, if it plays out that way, I'll be even less surprised if Sacramento's citizenry comes to rue the Maloofs' departure and miss them deeply. They're not popular guys at the moment, but they've been passionate and aggressive owners who've made winning and entertainment big priorities.
Owners like that aren't easy to find.

 

[nbrans]

Leave it to Marc freaking Stein of all people to write the most cogent, logical, sane article about the arena deal. He just shows how abysmal the Bee has been.

 

[6th]

I agree, nbrans. It was an excellent article and something all Sacramentans should read.

 

[JB_kings]

Ok, following the logic of selling the team, who is going to buy?
I can tell you there is one guy out there with a blank check offer right now. Henry Samueli. The same guy that tried to buy the Sonics so that he could move them to Anaheim.
If you can find a buyer willing to keep them in Sacramento, guess what - they will want a new arena.

 

[VF21]

The Maloofs are NOT going to sell.

 

[BMiller52]

http://sports.espn.go.com/nba/dailydime?page=dailydime-061111-12

Western Conference

It's way too soon to know what happens next for the Sacramento Kings after the latest proposed plan for a new arena was soundly rejected by voters Tuesday, bringing an unsavory end to a campaign that created unprecedented tension in town.
What we do know: There are actually three potential outcomes as opposed to two.
(1) The Maloof Brothers can start over with the city and try to strike a new arena deal, perhaps at a site closer to Arco Arena than the proposed (and defeated) move to a downtown rail yard.
(2) They can start seriously exploring their options to leave town, something the Maloofs have consistently insisted they don't want to do in spite of all their ties to Las Vegas and serious interest from Anaheim.
(3) They can explore selling the team and buying a new one, which is the newest option on the list but hardly far-fetched.
The Maloofs certainly don't want to sell the Kings after eight wildly successful seasons that transformed one of the league's perennial doormats into a model franchise and made them synonymous with the franchise. But they're also receiving criticism in town like they've never received before, after years of darling status.
Sacramento's anti-arena lobby puts the blame on the collapsed deal squarely on the Kings' owners, including accusations that the Maloofs are holding out for too much public funding and that they intentionally sabotaged the current proposal in hopes of securing a sweeter deal ... or to make it easier for them to move the club.
But such claims overlook a couple crucial facts, according to league sources.
For starters, even if the Maloofs are secretly desperate to move the Kings to Las Vegas, as has long been suspected, that can't happen until Vegas sports books stop taking NBA bets or commissioner David Stern relents on his stance that he'll never put a team there if you can wager on NBA games.
Neither is likely to happen soon, with the sports books understandably unwilling to forfeit millions in NBA revenue and Stern refusing to budge for years, even though he has consented to put February's All-Star Game in Vegas, as well as the NBA's biggest summer league and Team USA training camps.
A crucial secondary point: The NBA, sources say, is adamantly against leaving Sacramento, which ranks as one of the league's strongest markets. The Kings, with the Maloofs in charge, have become a sellout machine. On the assumption that the city will have a new arena someday, which seems a safe assumption, it's also a market with considerable growth potential.
So ...
Moving the team ain't so easy.
If the Maloofs reach the point that they want to leave town, don't be surprised if they're encouraged to sell the Kings and buy an ailing franchise, then move their new team to Anaheim ... or Vegas if one of the current obstacles has been removed. The NBA is in no rush to leave a proven market.
Of course, if it plays out that way, I'll be even less surprised if Sacramento's citizenry comes to rue the Maloofs' departure and miss them deeply. They're not popular guys at the moment, but they've been passionate and aggressive owners who've made winning and entertainment big priorities.
Owners like that aren't easy to find.

Sacramentans need to stop being told the part that I bolded, because honestly it's not that true. Because for it to be true, the city DOES need a new arena.

 

[VF21]

????What part isn't true?

 

[BMiller52]

That the NBA wouldn't leave Sacramento. Atleast that's the idea I thought he was saying.

