Seattle rumors/comments - post them here!

[Capt. Factorial]

There is another little tidbit hiding in the current breakdown of Kings ownership that might come into play. According to our research, the Maloofs own 43 percent of the Kings and another 10-percent is controlled by their friend Bob Hernreich. They have a 53-percent voting block, which is strong enough to block any attempt by minority owners to seize control.

But the minority owners that make up the other 47 percent are locals, some of which have owned a stake in the club since the beginning. So does Kevin Johnson need to come up with $500 million or more to match/beat the Seattle offer? Or can the majority interest in the Kings be bought by itself?

The team carries a ton of debt. $77 million is still owed to bond holders for the 1997 loan that saved the Kings from leaving for Nashville. There are also loans with the NBA that have to be accounted for and the numbers on them vary from between $100 million and $150 million. So the Maloofs take of this prize really isn’t $500 million. It is 43-percent of the remaining money once the bills have been paid.

That makes the figure to purchase the Maloofs portion of the Kings somewhere between $117-$139 million upfront and another $75-$100 million in long-term, but low-interest debt. Add in another $50 million for Hernreich’s portion or even less for Bob Cook’s 7 percent sitting in bankruptcy and you own yourself controlling interest in the Sacramento Kings. Now I don’t have that kind of cash hiding under my pillow, but for a billionaire trying to get into the high-stakes game of the NBA, it’s not a huge pull.

Per Article at:

http://www.cowbellkingdom.com/2013/...ings-relocation-rumors-weve-been-here-before/

Maybe my figures were not so far off at all?

So maybe the right path is to cut out the "Poisoned owners" and get back to business!!!

I don't think so. The sale of the franchise is the sale of controlling interest (their 43% + Hernreich's 10%) and that sells in a block. The value of the minority shares is minimal, the only thing that's worth anything is the controlling block of shares. So rather than 43% of the post-debt take, they get 43/53rds (81%) of the post-debt take, or however they split it up with Hernreich.

At any rate, the analysis from CowbellKingdom is bizarre.

Here's the way I see it. We should look at this in terms of total cost to purchase the franchise, and let's say for sake of argument that the Maloofs want to clear $300M (before paying off Hernreich).

The costs for Hansen are: $300M (Maloofs) + ~$150M (NBA debt) + $77M (pay off Sac loan) + ~$30M (relocation fee) + ~$300M (arena construction). Total "sale": ~$527M, Total cost: ~$857M

The costs for a local group are: $300M (Maloofs) + ~$150M (NBA debt) + $70M (arena construction). Total "sale": ~$450M, Total cost: ~$520M, NOT including re-finance of city loan, but that can presumably be paid off over time whereas Hansen/Maloof would have to pay it off up front.

Feel free to adjust up and down accordingly depending on how much the Maloofs are willing to walk away with.

 

[pdxKingsFan]

Yeah, I don't really grok that, either. I don't hate LA because of a Kings/Lakers rivalry, I hate LA because it's major metropolitan area, and I hate all major metropolitan areas. That's not exclusive to LA, or even California: I hate every city on the globe that has more than five million people in it. Spread out, you ****ers!

I like living in mid-sized cities, that's why the Portland side of the Cascadia (what we call the POR-SEA-VAN) rivalry is right at home to me. I've always lived in or supported the second city/region, (Sac/Boston/Portland) which usually feels the rivalry a little larger than the bigger city. I would say the intensity of the NBA rivalry was quite a few steps down from how it is in soccer, which is the Red Sox/Yankees equivalent rivalry in American Soccer. But both teams sucked eggs when I began living here.

Anyhow, the important thing, is I will never root for a team from Seattle.

 

[xrzn]

Is anyone else surprised by the lack of national media coverage on this, specifically by ESPN? I know there isn't much to comment on, but all I have seen on ESPN was on the bottom news ticker saying Maloofs are close to closing a deal for $500 million to Hansen which will move the team to Seattle. Non of the talk shows that I have seen have said anything about it, whether it be positive or negative about it.

