Hansen, Seattle Council reach deal on financing new sports arena

[Sac.1989]

Dam hope so however i cant help but feel the writing is on the wall here. The feel good factor of a nba return to seattle coupled with our lack of movement foward regarding our situation means that if a relocation is pushed for i do feel the board would be more inclined to pass.

Make no mistake, if Seattle approves this they will take a hard run at us and if that happens well i fear the worst.

 

[Warhawk]

If I had to guess, the Sacramento Kings will still be the Sacramento Kings.

Agreed.

 

[Section 101]

And you know all this how? What preytell do you accomplish by solving a problem or mess as you call it in Seattle, while at the same time creating the exact same mess in Sacramento. Thats sort of like borrowing from Peter to pay Paul. Why would Seattle's mess take precedent over Sacramento's mess. Both scenario's are almost exactly the same. The difference is, the city of Sacramento actually came up with a plan for a new arena, whereas Seattle didn't.

There are also many fans in Seattle who do not want to steal a team from another city.

 

[VF21]

Dam hope so however i cant help but feel the writing is on the wall here. The feel good factor of a nba return to seattle coupled with our lack of movement foward regarding our situation means that if a relocation is pushed for i do feel the board would be more inclined to pass.

Make no mistake, if Seattle approves this they will take a hard run at us and if that happens well i fear the worst.

They can also "take a hard run" at a couple of the franchises that are nowhere near successful, have trouble getting enough attendance to outnumber the employees, etc. The Kings may be the obvious target, but they're arguably not the only low-hanging fruit.

 

[sidney]

And you know all this how? What preytell do you accomplish by solving a problem or mess as you call it in Seattle, while at the same time creating the exact same mess in Sacramento. Thats sort of like borrowing from Peter to pay Paul. Why would Seattle's mess take precedent over Sacramento's mess. Both scenario's are almost exactly the same. The difference is, the city of Sacramento actually came up with a plan for a new arena, whereas Seattle didn't.

I don't see how the Maloofs can continue as owners and either move it or stay. Nothing is going to pencil out. So if that option is off the table, then they ARE selling.

I'm sure the NBA's best case scenario is the Maloofs selling to someone who then takes the Sac arena deal and runs with it.

If that isn't possible I can see them viewing the Seattle deal being somewhat positive for the NBA.

 

[bajaden]

Dam hope so however i cant help but feel the writing is on the wall here. The feel good factor of a nba return to seattle coupled with our lack of movement foward regarding our situation means that if a relocation is pushed for i do feel the board would be more inclined to pass.

Make no mistake, if Seattle approves this they will take a hard run at us and if that happens well i fear the worst.

Once again, why does the feel good factor for Seattle outweigh the negativity that moving the team out of sacramento creates? What makes Seattle more deserving of an NBA team than Sacramento? Sacramento came up with an arena deal, and the fans have always supported the team. Its the Maloofs that screwed everything up. So why would the league reward those idiots? Letting the Kings move would be a huge PR blackeye for the league, especially since the league had a hand in putting the deal together.

I realize that Hansen has big bucks and he's partnered with other wealthy folks. But why does everyone think that money is no object to wealthy people. Just how in the hell do you think they got wealthy? Not by throwing away money when they don't have to. Most feel that the Kings are overpriced at 300 million. Susposedly the Maloofs turned down 400 million. Thats been denied by the way, by people in the know. The point is, buying the Kings is going to be a lot more expensive for someone that wants to move them out of sacramento. And, in the end, they need the league to approve the move.

If and when the Maloofs take an active role in trying to sell the team, your going to see several wealthy people from the sacramento area get involved, and they'll have a distinct advantage over Hansen and his pals. They won't have to pay the relocation fee, and they won't have to put up as much money as Hansen has invested in the arena deal in Seattle. Plus they can just assume the loan to the city instead of having to pay it off immediately. Perhaps they can work out a deal with the league and the Maloof's on the money owed to the league where both parties bend a little just to get the Maloofs out of the league.