 

[VF21]

Partially. He's saying the NBA is not going to allow the Kings to leave Sacramento if they think there's any kind of a chance of getting this all solved. And a good part of the reason for that is the sellout factor.

The writer actually makes his own proviso about it:

On the assumption that the city will have a new arena someday, which seems a safe assumption, it's also a market with considerable growth potential...

You have to look at the comment within the context of the entire article.

 

[voteno]

for an arena to be built

the Maloofs must open their wallet, if they want a substantial public subsidy to help build it. The remaing amount will need to come from other sources, private investors, ticket surcharges,etc.

 

[JB_kings]

the Maloofs must open their wallet, if they want a substantial public subsidy to help build it. The remaing amount will need to come from other sources, private investors, ticket surcharges,etc.

Why? If you had a choice of you paying your home mortgage or somebody else, what would you do?

 

[Circa_1985_Fan]

the Maloofs must open their wallet, if they want a substantial public subsidy to help build it. The remaing amount will need to come from other sources, private investors, ticket surcharges,etc.

so in other words...its either the Maloofs pay everything, or nothing at all...thats seems to be the attitude, no matter what, of all of the anti-arena people. NO arena deal will be done with ticket surcharges, etc., its just not lucrative enough in a market like Sacramento. So what the hell??

 

[Venom]

I'll say again that I think the politicians could squeak out a majority vote on 100% public financing if the Maloofs would just shut up and stop asking for poison pill concessions like 8000 parking spots. Anybody who has traveled the country can tell you how much more enjoyable cities w/ a burgeoning downtown are. Arenas/stadiums are almost universally the anchors of these thriving downtowns, and I think that kind of opportunity in Sacramento would eventually reach people.

But I am getting tired of hearing the crybaby Maloofs whine about how nobody likes them. Welcome to politics fellas. This is professional sports, which involves politics and public relations in today's environment. How naive are they? They make all these demands, submarine the deal repeatedly, fail to support it, and then make that ridiculous commercial. What did they expect? Either they are incredibly crafty in pursuing a strategy to move the team, or phenomally naive. If the former, forget them and we can revitalize downtown w/out them. It sucks, but I imagine we could put up a baseball stadium and peel an MLB team away. Shoot, if the A's are already moving to Fremont, why not Sacramento? If it is the latter, then why should I believe that any of their demands are valid or backed up with solid research?

 

[voteno]

the public does not owe them an arena

so in other words...its either the Maloofs pay everything, or nothing at all...thats seems to be the attitude, no matter what, of all of the anti-arena people. NO arena deal will be done with ticket surcharges, etc., its just not lucrative enough in a market like Sacramento. So what the hell??

The public does not owe the kings an arena. The public is supporting the kings by consistently selling out the Kings games over the last 20 years. The public should kich in some money but nowhere near what they are expecting. If they have to have 100% public financing for them to have a place to run their business, then it is time for them to move on. That to me is a very simple fact of life. For anyone to claim that the City owes them an arena, or that is just the way that it is done is ludicrous.

I know other cities are doing it and there are benefits to having a NBA team here. However sometimes you have to be willing to let businesses leave that are asking for too much of a hndout. And this was way to much.

Why cant the people who use the arena pay a surcharge? If I use the facility, I would expect to pay that. We are actually already paying a surcharge to pay off the curren tloand that was given to the kings. Could it be that they are already charging all they think people will pay? It seems like a logical idea to me.

 

[Kingzrool]

the Maloofs must open their wallet

Right there....That is the problem. Why can't people see that a business has to at least break even and sometimes make $$ to work and even benefit the community. Noone has a big enough wallet to fund a failing business that pays millions of $$ in salary alone. VOTENO people like the Maloofs do not get rich enough to buy basketball teams by "opening their wallet". Smart businessmen (and women ) seek out ventures that are profitable.

 

[voteno]

smart business people

Smart businessmen (and women ) seek out ventures that are profitable.

And if their venture is not profitable they expect the public to provide them with the means so they can make money.