 

[Section 101]

Is anyone else surprised by the lack of national media coverage on this, specifically by ESPN? I know there isn't much to comment on, but all I have seen on ESPN was on the bottom news ticker saying Maloofs are close to closing a deal for $500 million to Hansen which will move the team to Seattle. Non of the talk shows that I have seen have said anything about it, whether it be positive or negative about it.

You mean ESPN is being responsible and not repeating tweets from random people?

 

[JB_kings]

ESPN as a sports news provider is irrelevant. The world changed and nobody has time to sit down and watch sports news.

And the latest is that Joe and Gavin are against the sale unless they have a say so in running the team. Just owning 2% minority share is not enough. They want control. Looks like George needs some votes from his brothers to get the deal done.

 

[pdxKingsFan]

I was at dinner last night and they had NBA tv on and they seemed to be discussing it quite a bit from what I saw on screen. That kind of bummed me out because I wouldn't think NBA TV would report if it didn't have real teeth.

 

[fansinceday1]

JHC, its a maloof lovefest on grants show today. Have these fans forgotten the utter BS the maloofs have been spewing for the past year.

 

[macadocious]

Gavin is a great guy.
Joe is a decent guy.
George is a giant pile of ****.

I have no opinion of Phil, Adrianne or Mama.

Gavin loves this town and were it up to soley him, he would stay her as owner and bring them back to glory. I think Joe is on the fence and will follow which ever way is more persuasive, unfortunately right now that is George. George has been driving this bus since he flopped on the Palms and sold the distributorship. He took away Gavin and Joes checkbook. And probably a little of their pride and manhood.

 

[bajaden]

I don't think so. The sale of the franchise is the sale of controlling interest (their 43% + Hernreich's 10%) and that sells in a block. The value of the minority shares is minimal, the only thing that's worth anything is the controlling block of shares. So rather than 43% of the post-debt take, they get 43/53rds (81%) of the post-debt take, or however they split it up with Hernreich.

At any rate, the analysis from CowbellKingdom is bizarre.

Here's the way I see it. We should look at this in terms of total cost to purchase the franchise, and let's say for sake of argument that the Maloofs want to clear $300M (before paying off Hernreich).

The costs for Hansen are: $300M (Maloofs) + ~$150M (NBA debt) + $77M (pay off Sac loan) + ~$30M (relocation fee) + ~$300M (arena construction). Total "sale": ~$527M, Total cost: ~$857M

The costs for a local group are: $300M (Maloofs) + ~$150M (NBA debt) + $70M (arena construction). Total "sale": ~$450M, Total cost: ~$520M, NOT including re-finance of city loan, but that can presumably be paid off over time whereas Hansen/Maloof would have to pay it off up front.

Feel free to adjust up and down accordingly depending on how much the Maloofs are willing to walk away with.

Here's my question. What if someone offered Bob Hernreich who owns 10% and votes with the Maloofs, $50 mill for his 10%, or whatever it would take. If that 10% was purchased, then whoever bought it, along with the other 47% owners would have the controling votes. Or, if you know what the Maloofs were going to walk away with, after all the smoke clears, you offer them a little more than that amount for the 43% that they own.

 

[upinsmoke]

Here's my question. What if someone offered Bob Hernreich who owns 10% and votes with the Maloofs, $50 mill for his 10%, or whatever it would take. If that 10% was purchased, then whoever bought it, along with the other 47% owners would have the controling votes. Or, if you know what the Maloofs were going to walk away with, after all the smoke clears, you offer them a little more than that amount for the 43% that they own.

That is one hell of a angle right there, well worth it if KJ is sure Stern has our backs. Test Herneich's royalty by the dollar.

 

[VF21]

Yeah, I don't really grok that, either. I don't hate LA because of a Kings/Lakers rivalry, I hate LA because it's major metropolitan area, and I hate all major metropolitan areas. That's not exclusive to LA, or even California: I hate every city on the globe that has more than five million people in it. Spread out, you ****ers!

