City council vote and latest news, rumors, etc.

[Section 101]

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.

Nobody knows except the people that have seen the contract. It has been rumor since it came out that the number was inflated by including the debt/relo. So the Maloofs would be paying off the debt instead of Hansen buying for say $350 mil and then paying off the debt/relo. This was done to scare off any other potential suitors.

 

[Section 101]

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'd bet that Burkle/Mastrov have seen or know the number the Maloofs are receiving and made their bid accordingly.

 

[Glenn]

I'd bet that Burkle/Mastrov have seen or know the number the Maloofs are receiving and made their bid accordingly.

Backing up Section 101, no matter what the Hansen/Ballmer offer is, be assured that KJ, Mastrov, Burkle, did not come up short on their bid. KJ would not allow it and Burkle is a major league business man. People keep forgetting that Burkle sat down with Stern for a couple hours and I'm sure the topic of what would be a good bid came up. It isn't a bidding war although the Maloofs would love that. It's who has the best package which may have Burkle at the top of the package and those on this forum at the bottom of the package. It is a multi-faceted issue and we win if the BOG takes all the issues into account. Unfortunately there is no guarantee of what the BOG will do.

 

[whozit]

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.

I think you are getting the equity and team value mixed up. If you bought a home today for 250,000 and owed 200,000 on it, the home value isn't 50,000 it's still 250,000. The numbers CD was using showed that the Maloofs could end up with the same or more with a offer locally that was "officially" less.

 

[ParniValjak]

Backing up Section 101, no matter what the Hansen/Ballmer offer is, be assured that KJ, Mastrov, Burkle, did not come up short on their bid. KJ would not allow it and Burkle is a major league business man. People keep forgetting that Burkle sat down with Stern for a couple hours and I'm sure the topic of what would be a good bid came up. It isn't a bidding war although the Maloofs would love that. It's who has the best package which may have Burkle at the top of the package and those on this forum at the bottom of the package. It is a multi-faceted issue and we win if the BOG takes all the issues into account. Unfortunately there is no guarantee of what the BOG will do.

This most likely is the case because it just seems as an obvious weakness in our offer otherwise which I am sure has been addressed by KJ and Burkle and Mastrov.

Isn't Stern also acting in the "advisory role" to the committee which should swing things our way I would have thought!

 

[Glenn]

This most likely is the case because it just seems as an obvious weakness in our offer otherwise which I am sure has been addressed by KJ and Burkle and Mastrov.

Isn't Stern also acting in the "advisory role" to the committee which should swing things our way I would have thought!

I am sure that Stern and Clay Bennett's committee pretty much will make up the minds of the rest of the BoG except for one vote from Sacramento. In a sense, that's their job.

 

[Mike0476]

3/6 THIS DAY IN HISTORY: Historical Sacramento Arena Vote of 7-2 - Read about it at http://www.crowndowntown.org

 

[lwc]

There are only two things that worry me about this pending vote:
1. "Righting a wrong" - The Sonics were taken from Seattle. Righting that wrong would be putting them back.
(However, as mama taught me, two wrongs don't make a right.)
2. Clay Bennett using influence to help Seattle "get over" him. In Seattle, I'm sure that Clay Bennett is the face of evil. If he were to get a team back to Seattle, it would certainly help reshape his image, somewhat.
(However, as much as I love the Kings, they are not KD, Westbrook & the Thunder. Seattle will always grieve over that, especially if they get a title.)

With points 1 and 2 in mind, and with the pendulum of public sympathy swung over to Sacramento's side, I can't see this going against Sacramento.

For me, I know without a shadow of a doubt that the Maloofs are gone, so I am happy. However, if the team moves to Seattle, my Kings are defunct, so I am sad. If the Kings stay, they get a new arena AND new non-broke owners. My emotions and heart are so beat up. I cannot imagine how you California natives feel. This could turn out to be wonderful and turn the Kings and Sleep Train Arena (I still call it Arco Arena, I can't help it) into a hot place to watch a game and a hot team to watch. I said months and months ago that this team is only another solid role player, good coach and stability away from the playoffs. I believe they can get it in 1-2 seasons, WITH proper ownership.

