Kings' loan a ‘major league' headache for Sacramento

[Mike0476]

"That's a very big risk," Stanford's Noll said. "In most cases it's much better to be a monopolist in a market with 3 million people."


The Maloofs face one other risk in coming here: losing control of the team. They are walking away from an arena they own to become a tenant in the house that hockey built.


And just in case there is any doubt about who is in charge, the venue contract between Samueli, who controls Honda Center, and "TeamCo," the pseudonym for the Kings, spells out the terms in all capital letters.


In return for a $50 million loan to move here, the obligation to repay that loan is "absolute and unconditional."


Among the events that will not and cannot excuse the Kings from repaying that $50 million: their own bankruptcy and the destruction of Honda Center.

http://www.ocregister.com/news/kings-295325-million-team.html

 

[Hoovtrain]

"That's a very big risk," Stanford's Noll said. "In most cases it's much better to be a monopolist in a market with 3 million people."


The Maloofs face one other risk in coming here: losing control of the team. They are walking away from an arena they own to become a tenant in the house that hockey built.


And just in case there is any doubt about who is in charge, the venue contract between Samueli, who controls Honda Center, and "TeamCo," the pseudonym for the Kings, spells out the terms in all capital letters.


In return for a $50 million loan to move here, the obligation to repay that loan is "absolute and unconditional."


Among the events that will not and cannot excuse the Kings from repaying that $50 million: their own bankruptcy and the destruction of Honda Center.

http://www.ocregister.com/news/kings-295325-million-team.html

Why is this a major league headache for sacramento? Seems like more of a headache for the maloofs.

 

[Capt. Factorial]

Why is this a major league headache for sacramento? Seems like more of a headache for the maloofs.

Yeah, and a major league headache to Anaheim. (Edit: meaning as far as their chances of landing the team go, I mean. Stronger terms, Maloofs less likely to sign. That seemed more obvious to me when I was bleary-eyed than now.)

"Absolute and unconditional", including bankruptcy and the destruction of the venue? Gee, kind of makes Sacramento's efforts to get their repayment look reasonable.

 

[John Galt]

Anaheim to the press: "Sacramento has no basis to think the Maloofs will stiff them."
Aneheim to thier legal dept: "Make sure they don't stiff us too."

 

[macadocious]

Among the events that will not and cannot excuse the Kings from repaying that $50 million: their own bankruptcy and the destruction of Honda Center.

If they file bankruptcy, the loan is done. They can write stuff like that in all they want, but if there is no money, there is no money. Now they can ask for it to be senior secured debt, so they are first in line of repayment, they could even ask the Maloof's to personally guarantee it. But full BK would wipe it clean.

 

[ArcoKings]

The more I learn about new risks regarding the relocation the less I think the move will happen. Go Kings!

 

[cfechter]

anaheim to the press: "sacramento has no basis to think the maloofs will stiff them."
aneheim to thier legal dept: "make sure they don't stiff us too."

lol

 

[twosomeca]

Has there been any question that it seems like the Maloofs are trying to force this issue? That's what it has looked like all along, and even with all the negatives of this potential deal, there they are trying to force it anyway. This is the problem with bad owners, and it is too bad a whole city has to get screwed because of it.

 

[Löwenherz]

Has there been any question that it seems like the Maloofs are trying to force this issue? That's what it has looked like all along, and even with all the negatives of this potential deal, there they are trying to force it anyway. This is the problem with bad owners, and it is too bad a whole city has to get screwed because of it.

It does seem as though the Maloofs decided this was a good deal a while ago and are now either excusing or outright ignoring evidence to the contrary.

I really see shades of LeBron's "Decision" ... with Stern in place of James' "handlers" smiling and nodding enthusiastically in the backround.

 

[The Hammer]

Has there been any question that it seems like the Maloofs are trying to force this issue? That's what it has looked like all along, and even with all the negatives of this potential deal, there they are trying to force it anyway. This is the problem with bad owners, and it is too bad a whole city has to get screwed because of it.

