Fallout - Consequences of the Maloof's Rejection

[MDM]

This story is not over. The Maloofs just played some of the most powerful people in the the country. A few of them, if not all of them will remember these events vividly and will look for accountability.

Remember, who was involved in this and stuck their neck out: Kevin Johnson and the entire City Council, AEG, the NBA, David Taylor and the ICON group, the Tahoe-Reno Olympic Committee, every party that was about to bid $200 million on the parking structures, Darrell Steinberg, Ted Gaines, and way more.

All these people just got embarrassed. All of them hold power that the NBA doesn't want to mess with. In the short term, the Maloofs and NBA might not have to deal with Sacramento. However, in the long run, the NBA is going to need a favor from one of these powerplayers and they will remember this day. Even if the NBA doesn't foresee needing a favor now, these politicians have the power to make the NBA remember who's boss.

I don't know if these consequences will result in Sacramento getting a new arena or the Kings staying here. They might. They might not. However, this story is not over regardless. Darrell Steinberg is already looking for blood:

Regardless of where you stand on the arena the facts are clear: the city stepped up and the Maloofs did not. Sacramento deserves partners who will live by their word. I stand with the Mayor and the city to do everything possible to protect Sacramento’s interest. I hope the NBA and its owners do not allow this kind of bad behavior to occur without consequences. I look forward to meeting with Mayor Johnson and city officials to consider next steps

http://www.fox40.com/news/headlines/ktxl-new-arena-deal-in-jeopardy-20120413,0,5690224.story

The Maloofs messed with way too many powerplayers for this to be water under the bridge. Either the NBA solves this issue with the Maloofs themselves, or the NBA and Maloofs are going to be paying a price for a long time whether they stay in Sacramento or leave.

 

[Siranthony]

Well it's easy to say that and I hope it's true. As a fan I feel there is an injustice here. I don't believe a word the Maloofs say. I don't know what crazy game they are up to but I like a lot of people are pissed off. I want some resloution with this. The city deserves vindication for what it did. The Maloofs are useless in my mind and can not be trusted.

 

[captain bill]

AEG is the partner that would have the most sway, I think. They built LA Live/Staples and have had a hand in most of the big sports development projects. I'm sure they at least invested a decent chunk of time and money in this project and are going to be unhappy with the Maloofs underhanded dealing.

You're also forgetting the biggest opponents of this deal: Jerry Buss and Donald Sterling.

Come to think of it, probably the only business interests who are happy about this are Samueli and the Anaheim City Council. If there is significant backlash out of Southern California, it might whip the Maloofs into learning their lesson.

Then again, they might just try to bolt to KC, St Louis or Seattle, but I can't imagine they're going to have any help doing it now that developers and investors have seen their complete incompetence, stupidity, and lack of trustworthiness laid bare.

Would anyone (other than the NBA) seriously consider giving them a major loan? These guys are spoiled brats, complete jokes.

 

[Gary]

Yah the Maloofs f-ed up big time. There is no getting out of this one. I am sure it's because they figured they wouldn't be owners for very long, and they wanted to squeeze as much money out of it as possible before they sell, which they couldn't do in the time alloted in Sac before the arena woul dhave been built.

Bottom line is they are broke, and I have been saying this for more than a year. They are looking for an out without them losing credibility (or so they hoped, which imo they have already lost).

Sell to Samueli when they are in Anaheim after a couple years and make the quick cash. It was their intent all along.

they are a couple of douchebags.

My hope is that the NBA does everything in their power to block them trying to move the team and are forced to sell because they can't make money here. Then the arena deal moves forward with a new owner.

 

[JB_kings]

They pretty much look committed to the path of burning the bridge here. The only question that remains is whether or not the NBA is going to fight the antitrust litigation threat. It's clear to me that George has a plan to move this summer. The talk of staying and remodeling Arco is nothing but a red herring. They know the city won't play that game. If the NBA fights this, than perhaps a temporary injunction to keep them from moving is the weapon of use to keep the team in Sacramento and wear down the Maloofs reserves. My personal feeling is that Stern has been ready for this and probably will be up for the fight. It's one thing to mess around with his smaller markets, but messing around with his power and authority cuts to his core. Another sign that he is up for this is the fact that he did not announce his plan to transfer the commissioner job over to Adam Silver as expected today. Yoda has more fight left in him I think.

 

[rainmaker]

They petty much look committed to the path of burning the bridge here. The only question that remains is whether or not the NBA is going to fight the antitrust litigation threat. It's clear to me that George has a plan to move this summer. The talk of staying and remodeling Arco is nothing but a red herring. They know the city won't play that game. If the NBA fights this, than perhaps a temporary injunction to keep them from moving is the weapon of use to keep the team in Sacramento and wear down the Maloofs reserves. My personal feeling is that Stern has been ready for this and probably will be up for the fight. It's one thing to mess around with his smaller markets, but messing around with his power and authority cuts to his core. Another sign that he is up for this is the fact that he did not announce his plan to transfer the commissioner job over to Adam Silver as expected today. Yoda has more fight left in him I think.