But until the Maloofs actually say they're open to bids, not much is going to happen. This isn't going to be a sneak out of town in the dark of night type thing. They can't secretly sell the team without the league's permission. Unless they want to go to court, which could take years. I still think the city has the upper hand in this situation.

 

[bajaden]

They can also "take a hard run" at a couple of the franchises that are nowhere near successful, have trouble getting enough attendance to outnumber the employees, etc. The Kings may be the obvious target, but they're arguably not the only low-hanging fruit.

I could see Hansen and company going after the Hawks. Atlanta has never supported that team. I've lost count of how many games I've watched on TV being played in Atlanta where it appears that there's no one in the arena. The Bobcats are another franchise thats ripe for the picking (Sorry Michael). I still wouldn't rule out expansion. Maybe not right now, but in the forseeable future. I know what Stern said, but he's entitled to change his mind, and when you have wealthy buyers with no product to buy, it might be time to supply one.

I think part of Sterns refusal to expand, had to do with his wanting to expand to europe and other countries. However, with the current state of the economy here, and in the rest of the world, expansion here makes a lot more sense.

 

[Warhawk]

I don't see how the Maloofs can continue as owners and either move it or stay. Nothing is going to pencil out. So if that option is off the table, then they ARE selling.

I'm sure the NBA's best case scenario is the Maloofs selling to someone who then takes the Sac arena deal and runs with it.

If that isn't possible I can see them viewing the Seattle deal being somewhat positive for the NBA.

True, and the thing is, the City did EVERYTHING and MORE the NBA wanted to get an arena done in Sacramento. Bring in $10 million in income that MSE didn't even try for? Yup. Work with the NBA on an arena deal? Yup. Get a financing plan organized? Yup. Get the City Council to approve of it? Yup.

And then MSE backs out. The NBA offices know the score, as do the other owners.

The deal is likely still there with new owners for a reason. Everyone wants the Maloofs out. And then things can start moving forward again.

 

[HereWeBoogie]

well while all this is going on, Joe Maloof is tweeting about his more important business venture. Zing Vodka

 

[JB_kings]

Once again, why does the feel good factor for Seattle outweigh the negativity that moving the team out of sacramento creates? What makes Seattle more deserving of an NBA team than Sacramento? Sacramento came up with an arena deal, and the fans have always supported the team. Its the Maloofs that screwed everything up. So why would the league reward those idiots? Letting the Kings move would be a huge PR blackeye for the league, especially since the league had a hand in putting the deal together.

I realize that Hansen has big bucks and he's partnered with other wealthy folks. But why does everyone think that money is no object to wealthy people. Just how in the hell do you think they got wealthy? Not by throwing away money when they don't have to. Most feel that the Kings are overpriced at 300 million. Susposedly the Maloofs turned down 400 million. Thats been denied by the way, by people in the know. The point is, buying the Kings is going to be a lot more expensive for someone that wants to move them out of sacramento. And, in the end, they need the league to approve the move.

If and when the Maloofs take an active role in trying to sell the team, your going to see several wealthy people from the sacramento area get involved, and they'll have a distinct advantage over Hansen and his pals. They won't have to pay the relocation fee, and they won't have to put up as much money as Hansen has invested in the arena deal in Seattle. Plus they can just assume the loan to the city instead of having to pay it off immediately. Perhaps they can work out a deal with the league and the Maloof's on the money owed to the league where both parties bend a little just to get the Maloofs out of the league.

But until the Maloofs actually say they're open to bids, not much is going to happen. This isn't going to be a sneak out of town in the dark of night type thing. They can't secretly sell the team without the league's permission. Unless they want to go to court, which could take years. I still think the city has the upper hand in this situation.

This has been my thinking on this. I know Seattle and Hansen's group is a real and very motivated threat to buy a team. But the Kings are in a very unique situation and buying them to move is VERY costly due to the debt incurred. There could be other teams on the block cheaper and easier to relocate. We are used to the barrage of Maloof media leaks, not every owner operates in this fashion. So if there is another team for sale in a weak market, they will likely be less expensive to purchase than the Kings.

