AEG projections

kupman

Starter
Maloofs doubted AEG revenue estimate

http://www.sacbee.com/2012/04/20/4428438/maloofs-doubted-aeg-revenue-estimate.html

If I'm reading this article correctly, AEG initially predicted that with a $75 million dollar payroll the Maloofs would have made an $11 million/year profit. But since that initial projection they've actual increased that number to $13 million/year. That also doesn't take into account revenue sharing which would have been another $15 million. And based off the Letter Lehane released a few days ago these projections were made with an average attendance rate of around 15,300 people per Kings game.

So what am I missing here? According to this info they would have made approximately $28 million/year in profit, but to the Maloofs the deal wasn't good enough.
 
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So many questions... but for starters, why is "other" under costs at 41.6 million? It's not under debt.
 
And what are the chances they would be spending $75 mil a year on player salary anyway. Wouldn't the knew luxury tax structure by in place by then? Unless the salary cap would go up that high in the next 3 years, but I don't think it would.
 
Breton brought up an interesting point today. Maloofs received the AEG revenue projections back in Nov. So, why not complain about all this before?

Their financial situation may be crumbling, and crumbling very quickly.
 
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According the the Maloofs own economist they would be 5 to 15 mil short of projections. That doesn't count the 15 mil in revenue sharing they are scheduled to get. Correct me if I'm wrong but it looks like 10 to 12 mil profit in the worst case scenario. If the Kings became a playoff contender revenues will probably explode! What is the problem here?
 
According the the Maloofs own economist they would be 5 to 15 mil short of projections. That doesn't count the 15 mil in revenue sharing they are scheduled to get. Correct me if I'm wrong but it looks like 10 to 12 mil profit in the worst case scenario. If the Kings became a playoff contender revenues will probably explode! What is the problem here?

precisely. they think they would get even more down in anaheim.
 
Breton brought up an interesting point today. Maloofs received the AEG revenue projections back in Nov. So, why not complain about all this before?

Their financial situation may be crumbling, and crumbling very quickly.


Actually, George Maloof mentioned that he did complain about it right away back in Nov as those projections doesn't allow for any economic downturns. He is trying to be conservative about new investments apparently because they got burned like the rest of Vegas with overly ambitious expansions.
 
The family's economic consultant, Christopher Thornberg, said at the news conference that AEG based its projections on the Kings' performance in 2005 and 2006 – when the team was a contender and the Sacramento economy was overheated by a real estate boom.

This is a bit nit-picky but, barely nabbing the 8th and final playoff spot and getting bounced in the first round is not a contender.
 
I exchanged tweets with Dale Kasler who wrote the article. The NBA backs AEGs numbers and even thought the revenue projections were low due to revenue sharing. Once again the Maloofs logic flys in the face of even the agent who represented them.
 
This is a bit nit-picky but, barely nabbing the 8th and final playoff spot and getting bounced in the first round is not a contender.

It's hard to predict economic trends, but 05-06 was a time when home prices skyrocketed and home owners felt very wealthy. What AEG should do is make another projection based on 2 years with bad economies such as 2010-11 and share that report with the public again. Compare the best and worse case scenarios side by side.
 
It's hard to predict economic trends, but 05-06 was a time when home prices skyrocketed and home owners felt very wealthy. What AEG should do is make another projection based on 2 years with bad economies such as 2010-11 and share that report with the public again. Compare the best and worse case scenarios side by side.

Nope not even close to mattering. Home prices had absolutely nothing to do with. Your telling me that people were selling their homes or taking our equity loans to buy Kings tickets? Or we're they all real estate and loan agents buying tickets? Please explain why the previous 8 years were sellouts and how about from 85-97? I still see the same people in my area that have had tickets since 98 when I moved to my current location.

the biggest reason for lack of attendance is the lack of plan for a new arena, relocation and the Maloofs. Remove those factors and it will sellout more than not.
 
It's hard to predict economic trends, but 05-06 was a time when home prices skyrocketed and home owners felt very wealthy. What AEG should do is make another projection based on 2 years with bad economies such as 2010-11 and share that report with the public again. Compare the best and worse case scenarios side by side.

