Better than a recap. The whole interview:
http://sacramento.cbslocal.com/2013...hirey-discusses-obstacles-for-new-arena-plan/
http://sacramento.cbslocal.com/2013...hirey-discusses-obstacles-for-new-arena-plan/
City council vote and latest news, rumors, etc.
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Thanks for posting the link! I am VERY impressed with John Shirey. He is a very intelligent, thoughtful, articulate, and concise speaker. I believe that he is the right person for this part of the deal. It also appears that he and the mayor are on the same page and after hearing this interview I feel more confident than ever that this will get done for the City of Sacramento. Team KJ full speed ahead!
As incredible as my recap was... I urge everyone to listen to the Shirey interview. I think it will answer a lot of questions and doubts about the legitimacy of this whole thing.
If anybody in Seattle listened to that interview, they would be very, very concerned. Here we basically have:
-An arena deal in place, no legal red tape to go through
-A legit bid in to buy the team that the NBA has promised to consider
-KJ has announced incredible corporate support (50 million!) and has pre-sold over 5,000 season tickets (some have lumped the season tix in with the 50M, but those are separate figures)
-NBA and the Kings have full support of the city council...
The only reason left to take the Kings away from Sacramento is the fact that Seattle doesn't have a team... and that's simply not a good enough reason. Sorry. Well, that, and just wanting to have a guy worth 20 billion vs two guys worth a total of 5 billion... still does not qualify as a good enough reason to move a team and eliminate a franchise. Now, maybe if our city council had staunchly refused to put any public money toward an arena while simultaneously doling out over 300M each for NFL and MLB stadiums (the NBA's two biggest competitors), and in the course of the debate a city council member scoffed that the players should pay for it (*cough* Seattle *cough*), then yeah, maybe that would be reason enough to take the team...
This is such a no brainer, I honestly don't know why there's even a debate anymore.
This isn't "game on" as was described in a recent national press article. It's game over.
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From Chris Daniels.
@ChrisDaniels5 I had a chance to talk at length w/Sacramento Asst. City Mgr John Dangberg yesterday who says city planning on prelim term sheet by NBA BOG.
@ChrisDaniels5 Dangberg said he didn't see a distinction between a Term Sheet, and an MOU, and that the document would be detailed on new #NBAKings arena
@ChrisDaniels5 Dangberg also said CEQA/EIR review would be done after project plans are in place, and yes, the review could be sped up... #NBAKings
@ChrisDaniels5 Dangberg told me CA AB900 allows for that, meaning process could take few months, rather than a yr once #NBAKings design plans are in place.
@ChrisDaniels5 Dangberg also said Downtown Mall location is a better for #NBAKings EIR process. Railyards would have had q's w/ soil contamination, traffic
@ChrisDaniels5 So, in theory, the EIR/EIS process, barring legal challenges etc, could be done in Sacramento and Seattle around same time. #NBAKings
@ChrisDaniels5 I had a chance to talk at length w/Sacramento Asst. City Mgr John Dangberg yesterday who says city planning on prelim term sheet by NBA BOG.
@ChrisDaniels5 Dangberg said he didn't see a distinction between a Term Sheet, and an MOU, and that the document would be detailed on new #NBAKings arena
@ChrisDaniels5 Dangberg also said CEQA/EIR review would be done after project plans are in place, and yes, the review could be sped up... #NBAKings
@ChrisDaniels5 Dangberg told me CA AB900 allows for that, meaning process could take few months, rather than a yr once #NBAKings design plans are in place.
@ChrisDaniels5 Dangberg also said Downtown Mall location is a better for #NBAKings EIR process. Railyards would have had q's w/ soil contamination, traffic
@ChrisDaniels5 So, in theory, the EIR/EIS process, barring legal challenges etc, could be done in Sacramento and Seattle around same time. #NBAKings
New article by Bruski, summarizing the latest developments and thoughts on the issues the BOG will be weighing during their decision. One interesting note that if the BOG knows it is going to reject the sale/move, they may offer Hansen a chance to "bow out gracefully". Probably with the recommendation that this improves his chances of getting the next available franchise whether an existing team or expansion. Let's assume that the Arena deal comes together and that the Mastrov/Burkle offer puts at least the same amount of money in the Maloof's pockets. Then, I think it's going to come down to the rights of the owners to sell to whom they wish to vs. an arena deal with a substantial public subsidy. As long as the owner gets at least the same amount of cash in their account from the transaction, I got to believe that most owners see the immense value of a recent publicly subsidized arena deal.
http://probasketballtalk.nbcsports.com/2013/03/04/future-of-nba-arena-subsidies-market-comparisons-to-decide-kings-fate/
http://probasketballtalk.nbcsports.com/2013/03/04/future-of-nba-arena-subsidies-market-comparisons-to-decide-kings-fate/
I really hope the powers that be bring up this kind of reasoning, because you really cannot run a league with owners selling to whoever they want and being able to move teams all over the place. If that was the case teams would be moving almost everyt time they are sold.