I hope there are a couple of potential buyers who would step in and buy the team and accept the arena deal as negotiated. But as far as I've heard, we are still in the stalemate phase of this process. Which means the Maloofs are sitting on the team and forced into staying in Arco until they are ready to break the stalemate by selling. I think Stern has been very careful about boxing them in and he isn't likely to take the easy way out of this one. He's fed up alright, but fed up with dealing with these bozo owners. Stern is also in no hurry to right a wrong in Seattle. Seattle pissed Stern off and he has a long memory. Yes he would love to put a team back there and Seattle has their hat in hand and is coming back begging. But he will not be in a hurry or create another problem just to get a team back in Seattle. The northwest is just going to have to be patient for a while.

 

[JB_kings]

Read a tweet from Rob McAllister the other day. He mentioned something I had never heard:

if Hansen will put up $450mil for team I think the Kings are his. Though George was hoping for $600m with move to Anaheim.

This lines up with what many thought that the Kings would be sold to Samueli after moving to Anaheim. And if this is legit, then I can't help but think that George's real plan is to give Anaheim another shot next March. It would be a long shot, but probably worth throwing every dirty trick in the book to see if it has a shot.

I know there is some chance for George to buy back up to 20% of the Palms. No idea on the terms and conditions. But if there are tea leaves to be read, all the Maloof naming was removed from the properties. Was that more than just branding or a sign that the terms and conditions were not met for the buy back?

 

[Trueblood]

Read a tweet from Rob McAllister the other day. He mentioned something I had never heard:



This lines up with what many thought that the Kings would be sold to Samueli after moving to Anaheim. And if this is legit, then I can't help but think that George's real plan is to give Anaheim another shot next March. It would be a long shot, but probably worth throwing every dirty trick in the book to see if it has a shot.

I know there is some chance for George to buy back up to 20% of the Palms. No idea on the terms and conditions. But if there are tea leaves to be read, all the Maloof naming was removed from the properties. Was that more than just branding or a sign that the terms and conditions were not met for the buy back?

I don't see how he thought he could get $600 million from Anaheim. Seattle is a better and more lucrative market than a 3rd wheel team in LA market.

People forget, the whole reason why we even throw around $150 and $200 million relocation numbers is because of Anaheim. The Lakers lose $15 million a year if someone moves to OC so that's why the number gets trumped up. The extra $100 mil or so would get divided up by the Lakers and Clippers while the rest of the league would split the normal $30 million. All the more reason why someone would pay less for a team in Anaheim, not more.

 

[Trueblood]

I could see Hansen and company going after the Hawks. Atlanta has never supported that team. I've lost count of how many games I've watched on TV being played in Atlanta where it appears that there's no one in the arena. The Bobcats are another franchise thats ripe for the picking (Sorry Michael). I still wouldn't rule out expansion. Maybe not right now, but in the forseeable future. I know what Stern said, but he's entitled to change his mind, and when you have wealthy buyers with no product to buy, it might be time to supply one.

I think part of Sterns refusal to expand, had to do with his wanting to expand to europe and other countries. However, with the current state of the economy here, and in the rest of the world, expansion here makes a lot more sense.

The Hawks are for sale but I don't see them moving. They have heavy relocation penalties, a great arena and Atlanta is home to TNT. The crowds have even picked up in recent years. They're usually around 8th or 9th worst now as opposed to being at the bottom.

Charlotte is another big penalty team although if Hansen is willing to pay the penalty, they could be had. It wouldn't be such a black eye to the league since they don't have much history in the city but they have MJ and a great arena. The league may also want to make things work since they've already lost a team once. It's probably too early for them.

Also, Charlotte's relocation penalty numbers get lopped on top of the sale price for the team. MJ wouldn't have to pick that up. With the Maloofs, they're the ones responsible for the debt to the league and city so that gets subtracted from a hypothetical King sale price. That makes the Kings a better option to Hansen over Charlotte.