 

[Chupacabra]

There are only two things that worry me about this pending vote:
1. "Righting a wrong" - The Sonics were taken from Seattle. Righting that wrong would be putting them back.
(However, as mama taught me, two wrongs don't make a right.)
2. Clay Bennett using influence to help Seattle "get over" him. In Seattle, I'm sure that Clay Bennett is the face of evil. If he were to get a team back to Seattle, it would certainly help reshape his image, somewhat.
(However, as much as I love the Kings, they are not KD, Westbrook & the Thunder. Seattle will always grieve over that, especially if they get a title.)

With points 1 and 2 in mind, and with the pendulum of public sympathy swung over to Sacramento's side, I can't see this going against Sacramento.

For me, I know without a shadow of a doubt that the Maloofs are gone, so I am happy. However, if the team moves to Seattle, my Kings are defunct, so I am sad. If the Kings stay, they get a new arena AND new non-broke owners. My emotions and heart are so beat up. I cannot imagine how you California natives feel. This could turn out to be wonderful and turn the Kings and Sleep Train Arena (I still call it Arco Arena, I can't help it) into a hot place to watch a game and a hot team to watch. I said months and months ago that this team is only another solid role player, good coach and stability away from the playoffs. I believe they can get it in 1-2 seasons, WITH proper ownership.

I would rather allow the Maloofs to remain eternal owners as long as the Kings stay in Sacramento then have the Maloofs leave the franchise at the expense of the team leaving Sacramento.

 

[Section 101]

There are only two things that worry me about this pending vote:
1. "Righting a wrong" - The Sonics were taken from Seattle. Righting that wrong would be putting them back.
(However, as mama taught me, two wrongs don't make a right.)
2. Clay Bennett using influence to help Seattle "get over" him. In Seattle, I'm sure that Clay Bennett is the face of evil. If he were to get a team back to Seattle, it would certainly help reshape his image, somewhat.
(However, as much as I love the Kings, they are not KD, Westbrook & the Thunder. Seattle will always grieve over that, especially if they get a title.)

With points 1 and 2 in mind, and with the pendulum of public sympathy swung over to Sacramento's side, I can't see this going against Sacramento.

For me, I know without a shadow of a doubt that the Maloofs are gone, so I am happy. However, if the team moves to Seattle, my Kings are defunct, so I am sad. If the Kings stay, they get a new arena AND new non-broke owners. My emotions and heart are so beat up. I cannot imagine how you California natives feel. This could turn out to be wonderful and turn the Kings and Sleep Train Arena (I still call it Arco Arena, I can't help it) into a hot place to watch a game and a hot team to watch. I said months and months ago that this team is only another solid role player, good coach and stability away from the playoffs. I believe they can get it in 1-2 seasons, WITH proper ownership.

Did you watch Sterns presser All Star weekend?

He views what Seattle did to the NBA as being wrong and Seattle is trying to re-write the history making the league look bad.

 

[Mojo]

Any truth to the Seattle media saying the Mastrov offer is extremely low?

 

[funkykingston]

Any truth to the Seattle media saying the Mastrov offer is extremely low?

I don't think anyone knows. And quite honestly "extremely low" doesn't even really mean anything without context which makes it all the more difficult to decipher since (to my knowledge) the actual details of the Hansen/Ballmer offer have not been clearly detailed.

Does their $525 million valuation include the money owed on Sleep Train Arena? Does it include the relocation fee (seems odd to me but some have suggested it does) as well? Is it taking into account the debt owed on the franchise and if so, how much debt is that exactly?

To me, here's all that really matters - would the Maloofs be getting the same amount of money from either offer? If so, then the actual team valuation is important but not vital. On the other hand, if the Mastrov/Burkle offer were to leave the Maloofs millions (not to mention tens of millions) of dollars short of the Hansen/Ballmer agreement then I think that could severely cripple or kill Sacramento's chances of hanging on to the Kings.

The bottom line is that any numbers thrown out regarding the sale of the Kings are far from black and white and involve a lot more nuance than the vast majority of the media are willing to navigate.

 

[sdballer]

Any truth to the Seattle media saying the Mastrov offer is extremely low?

