Kings not forthcoming about “donation” of Natomas arena for Coronavirus hospital

jcassio

jcassio

Starter
On April 3 a Sacramento Kings press release announced that the Natomas arena would be used as a hospital to help with the Coronavirus pandemic:

Today, the California Governor’s Office of Emergency Services announced plans for the California Department of Public Health, in collaboration with the U.S. Army Corps of Engineers, to convert the Natomas arena and practice facility into a surge field hospital to provide critical medical services for coronavirus and trauma care patients.

https://www.nba.com/kings/news/sacr...rge-hospital-and-250000-donation-support-area

The press release goes on to say what “additional contributions” the Kings are making:

To further assist the state and city in its fight against the coronavirus, the Sacramento Kings are making additional contributions, including donating $250,000 to support area community organizations providing essential services and supplies to families and individuals in need, and the donation of 100,000 medical masks to state and local health agencies.

So yay for the Kings, right? Very community minded of them. Except yesterday (April 24) a SacBee article revealed that the State of California is paying the Kings up to $3 million to use the arena for three months (or $500k per month plus utilities).

https://www.sacbee.com/sports/nba/sacramento-kings/article242265671.html

Not a good look for the Kings.

If they had been up front about the transaction, no big deal. Easily defendable. But with the April 3 spin about all that the Kings were doing for the community, and no mention of the arena’s rental cost, this really looks like someone got caught with their pants down. As a Kings fan, I’m embarrassed.

The SacBee article said that on April 3, Matina Kolokotronis, chief operating officer of the Kings, said Vivek Ranadivé, her boss, had called her and said, "What about offering the arena? He asked how we could use our platform to do good.”

So did Kolokotronis not know that they were "renting" the arena for a substantial amount of money? Of course she knew that! It was just inconvenient at that time for her to be honest about what the Kings were donating.

Again, just not a good look for the Kings.

Lost in all this dishonesty is the fact that the Kings are donating the use of their practice facility and making other donations through the Kings’ charitable foundation.
 
SHAME ON YOU MATINA AND VIVEK!!

so instead of being a community source of charity and help for the pandemic
it turns out you are one more greedy company trying to make money from it

It makes me so sad to see our beloved Kings organization take money from the state
OES that could be used to really help our state in this time of need

Hey Kings , its an easy fix , if you can not stop the rental income, then the funds need to be donated
back to the cause and every dime needs to be used to help state and local charities that provide
help to virus victims

Im sorry I have no sympathy for Millionaire and Billionaire owners of the Kings
So players who earn 20 Million a year are getting a salary cut of 25% Awwww to fricking bad

This rent money is chump change to these people

I feel bad for those gals that sell me beer at the game that are out of work and cant pay their rent!
I feel bad for players like Kyle Guy that can barely make ends meet?
I hope he does not loose any of his small salary
 
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When the state uses the state of emergency to commandeer private property they pay fair market for the use. So when they commandeered hotels to put homeless in the state is paying for their rooms at fair market value.

The state is paying for Arena's use as COVID19 medical center. They donated the use of the practice facility.
 
From the article (which is posted in its entirety in the Kings News Link forum)

Brian Ferguson, a spokesman for Cal OES, said Friday there was no intent to deceive the public about the contract between the Kings and the state.

The arrangement with the Kings “is consistent with what’s being done at the other sites,” Ferguson said. “We are paying a consistent rate at all the alternative (hospital) sites.” He added that the Kings have made available the team’s old practice facility, a separate building next to Sleep Train, at no charge.
Click to expand...
 
Yeah, color me puzzled why anybody is upset about this. Much ado about nothing, IMO. They've done nothing wrong or not inline with others.
 
KingsFanSince85 said:
Yeah, color me puzzled why anybody is upset about this. Much ado about nothing, IMO. They've done nothing wrong or not inline with others.
Click to expand...
As I said in my post, renting out the arena is easily defensible. But for the Kings to spin this to make it look like it was all one big donation "to do good" is where it looks bad. If the spin doesn't bother you, more power to you. I just expect a bit more honesty from the businesses and charities that I choose to support.
And, yes, I agree with VF that the Bee's article sucks (as they so often do). They are clearly not trying to be fair, but rather to be dramatic. But it was probably the interview with MK that set up this article, like throwing red meat to a hungry wolf.
 
Section 101 said:
When the state uses the state of emergency to commandeer private property they pay fair market for the use. So when they commandeered hotels to put homeless in the state is paying for their rooms at fair market value.

