after being purchased in 1998 for $156M.
http://www.forbes.com/lists/2010/32/basketball-valuations-11_Sacramento-Kings_327146.html
http://www.forbes.com/lists/2010/32/basketball-valuations-11_Sacramento-Kings_327146.html
Kings franchise worth $293M today
- Thread starter PurpleHaze
- Start date
I would be shocked if the Kings were on the market if they couldn't get 400 million + (which is less than the Warriors but more than the far earlier Bobcats expansion fee or the Seattle/OKC sale). I actually think the arena uncertainty is an asset to a potential buyer with no regional loyalty who probably could give 2 poops about abandoning Sacramento and would be free to negotiate the most favorable terms with the city of his (or her) choice. With our current payroll a new owner would basically be buying an expansion team with two budding superstars and another player with massive international marketing potential.
It seems like a lot of money, but keep two things in mind. That's the gross estimated value. You have to subtract all debts of the franchise, including the loans from the league and the city, for example. MSE and the prior owner have had to finance losses with debt to keep the franchise operating. Then there will be some amount of capital gains taxes on the increased value realized by the owners in a sale of the franchise (there are minority owners besides the Maloofs). And there may be some things I'm not even thinking of. There are some costs to actually selling the team, I'm sure, such as consultant, appraisal, legal fees, escrow costs, etc.
So its not an A minus B = C equation. More like Sales price minus debt minus sales costs minus taxes = net value realized. (very simplified, I'm sure.
So its not an A minus B = C equation. More like Sales price minus debt minus sales costs minus taxes = net value realized. (very simplified, I'm sure.
Maybe that sounds simple but it doesn't solve "the problem." The NCAA has already said it will no longer allow its basketball games to be played at the ancient arena. It's only a matter of time before NBA says the same thing. The clock is now ticking extremely fast to get a new arena deal in place or the Kings will move because they have no choice.
Not to mention that the arena is about more than just the Kings (and NCAA ball and other entertainment that won't come to Arco/PBP), its about rejuvenating an entire section of the city. I know that doesn't seem to impress anyone until it actually gets done and there are new jobs and new downtown hotspots and who knows what else will crop up and then everyone will go OMG why didn't we think of this 20 years ago.
Plus at some point Arco won't only not be suitable for events but it will be hazardous to its guests.
Plus at some point Arco won't only not be suitable for events but it will be hazardous to its guests.
if the city owns the franchise, and the city owns the arena, then "profit sharing" is pretty straightforward at that point. Currently team owners (not just the maloofs) want municipalies to pony up for arenas, but want to retain damn fat portions of any revenue jointly generated by their team and the arenas. the maloofs aren't asking for more than other teams have already gotten./.. but still, its a nice gig if you can get it.
Actually, the NBA has already said Arco is not acceptable to the league (other owners). Arco is not adequate for other events, like NCAA tournaments. Shows are stariting to pass by ARCO, as has been reported. The city's consultants determined that ARCO was approaching economic obsolescence.
Some issues for events other than basketball: ARCO is antiquated for ice-making; the backstage marshalling area is much too small; not enough loading docs; yada, yada, yada. And they can't remodel to fix those problems, as determined by the engineering reports.
These are issues that affect the bottom line. If ARCO could accomodate faster turn arounds and accomodate modern events, they could have even more events at ARCO. That would bring in some of the cash flow that makes operating the arena more viable, no matter who operates it.
I tell you this, some people may not want to put in public help to keep the Kings here. I gurantee you they do not want to operate that arena and have tons of deferred capitla improvements to pay for. It will cost the city tons of money. Not only that,but if the city keeps it the taxpayers will be liable for any operating losses and any debt they need to fix it. If ARCO is all we're left with, we won't have a venue for those events for long, not just basketball.
Some issues for events other than basketball: ARCO is antiquated for ice-making; the backstage marshalling area is much too small; not enough loading docs; yada, yada, yada. And they can't remodel to fix those problems, as determined by the engineering reports.
These are issues that affect the bottom line. If ARCO could accomodate faster turn arounds and accomodate modern events, they could have even more events at ARCO. That would bring in some of the cash flow that makes operating the arena more viable, no matter who operates it.
I tell you this, some people may not want to put in public help to keep the Kings here. I gurantee you they do not want to operate that arena and have tons of deferred capitla improvements to pay for. It will cost the city tons of money. Not only that,but if the city keeps it the taxpayers will be liable for any operating losses and any debt they need to fix it. If ARCO is all we're left with, we won't have a venue for those events for long, not just basketball.
Owners of NBA basketball teams make their main money when they sell. The Kings have had red ink for any nuimber of years, including last year (borrowed from the league). The prior owners had to borrow from the city and still had to sell, because the team was bleeding red ink right and left.
I'll guarantee you the citizen's won't want to cover operating losses. And it won't produce much cash flow if you are slowly losing other events due to the inadequacies of the arena.
Not to mention, the city would have to buy the team, they'd have to negotiate a sales price for the land and improvements (all structures, parking landscaping, signs, etc.) with the owners of the team and arena and they would have to inverst millions into deferred maintenance, which would be a waste of money, when you can't actually fix the economic obsolescence issues.
Honestly, just build a damn new arena. Its the cheapest way to go, unless the city doesn't want any arena or the all the other events that couldn't come here anymore. Think there might be something like 5 other events for every Kings game.
The head of the Sacramento Tourist and Convention Bureau (Convention Center operators) said, at the City Council meeting, he gets calls all the time from big convention planners who pass up Sacramento, but have said they'd come if an arena was downtown and could accomodate their space needs. They don't want to go to Arco. So we are losing all that business right now.
I'll guarantee you the citizen's won't want to cover operating losses. And it won't produce much cash flow if you are slowly losing other events due to the inadequacies of the arena.
Not to mention, the city would have to buy the team, they'd have to negotiate a sales price for the land and improvements (all structures, parking landscaping, signs, etc.) with the owners of the team and arena and they would have to inverst millions into deferred maintenance, which would be a waste of money, when you can't actually fix the economic obsolescence issues.
Honestly, just build a damn new arena. Its the cheapest way to go, unless the city doesn't want any arena or the all the other events that couldn't come here anymore. Think there might be something like 5 other events for every Kings game.
The head of the Sacramento Tourist and Convention Bureau (Convention Center operators) said, at the City Council meeting, he gets calls all the time from big convention planners who pass up Sacramento, but have said they'd come if an arena was downtown and could accomodate their space needs. They don't want to go to Arco. So we are losing all that business right now.
Sacramento is absolutely buzzing about tonight's game on Facebook, Twitter, and on here.
We're watching our team grow together in baby steps but this was a HUGE step. The future is bright.
Can you imagine what it will be like in a year or two when our Kings are a young up and coming playoff team with a new downtown arena?
Please don't burst my bubble. I want to remain positive in all this. I just wish our Kings played this good when I went to LA last month.
As a quick side note, I still have 2 more private suite tickets to the Kings vs Spurs (2-4) game and the next day we get to play basketball on the ARCO Arena floor before it's renamed.
We're watching our team grow together in baby steps but this was a HUGE step. The future is bright.
Can you imagine what it will be like in a year or two when our Kings are a young up and coming playoff team with a new downtown arena?
Please don't burst my bubble. I want to remain positive in all this. I just wish our Kings played this good when I went to LA last month.
As a quick side note, I still have 2 more private suite tickets to the Kings vs Spurs (2-4) game and the next day we get to play basketball on the ARCO Arena floor before it's renamed.