OTOH, Milwaukee is a team that could wind up making the most sense in the long run if he can work out a deal before the MOU runs out. Their building is as old as Arco/PBP and this is their last shot at getting an arena deal done. Unlike the Maloofs, Kohl wants to get this done but if he can't do it then nobody can and Hansen will have a team that is free of debt and ridiculous relo penalties.

 

[Capt. Factorial]

Also, Charlotte's relocation penalty numbers get lopped on top of the sale price for the team. MJ wouldn't have to pick that up. With the Maloofs, they're the ones responsible for the debt to the league and city so that gets subtracted from a hypothetical King sale price. That makes the Kings a better option to Hansen over Charlotte.

I think you've got that wrong. The team is responsible for the city loan and the NBA debt, not the Maloofs themselves. Which makes the money fall onto the buyer, just like relocation penalties.

 

[Trueblood]

I think you've got that wrong. The team is responsible for the city loan and the NBA debt, not the Maloofs themselves. Which makes the money fall onto the buyer, just like relocation penalties.

Oh ok, my bad. But that would still mean that a local buyer has to cover the NBA debt even if the city loan gets rolled into the arena deal.

I guess I'm just pessimistic about someone local buying and out bidding some of the high rollers out there. I'd love to see it though. I really wonder what the timeline is for the Bucks? If they were to put something on the ballot within a year or so and it got rejected, I'm curious as to whether or not Kohl would throw in the towel and be willing to sell to Hansen.

 

[Section 101]

Oh ok, my bad. But that would still mean that a local buyer has to cover the NBA debt even if the city loan gets rolled into the arena deal.

I guess I'm just pessimistic about someone local buying and out bidding some of the high rollers out there. I'd love to see it though. I really wonder what the timeline is for the Bucks? If they were to put something on the ballot within a year or so and it got rejected, I'm curious as to whether or not Kohl would throw in the towel and be willing to sell to Hansen.

They assume the debt. It's not like they have to pay it off when they buy the team unless the league has some clause that the debt become due. Now the City debt does become due with a penalty if the team moves.

I'm still curious what they spent the NBA loan money on since it wasn't the arena or the team.

 

[Kingsfan23]

I think Sacramento has to return to the table with the Maloofs...

It's my personal opinion, although I have no idea, is that Maloofs weren't necessarily trying to squash that last deal as much as there were elements to the deal that just weren't feasbile for them.. If that is the case, although unpalatable to the city, can the city try to accomodate the Maloofs concerns, or are we just going to watch Arco crumble and other cities take shots at the Kings while we hope the Maloofs sell to the right people? I guess we'll see.

 

[Warhawk]

I think Sacramento has to return to the table with the Maloofs...

It's my personal opinion, although I have no idea, is that Maloofs weren't necessarily trying to squash that last deal as much as there were elements to the deal that just weren't feasbile for them.. If that is the case, although unpalatable to the city, can the city try to accomodate the Maloofs concerns, or are we just going to watch Arco crumble and other cities take shots at the Kings while we hope the Maloofs sell to the right people? I guess we'll see.

They have quashed EVERY deal put forth so far, basically anything that isn't a free arena where they control all the income isn't good enough. And that isn't reasonable.

The NBA negotiated the latest deal on their behalf. And they said it was fair. They also were going to loan them most of the money and gift them the rest!

Nope, the deal was fair and negotiated in good faith. No changing terms now. Let them rot for a while and come crawling back later when they still don't have any options and ARCO is costing more and more to maintain. They are out of options and know it.

 

[HndsmCelt]

I don't see the Maloofs being able o make a deal here. IF a hugely over the top offer were made the NBA/Owners are still in the way of a move. After all the effort to keep the Kings in Sac, and effort the fans put into it ought to make approving a move tough. Also I still suspect there is some discussion of expansion going on given recent statements about the number of cities/buyers looking at teams.