The state is paying for Arena's use as COVID19 medical center. They donated the use of the practice facility.
Click to expand...

I didn't see anything about the State Commandeering the Arena. If the State came in and told Kings "We are taking the Sleep Train Arena , you have no choice in the matter", then yes the state would have to pay the Kings FMV for the Rent. Vivek offered the Arena for the state to use and Gavin took him up on the offer then had a big Photo shoot for the Media. (Which BTW was Apr 6, the contract with the state was signed Apr 7)

So if the Kings donated the use of the Practice facility , then why couldn't the Kings donate the use of the Sleep Train arena?
 
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pdxKingsFan said:
If you give a non-profit entity a product or service at a discount, the discounted amount counts as a donation. Even if funds are exchanged.

Why is that even controversial?
Click to expand...

If a company rents its property at less than FMV (Which OES was supposedly paying FMV) there is no donation under tax law
since the donated rent would have been Income to the owner if it was collected. If a company donates it's Inventory (product) it could only donate
the cost of the inventory it paid for. If a Plumber donates his time to a charity, it can not claim a donation , again just like Rent he would have to claim the Income he would charge for the services before he could claim a deduction

Also Sleep Train has not had any Buyers or offers to lease so the money is more of a Gift from the State to Vivek and the owners
If there was a potential offer to rent Sleep Train for 3-6 months for up to 3 mil Kings would have taken it Long Ago.
Sacramento Zoo was hoping for a donation so they could relocate the Zoo. Kaiser didn't move forward on a potential purchase and
conversion of Sleep Train to Medical Offices.

Bottom line - Vivek and the Owners get 1.5M to 3M for short Term rent when they had -0- before vs. making a donation
The dollars also dwarf the $250,000 in Donations and Masks

Yes I'm indignant about the rent money- my confusion lies in why nobody else here is
 
The right thing to do, IMO. Mind you, I would have been fine with the Kings charging for rent had they been clear and honest from the get-go about what they were donating and what they were making money on. But for some unknown freaking reason, they weren't. They poked themselves in the eye, and it was all so unnecessary.
 
Sorta proves my point earlier in the thread, the rent money was not required to be paid, Vivek could have provided the arena
at no charge just like they are doing now, just had to amend the lease agreement

How many patients actually used the arena for that 1 Million dollars?

They could have decided to use the 1 million to keep the full time employee's working for another month or two?

but MLB players with 50 million dollar contracts can complain about playing for less?

It time for the million dollar players and billionaire owners to step up and help the employees hurt the most
 
Jkbiker said:
Sorta proves my point earlier in the thread, the rent money was not required to be paid, Vivek could have provided the arena
at no charge just like they are doing now, just had to amend the lease agreement

How many patients actually used the arena for that 1 Million dollars?

They could have decided to use the 1 million to keep the full time employee's working for another month or two?

but MLB players with 50 million dollar contracts can complain about playing for less?

It time for the million dollar players and billionaire owners to step up and help the employees hurt the most
Click to expand...

Some players did give money to their arena staff.
 
Jkbiker said:
Sorta proves my point earlier in the thread, the rent money was not required to be paid, Vivek could have provided the arena
at no charge just like they are doing now, just had to amend the lease agreement

How many patients actually used the arena for that 1 Million dollars?

They could have decided to use the 1 million to keep the full time employee's working for another month or two?

but MLB players with 50 million dollar contracts can complain about playing for less?

It time for the million dollar players and billionaire owners to step up and help the employees hurt the most
Click to expand...

Eh, I think what happened is that the original contract was for 2 (?) months, they got paid $1 million for those (which I have no trouble with), and then they basically said "We aren't using the arena for anything else, go ahead and keep it set up that way for a few more months. No biggie on our end."

Whether it was ultimately used or not, it was in place in case the possible surge of cases (that I am glad never materialized to the degree they could have). For people's sake, I'd rather have an unused facility than need it and not have it.

Who says they didn't use the $1 million to keep folks on as long as they did? I don't know and I'm not going to start second guessing them without facts to back up accusations. The owners are losing a crapload of money right now. It's not my money and I'm not about to criticize people for stemming some of the losses if they need to. I may not like it for the sake of those let go, but even rich people can only dole out so much without resources pouring back in.

I know the optics are bad (to some worse than others), but unless there are facts to back up some of the negativism, I'm not going to get too excited about it. They got paid the going rate to use the arena and they threw in the practice facility for free. Now they are going to provide both for free until the end of October. Good for them to do so.