Sacramento never had a chance to put a bid in because the Maloofs are slime.
I believe the argument is not about owners being vindictive against one another, but that owners don't want other owners deciding who they sell their assets to. By setting a precedent (I know this happened once with the T-Wolves because the new ownership group wasn't approved, but it is an isolated case at this point), the fear is that in the future, the other owners may dictate who they sell to.
Which I can only see as being a hindrance if it means less money in the outgoing owner's pockets. If an owner (in this case the Maloofs) is selling a team and will get the same price from one of two buyers then (1) why would the outgoing owner care who they sell to and (2) why WOULDN'T the league want to dictate which ownership group is entering their circle?
The only possible way I could see an outgoing owner having a strong preference for one group vs another (assuming the sale price is equal) is that they might strongly prefer to sell to a group that would keep the team in town and/or competitive and clearly the Maloofs don't care about either. No, the only possible reason that they'd even care whether it was Hansen/Ballmer or Mastrov/Burkle would be out of spite and to screw over Sacramento as a city and fanbase and quite honestly the BOG should be opposed to such a thing on it's surface.
Count me among those that don't buy this particular line of reasoning or especially that it favors Seattle.
The only possible way I could see an outgoing owner having a strong preference for one group vs another (assuming the sale price is equal) is that they might strongly prefer to sell to a group that would keep the team in town and/or competitive and clearly the Maloofs don't care about either. No, the only possible reason that they'd even care whether it was Hansen/Ballmer or Mastrov/Burkle would be out of spite and to screw over Sacramento as a city and fanbase and quite honestly the BOG should be opposed to such a thing on it's surface.
Count me among those that don't buy this particular line of reasoning or especially that it favors Seattle.
I agree that the owners wouldn't want to set a precedent of being hindered in the sale process, but we should separate and distinguish a sale with no intention or need to move the team with a sale to a different owner who is intent on moving the team.
When relocation is involved where so many factors suddenly come into play that can damage the NBA, the owners will look at the present state of affairs, not at what may happen when they decide to sell to a different city.
When relocation is involved where so many factors suddenly come into play that can damage the NBA, the owners will look at the present state of affairs, not at what may happen when they decide to sell to a different city.
I may be misunderstanding this... but I don't understand why people think that the BoG would force the Clowns to sell to Mastrov/Sacramento. They already agreed to sell the team to Hansen so he can move it to Seattle. The only vote coming from the BoG is to approve or reject that sale and relocation. Not on the merits of "does Seattle deserve a team?", but on the merits of whether or not the team needs to relocate to be successful - whether or not Sacramento can support an NBA franchise (the same argument that was key when considering the relocation to Anaheim, and was also key in Seattle's relocation to OKC due to lack of city support). Remember, this is a bid to RELOCATE - not a bid to buy and stay.
KJ is making a presentation to the BoG to prove that this sale to relocate the team is absolutely unnecessary. That there is support from the fans here, that there is support from the city here, and that there are BILLIONAIRE investors here, saying they are willing to buy the team, keep it here, build an arena, and run this organization successfully. If the BoG agrees, they will reject the sale to Seattle. When that happens, it just so happens that there is a competitive offer from Sacramento in the wings. The Clowns can take that offer, or decline it. The BoG cannot force them to accept it. So it's not the BoG/owners telling an owner who to sell the team to. It's the BoG/owners evaluating a proposal to sell and relocate a team and approving or rejecting it. On the merits of the RELOCATION, not on the amounts of money involved.
They already basically turned down one relocation attempt citing strong fan support and strong city support. This time around that support still exists, PLUS an arena plan, PLUS billionaire investors ready to write a check to make it all happen, PLUS widespread knowledge of the Clown's antics and mismanagement. There is A LOT more upside to keeping the Kings here than there was when the Clowns tried to move to Anaheim. Do the math and it's pretty obvious... the Seattle sale gets rejected. What happens after is not on the table for the BoG to decide.