Any links to this? I haven't seen anything but speculation built off of wojo's initial article that it may be slightly lower. Have you seen something new today?

 

[Jose]

Any truth to the Seattle media saying the Mastrov offer is extremely low?

People everywhere are fixated on the SALE, that they forget the important aspect of this deal - RELOCATION. This is not about selling a team, it's about RELOCATING it.

If Hansen was to make a deal to buy the Lakers for $10 Billion just to move them to Seattle, would the league approve? No. Even though that's a ridiculous amount of money that the owners would never be able to get for the team otherwise. LA is a great market and the Lakers have a lot of history. Lots of fan support and city support. It is a viable market, so there's no reason to move a team out of there. Granted, the Kings are not the Lakers and Sacramento is not LA. But the same applies - great market, team with lots of history, fan and city support. It is a viable market, so there's no reason to move a team out of here. Even if someone is willing to overpay to "steal" the team. Team "stealing" is not allowed in the NBA. Every franchise that has moved has done so because of a lack of support (fan or city) that makes it a non-viable market.

The terms of Mastrov's offer are irrelevant to the decision to RELOCATE the team. If (when) the RELOCATION to Seattle gets rejected, the Maloofs will probably be told by the BoG to look for local investors if they want to sell. And, hey, there's a local offer from a local investor. Go negotiate...

 

[JB_kings]

Backing up Section 101, no matter what the Hansen/Ballmer offer is, be assured that KJ, Mastrov, Burkle, did not come up short on their bid. KJ would not allow it and Burkle is a major league business man. People keep forgetting that Burkle sat down with Stern for a couple hours and I'm sure the topic of what would be a good bid came up. It isn't a bidding war although the Maloofs would love that. It's who has the best package which may have Burkle at the top of the package and those on this forum at the bottom of the package. It is a multi-faceted issue and we win if the BOG takes all the issues into account. Unfortunately there is no guarantee of what the BOG will do.

Just assume as the second bidder to enter the process, they had the advantage of knowing enough of the first bid make it a competitive offer. I think we have to assume because the people involved in this have top notch resources at their disposal. None of which are media members and twitter warriors.

 

[JB_kings]

People everywhere are fixated on the SALE, that they forget the important aspect of this deal - RELOCATION. This is not about selling a team, it's about RELOCATING it.

If Hansen was to make a deal to buy the Lakers for $10 Billion just to move them to Seattle, would the league approve? No. Even though that's a ridiculous amount of money that the owners would never be able to get for the team otherwise. LA is a great market and the Lakers have a lot of history. Lots of fan support and city support. It is a viable market, so there's no reason to move a team out of there. Granted, the Kings are not the Lakers and Sacramento is not LA. But the same applies - great market, team with lots of history, fan and city support. It is a viable market, so there's no reason to move a team out of here. Even if someone is willing to overpay to "steal" the team. Team "stealing" is not allowed in the NBA. Every franchise that has moved has done so because of a lack of support (fan or city) that makes it a non-viable market.

The terms of Mastrov's offer are irrelevant to the decision to RELOCATE the team. If (when) the RELOCATION to Seattle gets rejected, the Maloofs will probably be told by the BoG to look for local investors if they want to sell. And, hey, there's a local offer from a local investor. Go negotiate...

I think they will be locked in to selling no matter what. That is the whole purpose of accepting backup offers to Hansen. I think the only question is whether there will be one or two local offers on backup.

 

[Jose]

I think they will be locked in to selling no matter what. That is the whole purpose of accepting backup offers to Hansen. I think the only question is whether there will be one or two local offers on backup.

I agree they'll sell no matter what. But the BoG cannot make them sell. They can only reject the sale/relocation to Seattle. Once that is rejected, though, they'll be under tremendous pressure to sell to Mastrov.

 

[UK_King]

They definitely can't be "locked in" to selling. But they are so far down the road now i don't see any reason why they won't.

they could conceivably just keep the team for as long as they want.

 

[kingjatt]

They definitely can't be "locked in" to selling. But they are so far down the road now i don't see any reason why they won't.

they could conceivably just keep the team for as long as they want.

it would be throwing alot of cash down the drain just to stick it to KJ and Stern. Which wouldnt surprised me since the goofs have behaved like spiteful teenage girls through all of this.