And we are not about to start arguing about the politics of it, etc. That doesn't belong here.
 
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No politics here, I am a CPA , I am a numbers guy

So lets see these poor owners need to save payroll on approx. 100 employees for a 4 month furlough
Lets guess at an average annual salary of $50,000 x 100 EEs / 12 months is $416,000 per month so lets say 2 Mil?

Article in Bee says Kings organization is "bracing for tens of millions of uninsured loss" again don't know how much
but since tens is plural lets use 20 Mil

So yes its not my money, but lets put into perspective the losses vs. Owners and players.
Losses $22,000,000

vs.

Team owned by billionaires and millionaires
Team purchased $534M in 2013 Value Team 2019 forbes list 1.575 billion is profit of $1,041,000,000
Annual player salaries $100,000,000
Less Losses above ($22,000,000)

So total losses 2% Employee salaries .2 of 1%
Yes I am glad kings decided to let the state off the hook for the $500,000 per month for a "standby" hospital
Yes I feel very bad for the 100 employee's who might be living paycheck to paycheck
This is not a small restaurant owner trying to survive this shut down who might have to close forever
but announcing the free hospital and then a layoff of 100 employee's ?

To the Whales? Its just numbers
To the Employee's its their rent
No Politics, just numbers
 
Jkbiker said:
No politics here, I am a CPA , I am a numbers guy

So lets see these poor owners need to save payroll on approx. 100 employees for a 4 month furlough
Lets guess at an average annual salary of $50,000 x 100 EEs / 12 months is $416,000 per month so lets say 2 Mil?

Article in Bee says Kings organization is "bracing for tens of millions of uninsured loss" again don't know how much
but since tens is plural lets use 20 Mil

So yes its not my money, but lets put into perspective the losses vs. Owners and players.
Losses $22,000,000

vs.

Team owned by billionaires and millionaires
Team purchased $534M in 2013 Value Team 2019 forbes list 1.575 billion is profit of $1,041,000,000
Annual player salaries $100,000,000
Less Losses above ($22,000,000)

So total losses 2% Employee salaries .2 of 1%
Yes I am glad kings decided to let the state off the hook for the $500,000 per month for a "standby" hospital
Yes I feel very bad for the 100 employee's who might be living paycheck to paycheck
This is not a small restaurant owner trying to survive this shut down who might have to close forever
but announcing the free hospital and then a layoff of 100 employee's ?

To the Whales? Its just numbers
To the Employee's its their rent
No Politics, just numbers
Click to expand...

Thanks for the #s. That gives me a better idea of where you are coming from. I am not a CPA, just an engineer, so my assumptions may be wrong on any of the following - please let me know if that is the case. Obviously this is all conjecture/assumptions on my part, but they seem reasonable to me.

The current team value you are showing is unrealized. Until the team is sold those dollars are all imaginary. The owners have, at this point, kicked in over $530 million for the team plus what they are paying for the arena, operating costs, the player salaries, etc. - all of this comes out of income derived from arena/team operations, merchandise sales, etc. Right now, there are no events going on and likely very little merchandise being sold (with nobody attending events, I'd bet sales are, at most, 5% of normal). They have essentially zero income right now and are still paying a fair portion of player salaries, ongoing facility maintenance, some reduced facility costs for holding voluntary practices, etc. While they are rich, this is a matter of cash flow during a period of essentially no income.

Would I like them to keep all the employees paid during this time? Of course! But, given the above, I can see how they might need to sharpen the budget pencil as we still have no idea when anything resembling "normal" operations may resume.

I have no idea if they are still getting any TV revenues, etc., or how any of their contracts are structured or insured. I am assuming that no games being played means reduced/delayed/stoppage of TV revenue. However, even TV revenue only goes so far.
 
Warhawk said:
They (the team owners) have essentially zero income right now and are still paying a fair portion of player salaries, ongoing facility maintenance, some reduced facility costs for holding voluntary practices, etc.
Click to expand...

Actually, I don't think the owners are paying player salaries right now. The CBA allows that during a force majeure event that prevents games from occurring (and pandemic is specifically listed among the examples) that player salaries are prorated by games lost. Obviously maintenance costs and other facility/salary costs are still there.

I have no idea if they are still getting any TV revenues, etc., or how any of their contracts are structured or insured. I am assuming that no games being played means reduced/delayed/stoppage of TV revenue. However, even TV revenue only goes so far.
Click to expand...

