maloof arena options reported from espn dime mag

[kennadog]

And if their venture is not profitable they expect the public to provide them with the means so they can make money.

I do not believe that the Kings lose money year after year. The NBA gives them enough money to pay most of the operating cost of the team. Combine that with the amount they get from local revenues and they have exceeded the operating costs. If there are additional costs, they should shoulder the costs.

I did not put words in your mouth. No one here, that I'm aware of has ever said the Maloofs have lost money every year. However, you seem to think they make plenty of money to build an arena all by themselves. No they don't. Why? Because they do not make enough money from the franchise to float a commercial loan of that size.

 

[kennadog]

Once again you are putting words in my mouth. go back and read my comments. I will make it simple for you. An arena should not paid for by 100% of public money and then leased to someone for less than what the taxes on that property would have been. I dont think I can put it into simpler language for you.

That's fine. You were somehow acting like the Maloofs are making a bunch of money and you don't believe otherwise.

With the above quoted statement there is no need to discuss whether the Maloofs are super billionaires or paupers or whether they are losing money or making money, because it bears no relationship to the sentiment expressed in this quoted statement.

 

[VF21]

Once again you are putting words in my mouth. go back and read my comments. I will make it simple for you. An arena should not paid for by 100% of public money and then leased to someone for less than what the taxes on that property would have been. I dont think I can put it into simpler language for you.

NO ONE has said it should be paid for entirely by public funds and you know it. You've made the same comment - without basis in fact - repeatedly. Now you're getting to the point where you're being condescending to our members? Take it down a notch, okay?

VF21
Moderator

 

[Warhawk]

It appeared in the Sacramento Bee around the middle of September. A representative of the NBA was trying to make a point that the Maloofs didnt have a very large tv contract like some of the other teams do. I think it was Stern but i could be mistaken. I believe what he said was stated that all teams receive around 30 million from the NBA for the TV rights. Joe Maloof also said that they receive another 10 million for the local tv rights. If you calculate ticket sales alone for 45 games, using a conservative average price of 80 dollars a ticket you get another 63 million dollars. Salaries run Around 60 million. That leaves 45 million + to take care of all the costs associated with the team. there are lots and lots of other cost, I know. There are also sources of revenue that we simply do no know of or could event think that we know of. Please dont insult me and think that I dont know that their are a lot of costs that I dont know about. Of ocurse their are. There are probably just as many sources of income that they have that you dont know about. But there are many ways to show that a company is not making a profit. So what if the Maloofs opened their books to the BEE. I am sure that everything was on the up and up.

What I am saying is simple. I do not believe that they lose money year after year. There are many peope who would agree with me. There are many who disagree with me ...

Wonderful, again we are supposed to take your word on an article you claim to have read but cannot provide?

Uh, no.

C'mon - if it's that important to your point, and you remember all the details pretty clearly, apparently, find it.

 

[Warhawk]

Here's a little bit for you to think about (re: an arena and the Maloofs making money with the Kings):

http://www.sacbee.com/100/story/71623.html

The Maloofs, by my account, made two gaffes. They failed to hire an effective personal adviser, and they did a terrible job articulating their very legitimate need for a modern facility and a private/public partnership. They virtually ignored their biggest ally -- NBA economics.
Sacramento is not Los Angeles, Chicago or New York, where corporations and huge regional television contracts essentially pay the bills and ensure profits. The NBA small-market landscape, frankly, has become a financial mess. Owners are jumping ship, if not off bridges, primarily because their arena lease agreements fail to provide adequate profits from parking, food, club seats, and the other amenities and revenue streams so plentiful in the larger cities.
Seattle SuperSonics owner Howard Schultz of Starbucks fame bailed after five seasons. Memphis Grizzlies owner Michael Heisley is selling after a similarly short tenure. Portland owner Paul Allen is threatening to sell unless the Trail Blazers' lease is revised. Milwaukee owner Herb Kohl, a U.S. senator, is rumored to be selling the Bucks after his expected re-election next week. Bradley Center was built the same year as Arco (1988), and as the league's second-oldest facility, is plagued by several of the same issues and an even more problematic lease.
Glen Taylor, whose Timberwolves compete in an ideally located Target Center in downtown Minneapolis, says his club is losing substantial sums because the more modern NHL arena in St. Paul is luring away corporate sponsorships, concerts and other acts.
"In these older buildings," Taylor said recently, "it's getting very hard."
Then there is Orlando. After years of frustration, Magic officials recently agreed to relinquish operation of a new arena to be built as part of a downtown renovation. As one league official said, "In a smaller market, if the owners operate the building, they better control most of the parking and other revenue, or it's a losing proposition."
In that respect, the Maloofs' demands regarding a downtown facility -- which they would operate rather than own, make immense business sense. Whether a deal in the railyard is workable in light of the other issues is another matter.