But yes if they can meet payroll and the salary floor they could keep the team until KJ is out of office and try to sell it then. all indications and reports point to them being out for good after the season.

 

[funkykingston]

it would be throwing alot of cash down the drain just to stick it to KJ and Stern. Which wouldnt surprised me since the goofs have behaved like spiteful teenage girls through all of this.

But yes if they can meet payroll and the salary floor they could keep the team until KJ is out of office and try to sell it then. all indications and reports point to them being out for good after the season.

I think people need to let go of the notion that the Maloofs might try to hang on to the team if relocation is denied. Quite frankly I think they are emotionally detached from the team at this point. In their mind they are selling and the primary (and probably sole) motivation is money, not spite. As long as they get the same amount of money either way I can't see them caring. The Thomas Robinson trade was simply about cushioning the financial loss they are apparently going to suffer this season. As much as Joe and Gavin may truly want to keep the Kings they clearly signed off on selling and have made their peace with it. If the BOG says no to Seattle then they'll grab the Sacramento deal and exit stage left, no doubt in my mind.

Besides, in the absolutely unlikely scenario that they don't want to sell to Mastrov/Burkle if the Hansen/Ballmer deal is rejected the NBA would simply step in. This circus has gone on long enough. The endgame would be the "best interest of the league" clause and the fact that Maloofs signed an agreement for a certain amount of money. If need be the NBA ponies up that money itself and sends George and company on their way.

But believe me, that's never going to happen. As much as we might all hate the Maloofs now, they simply want to sell their team at this point and they will, to one group or the other.

 

[Glenn]

They definitely can't be "locked in" to selling. But they are so far down the road now i don't see any reason why they won't.

they could conceivably just keep the team for as long as they want.

They are the Maloofs who seem to be governed by emotion (anger) rather than plain old common sense.. There doesn't need to be a reason that you and I could understand.

 

[Warhawk]

I think it is already established they will take other offers if Seattle doesn't pan out for them (from Twitter):

Ryan Lillis‏@Ryan_Lillis

Correction: Kehriotis has contacted Maloofs about submitting "back-up" offer for #NBAKings. Maloofs will accept back-up offers

11:33 AM - Feb 27, 2013

 

[kingjatt]

I think people need to let go of the notion that the Maloofs might try to hang on to the team if relocation is denied. Quite frankly I think they are emotionally detached from the team at this point. In their mind they are selling and the primary (and probably sole) motivation is money, not spite. As long as they get the same amount of money either way I can't see them caring. The Thomas Robinson trade was simply about cushioning the financial loss they are apparently going to suffer this season. As much as Joe and Gavin may truly want to keep the Kings they clearly signed off on selling and have made their peace with it. If the BOG says no to Seattle then they'll grab the Sacramento deal and exit stage left, no doubt in my mind.

Besides, in the absolutely unlikely scenario that they don't want to sell to Mastrov/Burkle if the Hansen/Ballmer deal is rejected the NBA would simply step in. This circus has gone on long enough. The endgame would be the "best interest of the league" clause and the fact that Maloofs signed an agreement for a certain amount of money. If need be the NBA ponies up that money itself and sends George and company on their way.

But believe me, that's never going to happen. As much as we might all hate the Maloofs now, they simply want to sell their team at this point and they will, to one group or the other.

as glenn alluted too above, its the maloofs, nothing can be assumed with these guys.

 

[ParniValjak]

as glenn alluted too above, its the maloofs, nothing can be assumed with these guys.

Yet the NBA has the ability to step in and take over just like they did with the New Orleans Hornets. Maloofs will play nice no doubt because in their mind, this is the down time and the wheel will turn and eventually they will see themselves as getting back into the NBA. They won't be vindictive about this. They are out, they know they are out and if NBA rejects the sale and relocation request to Seattle, then Maloofs will sell to someone else. Whether that is JK or Mastrov/Burkle remains to be seen but they will not be spiteful because a) they can't afford it and b) they are deluded enough to believe that when the wheel turns, they will be back in the NBA.

Going against the NBA is not a smart move if they have any hope of ever owning a franchise again.