I don't know if the TV revenue shuts off or not, but I would imagine it does.
 
Capt. Factorial said:
Actually, I don't think the owners are paying player salaries right now. The CBA allows that during a force majeure event that prevents games from occurring (and pandemic is specifically listed among the examples) that player salaries are prorated by games lost. Obviously maintenance costs and other facility/salary costs are still there.

I don't know if the TV revenue shuts off or not, but I would imagine it does.
Click to expand...

My understanding is that, at least temporarily, they hadn't invoked that and players were still being paid, albeit at a reduced rate right now. They won't invoke force majeure until the games are actually cancelled, and they haven't been.

https://www.espn.com/nba/story/_/id...players-receive-25-less-paychecks-starting-15

Again, I could be reading that wrong, but that is my understanding.
 
Warhawk said:
Thanks for the #s. That gives me a better idea of where you are coming from. I am not a CPA, just an engineer, so my assumptions may be wrong on any of the following - please let me know if that is the case. Obviously this is all conjecture/assumptions on my part, but they seem reasonable to me.

The current team value you are showing is unrealized. Until the team is sold those dollars are all imaginary. The owners have, at this point, kicked in over $530 million for the team plus what they are paying for the arena, operating costs, the player salaries, etc. - all of this comes out of income derived from arena/team operations, merchandise sales, etc. Right now, there are no events going on and likely very little merchandise being sold (with nobody attending events, I'd bet sales are, at most, 5% of normal). They have essentially zero income right now and are still paying a fair portion of player salaries, ongoing facility maintenance, some reduced facility costs for holding voluntary practices, etc. While they are rich, this is a matter of cash flow during a period of essentially no income.

Would I like them to keep all the employees paid during this time? Of course! But, given the above, I can see how they might need to sharpen the budget pencil as we still have no idea when anything resembling "normal" operations may resume.

I have no idea if they are still getting any TV revenues, etc., or how any of their contracts are structured or insured. I am assuming that no games being played means reduced/delayed/stoppage of TV revenue. However, even TV revenue only goes so far.
Click to expand...

Yes of course the team value is unrealized almost all investments have an element of unrealized income
The rental house that goes up in value, Stock that goes up in value, My 401k mutual funds
But what investor would not be thrilled for their rental house or stock to triple in value in 6 years
The point is the equity in the new value did increase substantially
Yes that rental house investment may have a big neg cash flow until tenants can afford to pay the rent
but investors always have to be prepared for tough years, again my point was that covering the loss is still
substantially less than the Billion dollar increase in value, even if you cant spend the value until you sell

Yes Kings are cutting all sorts of expenses, but even the state which is deep in the hole is proposing 10% cut to salary
or furlough one day a week etc. -0- income is always hard on an employee but Kings couldn't cut staff salary by 20% across the board and
save these jobs? Cut the salary, cut hours seems harsh to cut income to -0-
 
Jkbiker said:
Yes of course the team value is unrealized almost all investments have an element of unrealized income
The rental house that goes up in value, Stock that goes up in value, My 401k mutual funds
But what investor would not be thrilled for their rental house or stock to triple in value in 6 years
The point is the equity in the new value did increase substantially
Yes that rental house investment may have a big neg cash flow until tenants can afford to pay the rent
but investors always have to be prepared for tough years, again my point was that covering the loss is still
substantially less than the Billion dollar increase in value, even if you cant spend the value until you sell

Yes Kings are cutting all sorts of expenses, but even the state which is deep in the hole is proposing 10% cut to salary
or furlough one day a week etc. -0- income is always hard on an employee but Kings couldn't cut staff salary by 20% across the board and
save these jobs? Cut the salary, cut hours seems harsh to cut income to -0-
Click to expand...

I get it. About a decade ago everyone at the company I used to work for took a 10% hit so that everyone could stay employed. And I was happy to do that so we didn't lose any fellow employees in that recession. Some of the owners were not getting any paychecks at all.

But just because my house increases in value 50% doesn't mean that I can afford to live the same way if my income is slashed; in this case they are losing the vast majority of their income. If my company all of a sudden lost 80%+ of their income, I wouldn't expect them to keep everyone on the books at that point. There is a big difference between "tough times" (recession) and almost an entire loss of income due to a pandemic shutting everything down, the likes of which we haven't seen in about 100 years.

They did keep everyone on the payroll for at least a couple months after operations ceased. That's better than most could expect elsewhere.
 
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