Hi George, if you could please just sell the team to ROn Burkle it would be greatly appreciated. No need to go online
 
Hi George, if you could please just sell the team to ROn Burkle it would be greatly appreciated. No need to go online

The poster has been pro-move to Anaheim for a long time now. Obviously it's to his benefit to prop up the Maloofs and defend them. Probably secretly knows they are dirt bags but doesn't care because Samueli will end up owning the team anyway.
 
Actually, George Maloof mentioned that he did complain about it right away back in Nov as those projections doesn't allow for any economic downturns. He is trying to be conservative about new investments apparently because they got burned like the rest of Vegas with overly ambitious expansions.

So basically you're taking George's word for face value? 15,000 fans per game is pretty conservative unless you plan to put a crappy product on the floor.
 
The poster has been pro-move to Anaheim for a long time now. Obviously it's to his benefit to prop up the Maloofs and defend them. Probably secretly knows they are dirt bags but doesn't care because Samueli will end up owning the team anyway.

So let me get this straight: there's basically one guy defending the Maloofs, and he wants them to move to Anaheim?
 
So let me get this straight: there's basically one guy defending the Maloofs, and he wants them to move to Anaheim?

Almost. There are TWO guys who defend the Maloofs, and say the Kings would be better off in Anaheim.
 
He lives down there.

And his arguments are along the lines of "It would be better for the Kings to be in Anaheim"??? Really? You're doing this for the sake of the KINGS??? Or for some other altruistic motive??? For justice?

Why can't he just come out and say "We're trying to steal your team." ???

The only problem with the Kings in Sacramento are the stubborn and broke owners who wouldn't/couldn't take a DREAM deal for a new arena.

Why is this guy even still arguing? Can't you ban people for stupidity?
 
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He lives down there.

Heck, I live down here too but I can't stand the thought of the Kings being here. Not only is it horrible for Sacramento but the league doesn't want to saturate the market. Other than the fact that the sightlines are better than Staples for NBA basketball, there is very little good that would come out of a 3rd team being in the market. This is just one of many reasons why I've wanted Sterling to sell to someone who would move the Clips to Anaheim.

Seriously, what options would the Maloofs have if you take Anaheim off the table? I'm guessing San Jose but the Warriors are prepared to put up an even bigger fight than the Buss and Sterling would.
 
Breton brought up an interesting point today. Maloofs received the AEG revenue projections back in Nov. So, why not complain about all this before?

Their financial situation may be crumbling, and crumbling very quickly.
The negotiator for the league said every Maloof redline issue was raised during negotiations and they were all addressed. At least the NBA and the city felt that way.

My fundamental question is what the heck were the Maloofs doing during negotiation? If they still had so many objections to the outline of the deal, then they should never have signed the terms sheet in the first place, non-binding or not.
 
The negotiator for the league said every Maloof redline issue was raised during negotiations and they were all addressed. At least the NBA and the city felt that way.

My fundamental question is what the heck were the Maloofs doing during negotiation? If they still had so many objections to the outline of the deal, then they should never have signed the terms sheet in the first place, non-binding or not.

What has me scratching my head is that the NBA acted as the agent for the Maloofs. So did the NBA not represent their interests/concerns in this deal? I'm with the city here on wonder who has the authority to make a deal? Now it seems like all that time was wasted and the negotiations should have left the NBA out. We all probably thought the NBA had some leverage over the Maloofs. Maybe they still do and we aren't privy to all the details.
 
What has me scratching my head is that the NBA acted as the agent for the Maloofs. So did the NBA not represent their interests/concerns in this deal? I'm with the city here on wonder who has the authority to make a deal? Now it seems like all that time was wasted and the negotiations should have left the NBA out. We all probably thought the NBA had some leverage over the Maloofs. Maybe they still do and we aren't privy to all the details.