http://espn.go.com/nba/columns/howard-cooper_scott/1402394.html

The owners, Joe and Gavin Maloof, have decided to tie themselves down on the tracks and stare directly at the oncoming train. They will, barring a change of thinking, take what could be a major financial hit, and everyone else will have to take them out on a stretcher if things go bad.
Feel not for a family that owns a young Las Vegas casino just off the Strip and a major beer distributorship among its other big-business entities. But understand that they have just decided, after considerable contemplation and hand wringing, that Mike Bibby can be re-signed as a free agent without another prominent King having to be thrown overboard in the name of fiscal responsibility and that it will mean a massive payroll for a team reportedly already losing money. They have decided to keep together the team that got within minutes of winning the Western Conference championship, and therefore the NBA title, which makes every bit of sense from a basketball standpoint but becomes a risk on so many other levels.
The guys who set the house rules in Vegas are gambling. They don't have the deep pockets of Paul Allen in Portland or Mark Cuban in Dallas or the corporate backing of the Knicks, and now the Kings have made a major decision/financial commitment to stay on the heels of the Los Angeles Lakers. Keep Bibby. Keep everyone in the rotation, unless a great trade opportunity comes along.
The implications are then compounded because the money that teams pay in tax are divided only among those that stayed under the number, meaning Sacramento would also miss out on that take.
That's why Joe Maloof noted in mid-June that, "Say we sign Bibby for $7 million, then we're paying $10 million in the tax. That's a $17 million contract in that sense. There's a certain point where you have to look at it in a business sense. You have to take the basketball hat off and put the business hat on."
"We have unfinished business," Joe Maloof said. "We all came to the conclusion that we were really close to winning a championship, so we need to keep the machine rolling. Believe me, we're going to get slammed with the luxury tax. But the fans have invested too much of their emotions. They deserve this. So do our players."
None of whom, of course, are on the hook for the payroll. The Maloofs could lose big bucks next season, meaning that for the first time in Sacramento history, nothing less than a championship is acceptable.

 

[BMiller52]

I think voteno is Dave Jones...

 

[ShatteredVision]

Does the city/county make any money from taxes on player salaries?

 

[kennadog]

Does the city/county make any money from taxes on player salaries?

Neither the city nor the county has income tax. Most Sacramentens are grateful for that, I'm sure.

 

[VF21]

I think voteno is Dave Jones...

I'm not sure if he's Dave Jones but I'm reasonably sure he's one of the reasons the sacbee forum discussions on the arena just went in circles time after time after time.

 

[voteno]

article information:

for those of you who who waiting for the article, I gave up trying to find it, as I foudn the same information on this board. ALthough it is substantially older.

The Kings do receive $24.9 million - a quarter of the organization's income - from the NBA for its share of the national TV rights fee.) ( this is from 2002, I think) It also references on this site that they receive 10 million locally for the broadcast rights. Add in the income from tickets at a modest $80 average , subtract the players salaries and you have the numbers that I put forth in the post that was questioned. It was indeed FACT. thank you very much. now feed your unicorn.