 

[Kingsfan23]

They have quashed EVERY deal put forth so far, basically anything that isn't a free arena where they control all the income isn't good enough. And that isn't reasonable.

The NBA negotiated the latest deal on their behalf. And they said it was fair. They also were going to loan them most of the money and gift them the rest!

Nope, the deal was fair and negotiated in good faith. No changing terms now. Let them rot for a while and come crawling back later when they still don't have any options and ARCO is costing more and more to maintain. They are out of options and know it.

The NBA negotiated a deal that the Maloofs recieved very shortly before the all-star break, and the Maloofs communicated concerns with the NBA during the entire time.

The deal monetarily is very fair economically, but what if there are elements to the deal that are untenable to the Maloofs. What if it's not necessarily a choice for them to reject this deal but rather they can't leverage themselves to do this deal.

I'm just being practical. To me, at this point, it seems as likely, that the Kings are going to be gone as it is the Maloofs are going to be forced into this deal they dont want or will sell the team to owners interested in keeping the team here.

And once the team is gone, working with the Maloofs a little more is going to look like a sweet deal in terms of getting an arena built

 

[Section 101]

The NBA negotiated a deal that the Maloofs recieved very shortly before the all-star break, and the Maloofs communicated concerns with the NBA during the entire time.

The deal monetarily is very fair economically, but what if there are elements to the deal that are untenable to the Maloofs. What if it's not necessarily a choice for them to reject this deal but rather they can't leverage themselves to do this deal.

I'm just being practical. To me, at this point, it seems as likely, that the Kings are going to be gone as it is the Maloofs are going to be forced into this deal they dont want or will sell the team to owners interested in keeping the team here.

And once the team is gone, working with the Maloofs a little more is going to look like a sweet deal in terms of getting an arena built

That's the point. They can't afford any deal where they have to either put up money or take on more debt. They need to sell to someone who can afford a team. The maloofs will be gone not the team.

 

[Kingsfan23]

That's the point. They can't afford any deal where they have to either put up money or take on more debt. They need to sell to someone who can afford a team. The maloofs will be gone not the team.

Agreed, that is what we all hope for, new owners interested in keeping the team here. I'll withdraw from this issue since most disagree, and I'm not terribly educated on it

 

[Warhawk]

Agreed, that is what we all hope for, new owners interested in keeping the team here. I'll withdraw from this issue since most disagree, and I'm not terribly educated on it

That is the reason we are trying to help you understand.

The Maloofs are effectively in a corner here of their own making. While they may have disagreed on some aspects of the deal, no deal is "perfect" and their disagreements are overwhelmingly viewed as way "over the top" demands for negotiating a deal like this.

 

[Mike0476]

The NBA negotiated a deal that the Maloofs recieved very shortly before the all-star break, and the Maloofs communicated concerns with the NBA during the entire time.

Perhaps you did not read this article:

SACRAMENTO KINGS - City, NBA, developer today start detailed arena talks in Dallas
Sacramento Bee, The (CA) - Wednesday, October 5, 2011
Author: Ryan Lillis and Dale Kasler ; rlillis@sacbee.com

Sacramento's arena talks kick off today, as officials with the city, the NBA, development group ICON/Taylor and arena operator Anschutz Entertainment Group meet in Dallas to discuss the particulars of how to build a new sports facility in the downtown railyard.

One party that won't be included in today's talks is the Sacramento Kings, who would likely be tenants in the new facility.

"We've decided to let the NBA take the lead on this, but we are in very close contact with the league and are briefed regularly when new updates are available," said team spokesman Chris Clark.

Kings co-owner George Maloof , asked about the Dallas meeting, said, "We weren't invited."

 

[bajaden]

The NBA negotiated a deal that the Maloofs recieved very shortly before the all-star break, and the Maloofs communicated concerns with the NBA during the entire time.

The deal monetarily is very fair economically, but what if there are elements to the deal that are untenable to the Maloofs. What if it's not necessarily a choice for them to reject this deal but rather they can't leverage themselves to do this deal.