I do not believe that the Kings lose money year after year. The NBA gives them enough money to pay most of the operating cost of the team. Combine that with the amount they get from local revenues and they have exceeded the operating costs. If there are additional costs, they should shoulder the costs.

 

[VF21]

I'll say again that I think the politicians could squeak out a majority vote on 100% public financing if the Maloofs would just shut up and stop asking for poison pill concessions like 8000 parking spots. Anybody who has traveled the country can tell you how much more enjoyable cities w/ a burgeoning downtown are. Arenas/stadiums are almost universally the anchors of these thriving downtowns, and I think that kind of opportunity in Sacramento would eventually reach people.

But I am getting tired of hearing the crybaby Maloofs whine about how nobody likes them. Welcome to politics fellas. This is professional sports, which involves politics and public relations in today's environment. How naive are they? They make all these demands, submarine the deal repeatedly, fail to support it, and then make that ridiculous commercial. What did they expect? Either they are incredibly crafty in pursuing a strategy to move the team, or phenomally naive. If the former, forget them and we can revitalize downtown w/out them. It sucks, but I imagine we could put up a baseball stadium and peel an MLB team away. Shoot, if the A's are already moving to Fremont, why not Sacramento? If it is the latter, then why should I believe that any of their demands are valid or backed up with solid research?

You need to read the transcript of the interview Grant had with Harvey Benjamin, Excecutive Counsel for the NBA. There's a lot of clarification about the parking issue - and it wasn't the Maloofs who tried to switch horses in mid-stream.

 

[VF21]

And if their venture is not profitable they expect the public to provide them with the means so they can make money.

I do not believe that the Kings lose money year after year. The NBA gives them enough money to pay most of the operating cost of the team. Combine that with the amount they get from local revenues and they have exceeded the operating costs. If there are additional costs, they should shoulder the costs.

??????

Do you have any basis in fact for ANY of this? I know you don't, so don't bother trying to create something.

But just for sake of discussion, how much do you think it costs to operate the Kings? Be sure and include all the labor and personnel costs of support people, not just the team and the coaches. Don't forget the ticket taker, the custodians, the guards, the laundry folk, the printing of tickets, and the myriad of other expenses you couldn't possibly imagine.

The information about the Kings losing money has been substantiated. In fact, the Maloofs even opened their books to the press MORE THAN ONCE, which they are not required to do.

If you're going to argue here, please bring facts and not just random thoughts.

 

[voteno]

facts

??????

Do you have any basis in fact for ANY of this? I know you don't, so don't bother trying to create something.

But just for sake of discussion, how much do you think it costs to operate the Kings? Be sure and include all the labor and personnel costs of support people, not just the team and the coaches. Don't forget the ticket taker, the custodians, the guards, the laundry folk, the printing of tickets, and the myriad of other expenses you couldn't possibly imagine.

The information about the Kings losing money has been substantiated. In fact, the Maloofs even opened their books to the press MORE THAN ONCE, which they are not required to do.

If you're going to argue here, please bring facts and not just random thoughts.

in a recent article it stated exactly how much the kings are given by the NBA and an estimate by MSE on the local broadcasting rights. It also gave the payroll for the team. When you factor these into the picture, + parking revenue you have an excess of over 30 million dollars. Do you really think that all of the other employess and costs exceed 30 million dollars. I did not include many sources of revenue that the Kings have. This is all fact. Do your research and prove me wrong. You cant. It is FACT. Now the figures that I do not have are how much the Maloofs are paid for their ownership roles. That figure could easily put the team into the red. You asked for facts. here they are

 

[6th]

There are many more costs to running the arena then salaries. I will name only a couple. Use your imagination to come up with the rest, since you seem an expert at imagination.

Let's talk about the promotional staff salaries. Oh, and do you have even a clue how much it costs to fly the team to various destinations? You know, jet fuel and the like? How about the housing costs for the entire team, coaching staff, support personnel an the like? I have only begun to think of other costs, but I have spent enough time already in having to explain the obvious......well, obvious to some.