If you recall back to when this latest chapter of the saga started, it was somewhat dubious how the NBA came to be negotiating for the Maloofs. While the public statements were made to indicate the Maloofs "requested" the NBA to negotiate for them, it was in fact a takeover move by the NBA. It all happened when the NBA was taking over marketing for the Kings as the Maloofs showed themselves to be either neglecting or intentionally sabotaging the sponsorship market. To me and every other rational person this was obvious, but in order to let the Maloofs save face (and not totally poison their relationship to the fans), they made it appear as though they brought the NBA in to go to bat for them. In reality, the NBA was taking the reins because there were no signs that the Maloofs did indeed want to stay.

Not sure if the NBA foresaw (can't imagine they wouldn't) the current scenario where they negotiate a damn good deal for the Kings, one I'm sure that passes every measure of acceptability -- I don't believe for a second that, according to the Maloofs, "many" owners came up to them and said don't take the deal, it's crazy etc. -- only to have it blown up by George. But if they did, I'm sure they're thinking several steps ahead.

What this process is likely all about is basically flushing out any excuses for the Maloofs to leave town. The NBA needs solid evidence they they were sabotaging, etc., and the rejection of a solid deal is just another check mark in that column. It's just cutting off another avenue of exit for the Maloofs. While I think they were of course hoping the Maloofs took the deal I'd be shocked to find out it took the NBA off guard when they blew it up.

I doubt the NBA has the authority to force them to take/make a deal, but that it's gotten to this point is still a good step. What remains clear though, is that the "concerns" (what a butchering of the term) the Maloofs had are absolute deal breakers, and everybody knows that. It's just not out in the open and mutually acknowledged. No collateral of the refi loan??? That's just a joke. The NBA, not being stupid, of COURSE were aware of these "redlined" concerns, long ago. But were maybe just hoping that the Maloofs wouldn't hold fast to them, killing the deal. In all likelihood, since they in the first place had to essentially step in and babysit the Maloofs away from a total sabotage of the market, they anticipated it would come to this, and that the Maloofs would demand to be lead negotiators once again. Now however, there is this deal in place. It has motivated the city to come up with the money, motivated AEG, and provides a template for the Maloofs working something out with the City.

I guess depending on how reasonable/unreasonable Georgie is going forward, we'll find out who's really got the power. If he continues with the deal killing demands... at this point he's just hemming himself in, because there's no way the BOG approves a move after an NBA negotiated (and darn good) deal was on the table, especially with terms that are better than what they agreed to in Anaheim. And maybe that was the goal of the NBA, just negotiate a deal that is better than what they already agreed to in Anaheim so they can make that argument to the BOG if/when Georgie tries to head for the orange groves once more. Which, basically just gives all the other owners enough reason to shoot them down. Shooting them down just to protect Jerry Buss is not enough when weighed against an owner's purported right to do what's best for his investment. Shooting them down because they are sabotaging a market and blowing up a sweetheart arena deal is.
 
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What has me scratching my head is that the NBA acted as the agent for the Maloofs. So did the NBA not represent their interests/concerns in this deal? I'm with the city here on wonder who has the authority to make a deal? Now it seems like all that time was wasted and the negotiations should have left the NBA out. We all probably thought the NBA had some leverage over the Maloofs. Maybe they still do and we aren't privy to all the details.


And who would know better than the NBA as to what is typically considered fair in an arena deal! With the kind of job Stern did in the lockout you know that he's going to get his way in a business deal, no way Sac and Johnson reamed him during negotiations.

Wait, that sounded kind of gross....
 
If you recall back to when this latest chapter of the saga started, it was somewhat dubious how the NBA came to be negotiating for the Maloofs. While the public statements were made to indicate the Maloofs "requested" the NBA to negotiate for them, it was in fact a takeover move by the NBA. It all happened when the NBA was taking over marketing for the Kings as the Maloofs showed themselves to be either neglecting or intentionally sabotaging the sponsorship market. To me and every other rational person this was obvious, but in order to let the Maloofs save face (and not totally poison their relationship to the fans), they made it appear as though they brought the NBA in to go to bat for them. In reality, the NBA was taking the reins because there were no signs that the Maloofs did indeed want to stay.