I'm just being practical. To me, at this point, it seems as likely, that the Kings are going to be gone as it is the Maloofs are going to be forced into this deal they dont want or will sell the team to owners interested in keeping the team here.

And once the team is gone, working with the Maloofs a little more is going to look like a sweet deal in terms of getting an arena built

You have the first part wrong. The city of sacramento and the league both deny that the Maloofs registered any significant concerns about the deal until after they had already agreed to the deal. Were you paying any attention at all to what was happening while the negotiations were going on. All you had to do was watch George at the press conference going insane, and thats all you need to know. The Maloofs agreed to the deal, and then backed out.

Now they may have had legitimate reasons for backing out, but they wern't honest about it. If the deal was untenable, then they should have said upfront, that there was no way they could participate in the deal. There's nothing more that the city could do. They're putting up most of the money for that arena. The league was willing to pay the start up money required by the Maloofs. All of the items the Maloofs brought up after they had already agreed to the deal, were things they damm well knew the city couldn't agree to.

 

[kennadog]

Minor point, but anyone who moves the team will owe $76 million to the city. $67 million in principal and a $9 million dollar prepayment penalty. Anyone who keeps the tea here doesn't have to do either. A new arena means paying off the old debt with a penalty, too, but the city could consider re-financing the loan at what would likely be a lower interest rate and re-amortized to bring the annual payments down.

The Maloofs had a problem with providing collateral. That's because they don't have it. Note that Hansen is personally guaranteeing repayment of what will be Seattle-issued bonds. Their checking his financials as we speak, to make sure the guarantee is solid. Samueli has personally guaranteed repayment of the Anaheim bonds. I doubt the Maloofs are willing to personally guarantee repayment of anything. I doubt whether they could even pay off the city, if they were allowed to move the team, no matter what they say.

As to what the was done with the money the city loaned in 1997? The team was swimming is red ink, which was not sustainable. Thomas said he was going to have to sell the team. The loan was to put the team back in the black to keep the team here in Sacramento. Without the loan, we might have lost the team before 2000 and all this would be moot. Yep, Mayor Phil Serna did save the day for Kings fans. We might never have had those great years at all or not in Sacramento anyway.

 

[Kingsfan23]

You have the first part wrong. The city of sacramento and the league both deny that the Maloofs registered any significant concerns about the deal until after they had already agreed to the deal. Were you paying any attention at all to what was happening while the negotiations were going on. All you had to do was watch George at the press conference going insane, and thats all you need to know. The Maloofs agreed to the deal, and then backed out.

Now they may have had legitimate reasons for backing out, but they wern't honest about it. If the deal was untenable, then they should have said upfront, that there was no way they could participate in the deal. There's nothing more that the city could do. They're putting up most of the money for that arena. The league was willing to pay the start up money required by the Maloofs. All of the items the Maloofs brought up after they had already agreed to the deal, were things they damm well knew the city couldn't agree to.

You might be right. I thought that the Maloofs had provided emails or letters that they had voicing their concerns to the NBA on a consistent basis, but maybe that communication was after the non-binding agreement had taken place

As Kenna said, I think that the collateral issue is there. If the Maloofs can not provide it, is there a way to work around this (economics is not my deal)

 

[butteredbiscuit]

Question is where can an owner build an arena in ton without the city not owning the place like the railyard?

 

[Trueblood]

Question is where can an owner build an arena in ton without the city not owning the place like the railyard?

It all depends on how wealthy they are and how much they are willing to put up. I'm sure that if someone were willing to foot the entire bill of a new arena, the city would have no problem letting them put it wherever they wanted. Railyards included.

 

[JB_kings]

The original '97 loan paid off the construction loans Lukenbill's group took out to build Arco 1 & 2. They were very high interest rate loans. The line of credit the Kings took from the NBA is another matter. I guess we can say that they probably used it to pay team salary. But I don't think it's a wild assumption that some or most of the credit was put towards the Palms. As far as I know, there were no restrictions on what they could use it for.