You're talking as if it's happened. It hasn't. Again, from one point of view, this is the IDEAL way to light a fire under Sacramento to get an arena done. It makes a lot of sense from that point of view. But, it's only a real motivator because it's actually possible that they move, which it is. The Maloofs are just increasing their leverage. Which they can lever in either direction.

 

[Trueblood]

If they file bankruptcy, the loan is done. They can write stuff like that in all they want, but if there is no money, there is no money. Now they can ask for it to be senior secured debt, so they are first in line of repayment, they could even ask the Maloof's to personally guarantee it. But full BK would wipe it clean.

I wonder if Samueli is covering his tracks meaning can he claim that he has full ownership of the team in the event that they file for bankruptcy as sort of a collateral for the loan? If so, that would be wise on his part. If not, he is taking a serious risk by loaning that money since the Maloofs seem to be on the verge of bankruptcy.

 

[JB_kings]

I wonder if Samueli is covering his tracks meaning can he claim that he has full ownership of the team in the event that they file for bankruptcy as sort of a collateral for the loan? If so, that would be wise on his part. If not, he is taking a serious risk by loaning that money since the Maloofs seem to be on the verge of bankruptcy.

I think he knows exactly what his plan is and he's hoping the Maloofs go bankrupt. Then he can probably buy the team by paying off the team related debt to the NBA and anyone else they owe. He can probably buy the team for far less than if he went out and tried to purchase one outright. He's smart and the Maloofs are gambling fools. Their best bet was probably to tread water in Sacramento and work the city for a new facility that they had complete control over. Then wait out the new CBA and start rebuilding their empire with smart and safe investment decisons.

 

[twosomeca]

You're talking as if it's happened. It hasn't. Again, from one point of view, this is the IDEAL way to light a fire under Sacramento to get an arena done. It makes a lot of sense from that point of view. But, it's only a real motivator because it's actually possible that they move, which it is. The Maloofs are just increasing their leverage. Which they can lever in either direction.

Not what I am trying to say. I do think that the Maloofs have their minds made up, however.

 

[kennadog]

The Maloofs are playing with one of the really big boys. I think Samueli ends up owning majority interest in the team in the near future.

 

[Gary]

Not what I am trying to say. I do think that the Maloofs have their minds made up, however.

Same.. I think they did last year when they came out and said they weren't moving the team. I think they were already in secret talks about this. It seemed funny that they would blurt out that they were not moving the team when there really wasn't that much talk about them actually moving the team. Seemed odd to me then, and odd to me now, but my suspicions were validated when the whole Anaheim thing happened.

 

[twosomeca]

Same.. I think they did last year when they came out and said they weren't moving the team. I think they were already in secret talks about this. It seemed funny that they would blurt out that they were not moving the team when there really wasn't that much talk about them actually moving the team. Seemed odd to me then, and odd to me now, but my suspicions were validated when the whole Anaheim thing happened.

Good point. When I hear "public people" speak, I always re-run their words in the opposite. Example: "we are not interested in moving the team". Re-run that: "we are interested in moving the team". Granted, timing is everything, but which is more believable? Politicians are guilty of this all the time. So, your suspicion was likely dead on correct at the time. It's called, LYING BASTARDS. ha.

 

[kennadog]

Good point. When I hear "public people" speak, I always re-run their words in the opposite. Example: "we are not interested in moving the team". Re-run that: "we are interested in moving the team". Granted, timing is everything, but which is more believable? Politicians are guilty of this all the time. So, your suspicion was likely dead on correct at the time. It's called, LYING BASTARDS. ha.

Hardly limited to "public people." I find that honesty is not a much valued trait in the US anymore. I was told that I was "too honest" once. Funny, I thought you were either honest or not. I didn't know there were degrees.

(I don't believe in telling a truth or my version of the truth, if the result would be to hurt someone and help no one, though.)