The North-South thing in California is basically a rural vs. urban thing, complicated by the political differences, etc. Plus, LA steals Northern California's water to fill their freaking swimming pools.

 

[Jkbiker]

I don't think so. The sale of the franchise is the sale of controlling interest (their 43% + Hernreich's 10%) and that sells in a block. The value of the minority shares is minimal, the only thing that's worth anything is the controlling block of shares. So rather than 43% of the post-debt take, they get 43/53rds (81%) of the post-debt take, or however they split it up with Hernreich.

At any rate, the analysis from CowbellKingdom is bizarre.

Here's the way I see it. We should look at this in terms of total cost to purchase the franchise, and let's say for sake of argument that the Maloofs want to clear $300M (before paying off Hernreich).

The costs for Hansen are: $300M (Maloofs) + ~$150M (NBA debt) + $77M (pay off Sac loan) + ~$30M (relocation fee) + ~$300M (arena construction). Total "sale": ~$527M, Total cost: ~$857M

The costs for a local group are: $300M (Maloofs) + ~$150M (NBA debt) + $70M (arena construction). Total "sale": ~$450M, Total cost: ~$520M, NOT including re-finance of city loan, but that can presumably be paid off over time whereas Hansen/Maloof would have to pay it off up front.

Feel free to adjust up and down accordingly depending on how much the Maloofs are willing to walk away with.

Well than I really pity the poor minority interest owners in this situation, you are basically saying the minority owners have no rights to enjoy the appreciation of the franchise or any share of the profits? I cant imagine a partnership that would be written in such a way that minority owners could never get a return on their investment upon sale of the team?

I would imagined they welcomed the maloofs originally when they bought the majority ownership percentage, and I would imagine they would have to vote foraccepting the new controlling owners knowing they would be making all the management decisions and run the team, but to give up the right to get their money back upon sale of the whole team? It doesnt make sense.

If the minority owners wanted to stay on with the team (like on a sale to a new local investor) If they approved of the sale of the maloofs interest then I believe they could allow a sale of just the 43% or 53% to a new majority owner, but the other 47% owners still would have an investment worth 47% of the team value (before the TEAM debts)

 

[Capt. Factorial]

Here's my question. What if someone offered Bob Hernreich who owns 10% and votes with the Maloofs, $50 mill for his 10%, or whatever it would take. If that 10% was purchased, then whoever bought it, along with the other 47% owners would have the controling votes. Or, if you know what the Maloofs were going to walk away with, after all the smoke clears, you offer them a little more than that amount for the 43% that they own.

I doubt Hernreich has the legal ability to sell his shares without the Maloofs' permission. There's probably some sort of condition that he has to sell them back to the Maloofs first or something.

 

[Jkbiker]

I guess what I am trying to say is having a majority voting rights (maloofs 43% and Heinrich's 10%) gives you control of the team to run the team , make the decisions, maybe even be able to choose where a team goes, if the maloofs want to move the team, but it does not mean the maloofs OWN 100% of the team and would get all the proceeds from a sale of the Team/Franchise and leave the minority owners out of getting any money on a sale? If the entire partnership agrees to let a new owner take over and they want to be 47% owners with Seattle grp in charge, they could do so. Would Hanson really spent 500 mil not to own the entire team? Wow that means the team is worth a billion dollars? I just dont get it.

 

[Elektrik]

Here's my question. What if someone offered Bob Hernreich who owns 10% and votes with the Maloofs, $50 mill for his 10%, or whatever it would take. If that 10% was purchased, then whoever bought it, along with the other 47% owners would have the controling votes. Or, if you know what the Maloofs were going to walk away with, after all the smoke clears, you offer them a little more than that amount for the 43% that they own.

Wow! Never thought of that. I love it!

 

[jdbraver]

Wow! Never thought of that. I love it!

Majority owners would get the first chance to buy.

 

[JB_kings]

I doubt Hernreich has the legal ability to sell his shares without the Maloofs' permission. There's probably some sort of condition that he has to sell them back to the Maloofs first or something.

This...