I also read about the losses and dont recall ever reading that. but you also should note that the hughe loss was during the strike. When you remove the interest and principal payments on the loans, you get either a very small loss, or a small net income. Yes you can exclude that money from their profits as the amount they paid for the Kings had that debt service tied to it. Also when you factor intothe fact that the Kings have gained value in excess of over 100 million dollars they have actually made money and a lot of it.

 

[voteno]

more info - facts from the experts themselves

More numbers and info to boost my claim that the Maloofs may not be losing money like they claim
From concerts to the circus, Arco stays busy so the Kings can keep.... Paying the Bills
Arena officials vigorously court other events
The Sacramento Bee
April 16, 2002
Author: Gilbert Chan
Bee Staff Writer

The building has 30 luxury suites typically leased for three, six or 10 years for up to $200,000 annually. The average yearly rental is about $150,000.
5 million dollars annually!
To rent Arco, Maloof Sports charges $10,000 or 15 percent of gross ticket sales, whichever is greater, plus it takes all the revenues from parking, concessions and advertising in the arena.

In 2001, the arena had 171 events catering to a spectrum of entertainment tastes.
Another 2 million dollars!
Also to those who feel that it Arco has to be replaced.

Even with Arco's age and limitations, the Maloofs maintain publicly that they are happy with the arena. Even as the city studies building a $300 million arena in the downtown railyards to spur development, the Maloofs and Thomas say they are focused on trying to make the best of Arco.

"If they don't want it, we're OK here," Joe Maloof said of city officials studying whether to help the Kings pay for a new arena. "We do well here. We're always going to try to improve what we have here at Arco."

Thomas describes Arco's environment as "one of a kind," and says fans haven't complained about the arena's limitations.

"There's some element to human nature that sometimes says the grass is always greener elsewhere," Thomas said. "But the grass is very green right here at Arco. It (a new arena) is not even on our radar screen."




For the naysayers who say thats Arco loses entertainment due to its problems.
Big-name entertainers prefer to perform at the amphitheater near Marysville rather than Arco because they usually receive bigger fees, said Gary Bongiovanni, editor and chief of Pollstar magazine, a Fresno-based concert trade publication.

The amphitheater is owned by Clear Channel Entertainment, which handles more than two-thirds of the major concert business in the United States.

"Clearly it's more profitable for them (Clear Channel) to play dates in the amphitheater because it's their facility," Bongiovanni said. "They're going to try to steer as many shows as possible into their network of amphitheaters."

 

[VF21]

Yeah, okay. More smoke and mirrors without substance on your part. You still haven't shown anything to prove the Maloofs are misleading the public. Utilizing figures from 2002 (that's four years ago, in case you didn't notice) doesn't bolster your claims.

But feel free to keep trying.

 

[voteno]

you asked for information to back up my claim there it is

Rather it is information from the current year or from 4 years ago, my point is valid. Ypu asked for facts I gave them to you. it really doesnt make a difference that the info is from 4 years ago as the amounts have only went up since then.

My point was simple. That the Maloofs can be making money and investing it into the team. They are still making money. It may not appear so on paper, but they are makig money. They claim to have lost money most of the time that they have been here. In that very article it shows that they posted a loss of 5.5 million dollars. It also goes on to say that they made payments of 5.7 million dollars on the loan that they agreed to take over. This is a perfect example of ways where you can show a loss, but have really made money.

I am not making up things as you stated. You asked for my source. I gave you a source. It may not have been the one I origianlly referred to but it still backs up my claims exactly. Thank you for your apology. I deserve one after your comments to me.

 

[VF21]

I did not apologize nor will I.

You're mixing apples and oranges and your contentions simply do not hold water. You're trying to say a legitimate business debt that is being repaid is a way to show a loss when you're really making money? There's a big difference between making money and making a profit. You might want to check into it.

 

[Kingzrool]

But feel free to keep trying.

OH VF why?? I think I am going to stop reading voteno's posts.