 

[VF21]

in a recent article it stated exactly how much the kings are given by the NBA and an estimate by MSE on the local broadcasting rights. It also gave the payroll for the team. When you factor these into the picture, + parking revenue you have an excess of over 30 million dollars. Do you really think that all of the other employess and costs exceed 30 million dollars. I did not include many sources of revenue that the Kings have. This is all fact. Do your research and prove me wrong. You cant. It is FACT. Now the figures that I do not have are how much the Maloofs are paid for their ownership roles. That figure could easily put the team into the red. You asked for facts. here they are

Could you provide a link to that article, please?

And please do not present your opinions as FACT unless you can prove them. It's not up to me to prove you wrong until you detail what you're talking about.

Just one example? How much do you think Arco pays for electricity?

And one more example? Do you know the percentage of employer-incurred costs for personnel? It isn't just salary we're talking about. I believe the standard ratio is now somewhere around 60% about the initial salary cost. So, if someone is making $1,000,000 in salary, their employer also has to pay $600,000 over and above that salary for things like health insurance, unemployment insurance, etc. and my 60% estimate could actually be pretty low. That doesn't show up in salary costs but MSE still has to pay it, just like any other employer.

 

[voteno]

I dont expect that this forum wil agree with me

Most of you are die hard kings fans. I enjoy watching games when I get the chance. However I do not agree that the city owes the Kings anything. We do not owe them an arena.

The facts are simple. I am sure that there are a lot of costs that i know nothing about. I am also sure that their are revenue streams that I know nothing about as well.. When I have the time, I will look up the article that was referred to in the sacbee discussions. there was a real easy discussion to follow there for you.

The figures if I recall correctly were given by Joe Maloof himself.

 

[VF21]

Oh please - If you're talking about a discussion from the sacbee forum, don't bother.

And no one has said Sacramento owes the Maloofs an arena. Apparently you're mixing up the comments from the sacbee forum with the ongoing and pretty in-depth discussions going on here.

You keep talking about facts, but you're totally ignoring most of them.

If you want to believe that most NBA franchises make money every year, that's fine. You can also believe in the tooth fairy. I don't mean to be rude, but you're arguing that the world is flat... It's simply wrong.

Yes, we're die-hard Kings fans but that doesn't make us wrong. Would you please point out in even ONE THREAD ON THIS FORUM where one of our regular members has said the public owes the Maloofs an arena? Just one will be fine. I'll wait...

 

[Kingzrool]

promotional staff salaries...fly the team to various destinations? ...housing costs for the entire team, coaching staff, support personnel an the like?

"So, if someone is making $1,000,000 in salary, their employer also has to pay $600,000 over and above that salary for things like health insurance, unemployment insurance, etc." - VF

Marketing and promotion
Janitorial services
Retirement packages
Administrative
Scouting
Business travel
Office supplies
Phone Bill
Energy and Water Bill
Transportation
Information Technlogy - Equipment and Personnel
ETC.
They even hired a guy to help with the Arena Negotiations (for all the good it did)

When they opened their books, did it get put on the internet? Does anyone have a link to end this madness??

 

[Warhawk]

Could you provide a link to that article, please?

And please do not present your opinions as FACT unless you can prove them. It's not up to me to prove you wrong until you detail what you're talking about.

Well? We're waiting. I'd like to see this mythical "article" so I can feed it to my pet unicorn....

 

[6th]

Well? We're waiting. I'd like to see this mythical "article" so I can feed it to my pet unicorn....

Once again, 6th falls off her chair in laughter.

 

[kennadog]

This is a quote from Stanford sports economist, Noll, in the Bee today (other thread)

"The pro sports business rarely makes money," said Stanford's Noll. "That is, until you sell."

This is exactly the point I keep making. Without much cash flow, MSE cannot get a commercial loan to build an arena all by themselves.