KJ is making a presentation to the BoG to prove that this sale to relocate the team is absolutely unnecessary. That there is support from the fans here, that there is support from the city here, and that there are BILLIONAIRE investors here, saying they are willing to buy the team, keep it here, build an arena, and run this organization successfully. If the BoG agrees, they will reject the sale to Seattle. When that happens, it just so happens that there is a competitive offer from Sacramento in the wings. The Clowns can take that offer, or decline it. The BoG cannot force them to accept it. So it's not the BoG/owners telling an owner who to sell the team to. It's the BoG/owners evaluating a proposal to sell and relocate a team and approving or rejecting it. On the merits of the RELOCATION, not on the amounts of money involved.
They already basically turned down one relocation attempt citing strong fan support and strong city support. This time around that support still exists, PLUS an arena plan, PLUS billionaire investors ready to write a check to make it all happen, PLUS widespread knowledge of the Clown's antics and mismanagement. There is A LOT more upside to keeping the Kings here than there was when the Clowns tried to move to Anaheim. Do the math and it's pretty obvious... the Seattle sale gets rejected. What happens after is not on the table for the BoG to decide.
I think Jose is correct. The Maloofs don't have to sell to Mastrov if the move/sale to Seattle is rejected. I don't understand the comments that the Maloofs are out of the picture because they have sold the team. They haven't sold the team until the BOG OKs it. Of course they would be fools to reject Mastrov but they ARE fools.
You are correct in the letter of law sense. The Maloofs would not be required to take the Sacramento offer if the Seattle offer is shut down. Yes you are right they would be fools to turn down the SAC offer. I do believe the NBA could very well force a sale to the NBA it's self, much like they did with Shinn in New Orleans.
Strictly speaking, yes, that is correct. The question I have is: With the whiff of huge amount of $$$ coming to the Maloofs from a potential sale, will mom and George forego all that green to retain this cash bleeding cow? I find that highly highly unlikely. Once they've smelled the cash, there's no turning back.
Could, or would the NBA use the money owed to the league by the Maloofs to influence the sale? Definitely a possibility me thinks. Of course they would have to reject the Seattle relocation first. But its something that could be held over the Maloofs heads. Would the league be willing to do a refinance or possibly absolve some of the loan as a way to make the Maloofs go quietly into that good night. Wishful thinking on my part perhaps!
Technically you are correct but there are ways in which Maloofs can be persuaded to sell to the Mastrov/Burkle group. NBA could invoke "in best interest of the league" clause and take over (probably unlikely). They could call in their loan (again, probably unlikely) or they could simply buy the team from Maloofs for the agreed amount and sell it to a buyer much like they did with the Hornets.
However, I do not think it comes to that. What I believe will happen is Maloofs will sell because they realised that they can no longer run the team. They are losing money on the team because they don't have any more money to invest into the team. They allegedly made a call for cash to the minority owners because they were likely to lose $7 million this season. In reality, to an NBA owner $7 million is not a lot of money but to these guys, its a lot!
The Maloofs are after an inflated price for the team and they will get that regardless of whether it comes from Hansen or Mastrov. They want that money, they need that money and at the end of the day if NBA reject the Seattle sale, I am VERY confident that Maloofs will happily sell to Mastrov because they still get their $340 million or same net worth as they would from the Hansen group.
However, I do not think it comes to that. What I believe will happen is Maloofs will sell because they realised that they can no longer run the team. They are losing money on the team because they don't have any more money to invest into the team. They allegedly made a call for cash to the minority owners because they were likely to lose $7 million this season. In reality, to an NBA owner $7 million is not a lot of money but to these guys, its a lot!
The Maloofs are after an inflated price for the team and they will get that regardless of whether it comes from Hansen or Mastrov. They want that money, they need that money and at the end of the day if NBA reject the Seattle sale, I am VERY confident that Maloofs will happily sell to Mastrov because they still get their $340 million or same net worth as they would from the Hansen group.
Huh? What presentation???
And, re: forced sale... If you listen to and believe Mr. Shirey, he said the team WILL be sold, that means that the NBA will essentially be choosing who buys it, if $ is roughly the same. There are probably reasons he could not, or did not want to go into as to why he said that, but Shirey is as straightforward as they come. He would not present false information, or information that could end up being wrong. Listen to the interview if you haven't.
I would think that has something to do with the 100 million they owe the NBA. That line of credit might have been structured so that the NBA then has them by the balls, can call it in at any time, etc. If that's true... then hell yes the NBA is in just about total control of this outcome.