 

[Glenn]

Yet the NBA has the ability to step in and take over just like they did with the New Orleans Hornets. Maloofs will play nice no doubt because in their mind, this is the down time and the wheel will turn and eventually they will see themselves as getting back into the NBA. They won't be vindictive about this. They are out, they know they are out and if NBA rejects the sale and relocation request to Seattle, then Maloofs will sell to someone else. Whether that is JK or Mastrov/Burkle remains to be seen but they will not be spiteful because a) they can't afford it and b) they are deluded enough to believe that when the wheel turns, they will be back in the NBA.

Going against the NBA is not a smart move if they have any hope of ever owning a franchise again.

There you go again. Trying to be rational. I hope they have gone past that point that triggers the NBA to take over. Certainly the process in place will be allowed to run it's course by April 18 or so. After that, depending on the results and the Maloofs response to the results, the NBA might very well step in and put the Maloofs down and heal the pain of all of us fans. Let us hope.

 

[The Hammer]

I know I don't know all the behind the scenes details going on between the Maloofs and the NBA, therefore, I know I can't know for sure what forces are moving the Maloofs in regards to the NBA.

However, I do know that the Maloofs owe the NBA approx 100 meeeelllion dollars.

But I don't know how that loan was structured, and if it can be called in at any time by the NBA to force the Maloofs into what the NBA wants.

I don't know if that 100 meeeeelllion dollars needs to be paid off before a sale can happen, or, if the lien created by that loan gives the NBA more power to choose new owners.

I do know that you can't just steal a team and move it cause you're willing to pay more that some other douche.

I have a hunch that M/B would not be messing around with this if they were not essentially informed what kind of bid they needed to submit, and, therefore, perhaps even guaranteed that they would become the new owners (given arena deal comes together).

I also have a hunch that the NBA, and Stern were very clear with M/B and KJ about what needed to get done in order for the team to stay and transfer ownership, just as they were clear about what needed to be done to block the move to Anaheim.

I have a hunch that those at the high levels of this thing are being very clear with each other, and are NOT telling any media people.

This is the information I'm personally working with. Therefore, I am 100% certain the Kings will stay, and M/B will become the new owners.

 

[Mojo]

Any links to this? I haven't seen anything but speculation built off of wojo's initial article that it may be slightly lower. Have you seen something new today?

Apparently it was brought up by a Sea radio host who has heard the numbers. He said the offer should be leaking soon enough and that it was signifcantly low. Doesn't mean much and is probably just yap from that side.

 

[JB_kings]

I know I don't know all the behind the scenes details going on between the Maloofs and the NBA, therefore, I know I can't know for sure what forces are moving the Maloofs in regards to the NBA.

However, I do know that the Maloofs owe the NBA approx 100 meeeelllion dollars.

But I don't know how that loan was structured, and if it can be called in at any time by the NBA to force the Maloofs into what the NBA wants.

I don't know if that 100 meeeeelllion dollars needs to be paid off before a sale can happen, or, if the lien created by that loan gives the NBA more power to choose new owners.

I do know that you can't just steal a team and move it cause you're willing to pay more that some other douche.

I have a hunch that M/B would not be messing around with this if they were not essentially informed what kind of bid they needed to submit, and, therefore, perhaps even guaranteed that they would become the new owners (given arena deal comes together).

I also have a hunch that the NBA, and Stern were very clear with M/B and KJ about what needed to get done in order for the team to stay and transfer ownership, just as they were clear about what needed to be done to block the move to Anaheim.

I have a hunch that those at the high levels of this thing are being very clear with each other, and are NOT telling any media people.

This is the information I'm personally working with. Therefore, I am 100% certain the Kings will stay, and M/B will become the new owners.

I have a hunch that I agree with all of this.

 

[SacTownKid]

Apparently it was brought up by a Sea radio host who has heard the numbers. He said the offer should be leaking soon enough and that it was signifcantly low. Doesn't mean much and is probably just yap from that side.

So a Seattle radio host heard the numbers, but nobody else has? Yeah, seems really legit to me!

 

[The Hammer]

I have a hunch that I agree with all of this.

JB -- That is a very bold prediction.


*airfive*