It is pretty much a well known fact that pro sports teams don't make much money. The ones that do better at staying in the black are the very few in the very large markets. Lets see, Paul Allen provately financed rehab of the Rose Garden. The ownership went bankrupt when the franchiser didn't have enough cash flow to make the loan payments. Why did the Kings get a $70 mil loan from the city? Because they were on the verge of bankruptcy.

Altho some will likely say the Stanford economist is lying. If anybody thinks the Maloofs are getting rich off of the franchise, they apparently don't know much about pro sports.

If and when the Maloofs sell, they will make money, altho you'd have to subtract out losses over the years and luxury tax payments. The taxes on the gain would be killer too. There is another thread in here where a person more expert than I explains, that even ifthe Maloofs sold today, the net gain would not be much. Maybe I'll, try and find that thread, since some people apparently keep ignoring or not reading those things.

The Bee hired auditors to look at the MSE's books twice and the losses were clearly established. Its beev a few years now and the only way to access them would be to pay for them out of the archives. Since I read them at the time, I'm not going to pay for them.

If you don't want public financing in an arena, fine. But don't think the Maloofs can just produce an arena out of the air with no help. Somebody, somewhere, somehow is going to have to help with an arena for the franchise.

 

[voteno]

ok here is the gist of the article.

It appeared in the Sacramento Bee around the middle of September. A representative of the NBA was trying to make a point that the Maloofs didnt have a very large tv contract like some of the other teams do. I think it was Stern but i could be mistaken. I believe what he said was stated that all teams receive around 30 million from the NBA for the TV rights. Joe Maloof also said that they receive another 10 million for the local tv rights. If you calculate ticket sales alone for 45 games, using a conservative average price of 80 dollars a ticket you get another 63 million dollars. Salaries run Around 60 million. That leaves 45 million + to take care of all the costs associated with the team. there are lots and lots of other cost, I know. There are also sources of revenue that we simply do no know of or could event think that we know of. Please dont insult me and think that I dont know that their are a lot of costs that I dont know about. Of ocurse their are. There are probably just as many sources of income that they have that you dont know about. But there are many ways to show that a company is not making a profit. So what if the Maloofs opened their books to the BEE. I am sure that everything was on the up and up.

What I am saying is simple. I do not believe that they lose money year after year. There are many peope who would agree with me. There are many who disagree with me ...

 

[voteno]

nobody said they were getting rich

This is a quote from Stanford sports economist, Noll, in the Bee today (other thread)

"The pro sports business rarely makes money," said Stanford's Noll. "That is, until you sell."

This is exactly the point I keep making. Without much cash flow, MSE cannot get a commercial loan to build an arena all by themselves.

It is pretty much a well known fact that pro sports teams don't make much money. The ones that do better at staying in the black are the very few in the very large markets. Lets see, Paul Allen provately financed rehab of the Rose Garden. The ownership went bankrupt when the franchiser didn't have enough cash flow to make the loan payments. Why did the Kings get a $70 mil loan from the city? Because they were on the verge of bankruptcy.

Altho some will likely say the Stanford economist is lying. If anybody thinks the Maloofs are getting rich off of the franchise, they apparently don't know much about pro sports.

If and when the Maloofs sell, they will make money, altho you'd have to subtract out losses over the years and luxury tax payments. The taxes on the gain would be killer too. There is another thread in here where a person more expert than I explains, that even ifthe Maloofs sold today, the net gain would not be much. Maybe I'll, try and find that thread, since some people apparently keep ignoring or not reading those things.

The Bee hired auditors to look at the MSE's books twice and the losses were clearly established. Its beev a few years now and the only way to access them would be to pay for them out of the archives. Since I read them at the time, I'm not going to pay for them.

If you don't want public financing in an arena, fine. But don't think the Maloofs can just produce an arena out of the air with no help. Somebody, somewhere, somehow is going to have to help with an arena for the franchise.

Once again you are putting words in my mouth. go back and read my comments. I will make it simple for you. An arena should not paid for by 100% of public money and then leased to someone for less than what the taxes on that property would have been. I dont think I can put it into simpler language for you.

 

[Kingzrool]

...and another unicorn goes hungry...