Also probably sees future problems with wherever the Maloofs might land. It's not as if them moving is the end or would be the end of dealing with problems with the Maloofs for the league. Not with backdoor deals looking to sell to Samueli.

Just wish the city or the league could call in the debt owed. That could really tighten the noose. Financially them might be worse off than anyone expected. Seems a loan from the league was the only way they could come up with 73M for the arena.

 

[Sac.1989]

Top post JB. I hope your right in everything you've said. Sterns last mark can be keeping the kings in sacto somehow by ridding us of the malooofs

 

[Mal]

"these politicians have the power to make the NBA remember who's boss."

Are you kidding? Politicians can be bought for a fraction of the money involved, here.

 

[bajaden]

I'm not an attorney, but if I remember correctly, antitrust laws are there to prevent one business or corporation from monoplizing one area of the business world. Such as one auto manufacturing company using tactics to put all others out of business, and therefore giving consumers little choice but one stop shopping. I know that baseball has an exception that goes back to the stone age. Not sure of all the rules where private clubs are involved, but its been my experience, that when you join a private club, which the NBA is, and you know all the rules when you join, then you have to abide by those rules. No one forced you to join! If you don't like the rules, don't join!

So I'm not sure what legs the Maloofs have to stand on with any kind of antitrust suit. Plus the negatives from such a suit would far outweigh any positives. They would surely alienate all the owners and the comish. It would cost them a fortune in court costs with a suit that could drag on for years and probably end up in the US surpreme court. If the Maloofs have the resources to go that far. We know the league does. Plus, I don't know the terms on the money the Maloofs borrowed from the league, but filing suit against the league might be grounds to call in that debt.

I know wonderful Al Davis went against the NFL in a suit to move the Raiders to LA and won. Different league with different rules, and its been too long ago for me to remember all the details, other than I wanted Davis to get hit by a truck at the time. But, maybe there's a way they can follow the same path. Maybe someone that remembers all the details can enlighten us.

My question is, if you don't have the money to put up for the redevelopment fee's, where are you going to get the money to sue the league. I suspect the first thing the league would do, is cut off all revenue sharing to a team thats suing them. My hope, and this is what I believe, is that the Maloofs are hanging on by a thread. They know it, and the league knows it. The situation is similiar, but not exactly the same, to that of George Shinn, who finally threw in the towel and gave up the team. I watched George Maloof carefully yesterday, and he had the look of a drowning man thrashing about in the water. Anyone that tries to rescue him will probably be pulled down with him. That was the most bizarre press conference I've ever seen.

 

[LPKingsFan]

I'm not an attorney, but if I remember correctly, antitrust laws are there to prevent one business or corporation from monoplizing one area of the business world. Such as one auto manufacturing company using tactics to put all others out of business, and therefore giving consumers little choice but one stop shopping. I know that baseball has an exception that goes back to the stone age. Not sure of all the rules where private clubs are involved, but its been my experience, that when you join a private club, which the NBA is, and you know all the rules when you join, then you have to abide by those rules. No one forced you to join! If you don't like the rules, don't join!

So I'm not sure what legs the Maloofs have to stand on with any kind of antitrust suit. Plus the negatives from such a suit would far outweigh any positives. They would surely alienate all the owners and the comish. It would cost them a fortune in court costs with a suit that could drag on for years and probably end up in the US surpreme court. If the Maloofs have the resources to go that far. We know the league does. Plus, I don't know the terms on the money the Maloofs borrowed from the league, but filing suit against the league might be grounds to call in that debt.

I know wonderful Al Davis went against the NFL in a suit to move the Raiders to LA and won. Different league with different rules, and its been too long ago for me to remember all the details, other than I wanted Davis to get hit by a truck at the time. But, maybe there's a way they can follow the same path. Maybe someone that remembers all the details can enlighten us.

My question is, if you don't have the money to put up for the redevelopment fee's, where are you going to get the money to sue the league. I suspect the first thing the league would do, is cut off all revenue sharing to a team thats suing them. My hope, and this is what I believe, is that the Maloofs are hanging on by a thread. They know it, and the league knows it. The situation is similiar, but not exactly the same, to that of George Shinn, who finally threw in the towel and gave up the team. I watched George Maloof carefully yesterday, and he had the look of a drowning man thrashing about in the water. Anyone that tries to rescue him will probably be pulled down with him. That was the most bizarre press conference I've ever seen.