Not sure if the NBA foresaw (can't imagine they wouldn't) the current scenario where they negotiate a damn good deal for the Kings, one I'm sure that passes every measure of acceptability -- I don't believe for a second that, according to the Maloofs, "many" owners came up to them and said don't take the deal, it's crazy etc. -- only to have it blown up by George. But if they did, I'm sure they're thinking several steps ahead.

What this process is likely all about is basically flushing out any excuses for the Maloofs to leave town. The NBA needs solid evidence they they were sabotaging, etc., and the rejection of a solid deal is just another check mark in that column. It's just cutting off another avenue of exit for the Maloofs. While I think they were of course hoping the Maloofs took the deal I'd be shocked to find out it took the NBA off guard when they blew it up.

I doubt the NBA has the authority to force them to take/make a deal, but that it's gotten to this point is still a good step. What remains clear though, is that the "concerns" (what a butchering of the term) the Maloofs had are absolute deal breakers, and everybody knows that. It's just not out in the open and mutually acknowledged. No collateral of the refi loan??? That's just a joke. The NBA, not being stupid, of COURSE were aware of these "redlined" concerns, long ago. But were maybe just hoping that the Maloofs wouldn't hold fast to them, killing the deal. In all likelihood, since they in the first place had to essentially step in and babysit the Maloofs away from a total sabotage of the market, they anticipated it would come to this, and that the Maloofs would demand to be lead negotiators once again. Now however, there is this deal in place. It has motivated the city to come up with the money, motivated AEG, and provides a template for the Maloofs working something out with the City.

I guess depending on how reasonable/unreasonable Georgie is going forward, we'll find out who's really got the power. If he continues with the deal killing demands... at this point he's just hemming himself in, because there's no way the BOG approves a move after an NBA negotiated (and darn good) deal was on the table, especially with terms that are better than what they agreed to in Anaheim. And maybe that was the goal of the NBA, just negotiate a deal that is better than what they already agreed to in Anaheim so they can make that argument to the BOG if/when Georgie tries to head for the orange groves once more. Which, basically just gives all the other owners enough reason to shoot them down. Shooting them down just to protect Jerry Buss is not enough when weighed against an owner's purported right to do what's best for his investment. Shooting them down because they are sabotaging a market and blowing up a sweetheart arena deal is.

The NBA took over for arena talks after Q & R failed. They have been heading it ever since.
 
The NBA took over for arena talks after Q & R failed. They have been heading it ever since.

"Heading" efforts to get an arena deal are a lot different that representing a party in negotiations. In the past, they sent guys out here to work in a general way to try to get a deal together, and they are completely different people than who negotiated this deal. The guy who the NBA hired to try to get something done back then threw his arms up basically declaring city hall to be a total mess (read: Fargo).

This time around, the NBA had to specifically "represent the Kings" side of things in hammering out term sheet negotiations in an actual deal, under a deadline, and it was the city (KJ) who was pulling everything else together. Totally different situation, different politics, and different exposed motives.

The problem in the past had always been the city. Now, unfortunately for George, the city's not the problem, AND there was a sweetheart deal in place. Just further exposes his real motives.
 
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So basically you're taking George's word for face value? 15,000 fans per game is pretty conservative unless you plan to put a crappy product on the floor.

15,000 is VERY conservative...considering we're averaging like 14,000 this year with a crappy team, crappy owners and no vision for the future.
 
"Heading" efforts to get an arena deal are a lot different that representing a party in negotiations. In the past, they sent guys out here to work in a general way to try to get a deal together, and they are completely different people than who negotiated this deal. The guy who the NBA hired to try to get something done back then threw his arms up basically declaring city hall to be a total mess (read: Fargo).

This time around, the NBA had to specifically "represent the Kings" side of things in hammering out term sheet negotiations in an actual deal, under a deadline, and it was the city (KJ) who was pulling everything else together. Totally different situation, different politics, and different exposed motives.

The problem in the past had always been the city. Now, unfortunately for George, the city's not the problem, AND there was a sweetheart deal in place. Just further exposes his real motives.

Uh, remember the cal expo deal? The NBA was the lead in the negotiations in that one too.
 
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