City hires law firm to review bonds agreement

Glenn

Glenn

Hall of Famer
#2
#2
Section 101 said:
http://blogs.sacbee.com/sports/kings/archives/2011/03/city-taps-law-f.html

Now they just need to find the bonds need to be paid before they can move because if they default and the city gets part ownership it could change the internal vote.

The article also confirms the city owns the arena until the bonds are paid in full.
Click to expand...
I don't know if that is good or bad for the city. I know that if the Maloofs default on another loan/bond issue as they did with the Palms, they will be selling pencils on the sidewalk as they will have an incredibley difficult time getting another loan. They are a sinking ship and banks aren't lending to business that have good credit much less busines that have bad credit.
 
Capt. Factorial

Capt. Factorial

ceterum censeo delendum esse Argentum
Staff member
#3
#3
Section 101 said:
Now they just need to find the bonds need to be paid before they can move because if they default and the city gets part ownership it could change the internal vote.
Click to expand...
This is huge - apparently a $25M stake. If the franchise is worth $250M that would be 10 percent, 5.1 percent of which would presumably come from the Maloofs (if it is spread equitably amongst the owners). By all accounts the remainder of the owners will want the team to stay in Sacramento, as does the city. If this is correct, and if the Maloofs really own only 51% of the team, they would certainly lose any internal vote to move the team.

This means that in addition to the relocation fees, the Maloofs would need to come up with $70M to pay off the bonds. They can't default and keep control of the team. Meanwhile, that 10% clause in the Lakers' TV deal could cost them $300M over the course of the deal (if the $3B report is correct). They'd almost certainly insist, and with good reason, for at least $100M in compensation for them alone. Could the Kings face a $130M relocation fee? Is Samueli going to come up with that kind of loan? And can the Kings afford to take out $200M in loans to go somewhere else and become a tenant?

How do those numbers work for the Maloofs? Seems like a bad deal to me, if the gist of it is accurate.
 
J

JB_kings

Starter
#4
#4
A few thoughts on this. The city is spending a hefty chunk of change to get this checked out. They are very concerned. And if they are concerned about being left holding the bag, we should be too. Nowhere does it look like the Maloofs have lined up the funds to pay off the bonds. I'm guessing they are going to walk away and let the building default. The price to pay for doing that will be tied up in litigation for a long time.

Stern is not waiting until April BOG meeting to see how this is going to shake out. I would bet he has been advising and participating in a very active role on the Maloofs behalf. It's a huge deal and impacts more than one team and he would never let that go on it's own with his guidance.
 
Section 101

Section 101

All-Star
#5
#5
JB_kings said:
A few thoughts on this. The city is spending a hefty chunk of change to get this checked out. They are very concerned. And if they are concerned about being left holding the bag, we should be too. Nowhere does it look like the Maloofs have lined up the funds to pay off the bonds. I'm guessing they are going to walk away and let the building default. The price to pay for doing that will be tied up in litigation for a long time.

Stern is not waiting until April BOG meeting to see how this is going to shake out. I would bet he has been advising and participating in a very active role on the Maloofs behalf. It's a huge deal and impacts more than one team and he would never let that go on it's own with his guidance.
Click to expand...
I don't think Stern wants a black eye for one of his owners to default on anything. The league would lose alot credibilty. This is why they bought the Hornets.

I think the city is worried that the Maloofs may think they have a loop hole and dont have to pay it all off at once.
 
S

Siranthony

Starter
#6
#6
It seems this is the American way. Just default on your loans and responsibilities. Leave the government and taxpayers holding the bag. The Maloofs realy want to screw sacramento it seams. Unless they have 70mi comming.
 
Section 101

Section 101

All-Star
#8
#8
Superman said:
Assuming the Kings paid all obligations back to Sacramento, they would still own PBP right?
Click to expand...
Almost correct. They would take back ownership if they pay off the bonds. The city currently owns the arena.

But there was also a clause that the city would be able to run the arena if the team is moved. Lets see what the lawyers say.
 
Circa_1985_Fan

Circa_1985_Fan

All-Star
#9
#9
Siranthony said:
It seems this is the American way. Just default on your loans and responsibilities. Leave the government and taxpayers holding the bag. The Maloofs realy want to screw sacramento it seams. Unless they have 70mi comming.
Click to expand...
1)I don't think the Maloofs are out to screw the city of Sacramento when they are about to lose the Palm due to about $700 million they owe to the banks for that...I doubt they want to add another $70 million to that sum, PLUS legal costs, etc.

2)NONE of us know for sure what's going to happen. Yes they may leave, but what will be the fallout of that? They may stay after figuring out that all the financial bleeding they'd do in moving would be more catestrophic than staying here and biting the bullet until someone gets an arena deal done here.

3)The world may explode in an incredible series of earthquakes...the thing I'm saying is: NOBODY knows exactly what's going on and what's going to happen in the next two and a half weeks. It will be an eye opening ride nonetheless.

What will happen will happen...what the Family Maloof has in mind, we'll find out very soon...no one has laid down their perverbial cards yet and gone 'all in'.
 
pdxKingsFan

pdxKingsFan

So Ordinary That It's Truly Quite Extraordinary
Staff member
#10
#10
If the Palms is indeed a major factor in this potential relocation it is all the MORE reason for the NBA to step in and put a stop to it. The Palms isn't the NBA's problem and this could send a terrible message to fans in about 1/3rd of the NBA market cities.
 
M

mr. moustache

Bench
#11
#11
Circa_1985_Fan said:
1)I don't think the Maloofs are out to screw the city of Sacramento when they are about to lose the Palm due to about $700 million they owe to the banks for that...I doubt they want to add another $70 million to that sum, PLUS legal costs, etc.

2)NONE of us know for sure what's going to happen. Yes they may leave, but what will be the fallout of that? They may stay after figuring out that all the financial bleeding they'd do in moving would be more catestrophic than staying here and biting the bullet until someone gets an arena deal done here.

3)The world may explode in an incredible series of earthquakes...the thing I'm saying is: NOBODY knows exactly what's going on and what's going to happen in the next two and a half weeks. It will be an eye opening ride nonetheless.

What will happen will happen...what the Family Maloof has in mind, we'll find out very soon...no one has laid down their perverbial cards yet and gone 'all in'.
Click to expand...
The Maloofs can't afford to own a basketball team and should sell the team. Realistically; anyone buying the team is going to move them. I'm just curious if they're going to lose their team while it's in Sac or Aneheim.
 
S

Superman

All-Star
#12
#12
pdxKingsFan said:
If the Palms is indeed a major factor in this potential relocation it is all the MORE reason for the NBA to step in and put a stop to it. The Palms isn't the NBA's problem and this could send a terrible message to fans in about 1/3rd of the NBA market cities.
Click to expand...
I think you're getting off topic. Seems to me like a move would address the arena situation and make the franchise more profitable (yes, they've been turning a profit, but with low operating costs). At least that's what the Maloofs would be hoping. It's all about the arena and the TV deal.
 
You must log in or register to reply here.