Something that Carmichael Dave tweeted a few days ago has been bugging me.
"Hansen deal isn't 65% of 525. It's 525-30 mil relo-77 city loan - 140 NBA debt."
Has this been refuted? Because if it's correct, then the true team value would be $278 million, and the 65% share that is being bidded on would only be $180 million. Yet I keep seeing it reported that the team value is now $525 based on the sales agreement. Forbes even values the team at $525 now. It doesn't make sense to me how a value can be inflated to account for the debt. I mean wasn't that the basis of a lot of mortgage fraud during the real estate bubble-- home values were appraised artificially high to allow for loans that far exceeded the true value of the property. Not a perfect comparison by any stretch, but one of the main reasons the purchase price is so high is because of all the debt associated with it. How the debt is handled by any new ownership group is a huge piece of this puzzle. We know that the Mastrov/Burkle bid doesn't need to include the debt to the city of Sacramento or the relocation fee which is potentially $107 million. But I'm also wondering if each bid assumes the NBA debt or if either attempts to pay some or all of it off.
EDIT: Should have phrased that differently. It's not that the Mastrov/Burkle bid doesn't need to account for the city of Sacramento debt, they just don't need to pay it off in one lump sum up front.
EDIT #2: Chris Daniels just tweeted that the relocation fee would be about $75 million. Bottom line is CD's numbers most likely aren't correct either.
"Hansen deal isn't 65% of 525. It's 525-30 mil relo-77 city loan - 140 NBA debt."
Has this been refuted? Because if it's correct, then the true team value would be $278 million, and the 65% share that is being bidded on would only be $180 million. Yet I keep seeing it reported that the team value is now $525 based on the sales agreement. Forbes even values the team at $525 now. It doesn't make sense to me how a value can be inflated to account for the debt. I mean wasn't that the basis of a lot of mortgage fraud during the real estate bubble-- home values were appraised artificially high to allow for loans that far exceeded the true value of the property. Not a perfect comparison by any stretch, but one of the main reasons the purchase price is so high is because of all the debt associated with it. How the debt is handled by any new ownership group is a huge piece of this puzzle. We know that the Mastrov/Burkle bid doesn't need to include the debt to the city of Sacramento or the relocation fee which is potentially $107 million. But I'm also wondering if each bid assumes the NBA debt or if either attempts to pay some or all of it off.
EDIT: Should have phrased that differently. It's not that the Mastrov/Burkle bid doesn't need to account for the city of Sacramento debt, they just don't need to pay it off in one lump sum up front.
EDIT #2: Chris Daniels just tweeted that the relocation fee would be about $75 million. Bottom line is CD's numbers most likely aren't correct either.
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I'm not sure that making the NBA loan due is out of the question. The way I see it is that the Maloofs did a couple of things to seal their fate. The first is obviously entering into their "binding" agreement. You've just announced you want out of the NBA and you are parting with the franchise. The second is the $30 mil deposit. Now you've just accepted compensation for the team. If that franchise is securing the debt, the NBA is entitled to that money. May even be entitled to be paid first before the Maloofs receive proceeds from the sale. The best way to get the money is make the loan due now, before its spent. I think using the argument above more eloquently and with more lawyerese, it is justifiable. Pick 6/1/13 as a due date (completely arbitrary by me) and say give us our money. This prevents the Maloofs from having time to back out and find another buyer. Will have to use the ones presented to them to make the payment. The Maloofs would have set the wheels in motion for a loan pay back on their own. NBA really doesn't even have to look hard.
Feel free to poke holes in this theory if you see any, but it makes sense to me.
Feel free to poke holes in this theory if you see any, but it makes sense to me.
Its one thing that I am really nervous about in this whole effort. We seem to be assuming that the $525 million includes debt to the city, debt to the NBA and the relocation fee. We don't really know that and that is one key thing that could really screw us over here. All it takes is for one of those to not be included in the $525 million and the Mastrov/Burkle bid falls way short of what it should be and this whole thing goes up in smoke!
I've got to trust that KJ and Mastrov/Burkle know exactly how the $525 million figure is derived and what exactly it includes because if we they don't, we are screwed and in a big way! I trust that we know this and have acted accordingly covering all of our bases as we simply cannot afford to make an error in all this.
I've got to trust that KJ and Mastrov/Burkle know exactly how the $525 million figure is derived and what exactly it includes because if we they don't, we are screwed and in a big way! I trust that we know this and have acted accordingly covering all of our bases as we simply cannot afford to make an error in all this.
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