 

[VF21]

Me, too!

 

[voteno]

the price that the Maloofs paid for the kings included the loan

Therefore it is a seperate issue. The kings appear to have spent more money than they they brought in because they reinvested in the team as well as paid off some of the debt that was associated with the team. Had they not done either, the team would be profitable, although they may not have some of the players they currently do or have had. My contentions are true and correct. Ask any accountant about my statements. They are solid statements that would stand up to any audit. They may lose money from time to time, but their overall performance with the kings is to have made money.. somewhere in the neighborhood of 100 million dollars.

 

[Warhawk]

They may lose money from time to time, but their overall performance with the kings is to have made money.. somewhere in the neighborhood of 100 million dollars.

Well, you're completely wrong. They've made a lot more than $100 million.

Problem is, they've got those nasty things called bills, including salaries, building expenses, utilities, debt payments associated with a loan assumed when they bought the team, etc, etc. But if it wasn't for all those things, they'd actually be making money!

I sense that the Force is not strong with this one....

 

[Warhawk]

Therefore it is a seperate issue. The kings appear to have spent more money than they they brought in because they reinvested in the team as well as paid off some of the debt that was associated with the team. Had they not done either, the team would be profitable, although they may not have some of the players they currently do or have had.

That's like saying that you bought a house and rent it out for $1,000 (the max) but if you didn't have to pay the mortgage or maintenance costs or insurance (which cost $1,100), you'd be making money every month....

What a great example for your "side"! You really showed us!

 

[VF21]

Well, you're completely wrong. They've made a lot more than $100 million.

Problem is, they've got those nasty things called bills, including salaries, building expenses, utilities, debt payments associated with a loan assumed when they bought the team, etc, etc. But if it wasn't for all those things, they'd actually be making money!

I sense that the Force is not strong with this one....

Memo to Warhawk:

You owe me a keyboard...

That is all...

 

[fiction916]

Does the city/county make any money from taxes on player salaries?

No, but they do make money from property taxes for houses bought with player salaries, and money from sales taxes from goods and services bought with player salaries.

 

[Warhawk]

Memo to Warhawk:

You owe me a keyboard...

That is all...

That's a couple times now. I'm on a roll!

 

[ladyjay114]

I sense that the Force is not strong with this one....

Warhawk, I've been an accountant for about 10 years and I've never seen a total lack of business acumen like "Voteno" is displaying in my life. The cumulative ignorance and lack of reality is startling. I'm so baffled by his logic, I couldn't even reply to his posts.

 

[VF21]

ladyjay114 - I've been meaning to thank you for some of the posts you've made explaining some of the numbers involved in these discussions. Glad to have you here!

Thanks!

 

[Warhawk]

Warhawk, I've been an accountant for about 10 years and I've never seen a total lack of business acumen like "Voteno" is displaying in my life. The cumulative ignorance and lack of reality is startling. I'm so baffled by his logic, I couldn't even reply to his posts.

My sister, too.













I just sleep in a Holiday Inn Express.

 

[6th]

My sister, too.













I just sleep in a Holiday Inn Express.

Dang, Warhawk!

Now you owe me a keyboard too.

That is all.

 

[ShatteredVision]

We need an arena that doubles as guaranteed flood protection and feeds the poor!

 

[VF21]

And has NO crime!

 

[slugking50]

I think voteno is Dave Jones...

Does voteno live in a heavily guarded bunker too?

 

[kennadog]

I did not apologize nor will I.

You're mixing apples and oranges and your contentions simply do not hold water. You're trying to say a legitimate business debt that is being repaid is a way to show a loss when you're really making money? There's a big difference between making money and making a profit. You might want to check into it.

Well, LadyJay won't say it, but I can deal with this part. Only interest being paid on a loan can be shown as a business expense each year. Payments applied to prrincipal cannot be shown as a business expense. The payments on the principal can only be shown as a reduction in liability and an increase to equity, basically. That's the simple version.