As far as I can tell, the answer, as it is for most legal questions, is "it depends." The Sherman Antitrust Act outlaws contracts "in restraint of trade" which of course is very vague. Just back in 2010, however, the Supreme Court did rule on an antitrust case involving the NFL, where it found that while the NFL may be a private club as you say, Baja, it is not a "single entity" for antitrust purposes, and thus concerted action on the part of its teams can serve to trigger antitrust liability. That said, courts have applied a more lenient standard for these types of cases, and have in the past accepted such reasons as "maintaining competitive balance" as justifying agreements between teams. After all, if one team decides it wants to play with 6 players on the court, the rest of the league has the right to refuse to play against them, otherwise you can't maintain a basketball league. Of course, the question is whether preventing a team from moving would pass the test. The league might have a case that if it cannot punish owners for failing to negotiate with cities in good faith, cities won't agree anymore on stadium deals and at some point the league won't have anywhere to play its games. I'm not sure, though, if that would hold up in court.

The short of it all is, though, that yes I would think a prolonged antitrust battle with the league would be very expensive for the Maloofs, so I'm not sure why they would even think about it. Such a suit would actually be the next best thing for us, I'd imagine, given that they'd run out of money and have to sell the team at some point (assuming, of course, they don't win, or at least run out of money first).

 

[macadocious]

What it comes down to is does the league have the ability to regulate what its individual owners can do and where they can operate. Much like a McDonalds does for their franchise owners.

The difference comes where if an owner of a McD's is not profitable, they just close up shop. Maloof's can't do that. MLB has an antit-trust exemption that basically allows them to do whatever they want in regards to their teams. NBA does not have that. I don't think this is a battle that the Maloof's can win. But there is a chance, a court could rule that they have the right to move the team where ever they want.

Being that it's Anaheim and within 45 miles of two other franchises does throw a wrench into that, because it affects their competition.

 

[Sactown ExPat]

I'm not an attorney, but if I remember correctly, antitrust laws are there to prevent one business or corporation from monoplizing one area of the business world. Such as one auto manufacturing company using tactics to put all others out of business, and therefore giving consumers little choice but one stop shopping. I know that baseball has an exception that goes back to the stone age. Not sure of all the rules where private clubs are involved, but its been my experience, that when you join a private club, which the NBA is, and you know all the rules when you join, then you have to abide by those rules. No one forced you to join! If you don't like the rules, don't join!

So I'm not sure what legs the Maloofs have to stand on with any kind of antitrust suit. Plus the negatives from such a suit would far outweigh any positives. They would surely alienate all the owners and the comish. It would cost them a fortune in court costs with a suit that could drag on for years and probably end up in the US surpreme court. If the Maloofs have the resources to go that far. We know the league does. Plus, I don't know the terms on the money the Maloofs borrowed from the league, but filing suit against the league might be grounds to call in that debt.

I know wonderful Al Davis went against the NFL in a suit to move the Raiders to LA and won. Different league with different rules, and its been too long ago for me to remember all the details, other than I wanted Davis to get hit by a truck at the time. But, maybe there's a way they can follow the same path. Maybe someone that remembers all the details can enlighten us.

My question is, if you don't have the money to put up for the redevelopment fee's, where are you going to get the money to sue the league. I suspect the first thing the league would do, is cut off all revenue sharing to a team thats suing them. My hope, and this is what I believe, is that the Maloofs are hanging on by a thread. They know it, and the league knows it. The situation is similiar, but not exactly the same, to that of George Shinn, who finally threw in the towel and gave up the team. I watched George Maloof carefully yesterday, and he had the look of a drowning man thrashing about in the water. Anyone that tries to rescue him will probably be pulled down with him. That was the most bizarre press conference I've ever seen.

They have no intention of actually filing site. They are just invoking the nuclear option in an attempt to scare Stern/NBA into buying them out. They obviously need a price well above market value, and they are trying to bluff the NBA into giving it to them. This is just terrible PR on the back of last summer's shenanigans, and the Maloofs know exactly what they are doing. They must be on the brink to pull this kind of move in public. I think this will all be resolved by this summer.

 

[The Hammer]

Top post JB. I hope your right in everything you've said. Sterns last mark can be keeping the kings in sacto somehow by ridding us of the malooofs

I think Stern playing some kind of hero role in sticking up for the little guy is exactly what he thinks his legacy could use. Would erase many earlier negatives. Going out with that big win would make him look great. I don't think he steps down before this is resolved, since he has become personally involved, because on the contrary, that would make him look pretty bad -- even if it resolves well for Sac -- would still be perceived as leaving the job half done.

 

[JB_kings]

And the funny thing about those two other teams, one of them for sure can show actual revenue damage to their franchise. The Lakers mind boggling TV contract has clauses about a new NBA team coming into their market and eating into their viewership. So by the team moving into Anaheim (same media market), the Lakers total contract is worth about 10 percent less. So at about 150 million per a year, they lose 15 million. It's a 20 year contract, so the damages could total at least 300 million dollars. This is just one part of the damages they can claim. Who knows about what the Clippers will be able to claim. So these antitrust lawyers are going to be fighting the NBA on one side and the Lakers and Clippers lawyers on the other side. And throw in a possible lawsuit from the City of Sacramento over the breaking of the Arco lease... well it might take every penny the Maloofs have left and a good chunk of Samueli's as well if he is the Wizard behind the Maloof curtain.