 

[KingsFanSince85]

I doubt Hernreich has the legal ability to sell his shares without the Maloofs' permission. There's probably some sort of condition that he has to sell them back to the Maloofs first or something.

Majority owners would get the first chance to buy.

BUT ... do the Maloofs have the money and the means to make a purchase like that at this time? As much debt as they have incurred, could they even manage a loan for it? Is there anybody out there that would even be willing to help them at this point??

They may be so strung out financially that they wouldn't be able to take advantage of the first opportunity to buy.

 

[VF21]

BUT ... do the Maloofs have the money and the means to make a purchase like that at this time? As much debt as they have incurred, could they even manage a loan for it? Is there anybody out there that would even be willing to help them at this point??

They may be so strung out financially that they wouldn't be able to take advantage of the first opportunity to buy.

You're assuming Hernreich is amenable to selling his shares. I'm not sure there's any basis for that assumption.

 

[Capt. Factorial]

I guess what I am trying to say is having a majority voting rights (maloofs 43% and Heinrich's 10%) gives you control of the team to run the team , make the decisions, maybe even be able to choose where a team goes, if the maloofs want to move the team, but it does not mean the maloofs OWN 100% of the team and would get all the proceeds from a sale of the Team/Franchise and leave the minority owners out of getting any money on a sale?

There's no indication that Hansen intends to buy the minority owners' shares. He doesn't have to. Whatever number is reported is almost certainly for the 53% majority. The other 47% probably remains where it is.

 

[kennadog]

There's no indication that Hansen intends to buy the minority owners' shares. He doesn't have to. Whatever number is reported is almost certainly for the 53% majority. The other 47% probably remains where it is.

Really hard to imagine paying $500 million for 53%.

 

[Flopi]

@aaronbruski :

Sources close to the situation have maintained that Kings to SEA reports were/are premature.

@JeffZillgitt :

Stern on Kings/Seattle: “This will be decided by a committee of owners & NBA’s board of govenors w/the advice of me but not leading the way"

David Stern said it was fair point from Kings fans who want Ron Burkle to have a shot at matching any offer in effort to keep team in SAC.

 

[Dudeman23]

Really hard to imagine paying $500 million for 53%.

no one in their right mind would pay 500 mil for only 53 percent of a franchise

 

[Bricklayer]

@aaronbruski :


@JeffZillgitt :

This is actually kind of a big statement for Sacto:

David Stern said it was fair point from Kings fans who want Ron Burkle to have a shot at matching any offer in effort to keep team in SAC.

 

[Ryan]

This is actually kind of a big statement for Sacto:

I nearly spit out my pretentious $6.00 Abbot Kinney cup of joe when I read that this morning.

Can Stern force the Maloofs to either stay or sell to a buyer in Sac, as long as there is a reasonable offer?

 

[jdbraver]

I nearly spit out my pretentious $6.00 Abbot Kinney cup of joe when I read that this morning.

Can Stern force the Maloofs to either stay or sell to a buyer in Sac, as long as there is a reasonable offer?

Bmay tweets done deal w sea

 

[GoSACtown]

From Matt Steinmetz

I've heard from reliable source that the Kings' sale to Hansen-Ballmer in Seattle is done deal. Source said price
of the sale is $525 million. The source said further that the Maloofs will have no stake or decision-making with Seattle team and are out.

http://sulia.com/mattsteinmetz/

 

[sidney]

Bmay tweets done deal w sea

Post a link with things like this please

 

[Hoovtrain]

From Matt Steinmetz

I've heard from reliable source that the Kings' sale to Hansen-Ballmer in Seattle is done deal. Source said price
of the sale is $525 million. The source said further that the Maloofs will have no stake or decision-making with Seattle team and are out.

http://sulia.com/mattsteinmetz/

How can it be a done deal if Stern just said that this will be decided by BOG?

 

[Dime Dropper]

How can it be a done deal if Stern just said that this will be decided by BOG?

I'm not sure if the BOG has any say in the actual sale of the team, but they have to approve the application for relocation. Although chances of them rejecting it are slim, I would think.