Maloofs sell their Bev co???
- Thread starter =LarryLegend=
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They may not be selling low in this one. They may be selling at a middle. Reason: alcohol has traditionally been an almost recession proof business. In fact, sometimes it even swings up in these times. They may just be moving their money around, or at least liquifying, in order to get out of dollars and into other currencies. In other words, could be more of a longterm move more than a panic one. They may just feel like longterm, they should play international markets, rather than working the NM game. Probably not selling at the high point, but I doubt honestly selling at the lowpoint.
The Maloof's have diversified asset generated income and just sold one pillar. That leaves them with The Palms in Las Vegas, Maloof Sports & Entertainment (The Sacramento Kings, some music/film ventures, and the franchise formerly called The Sacramento Monarchs), plus being one of the largest share holders in Wells Fargo Bank - an exclusive private banking relationship to house the doe.
The Palms Hotel & Casino came into being after selling another of their Nevada gambling properties at a huge profit. Now, that bet is in trouble until and if the economy comes roaring back. The Sacramento Kings were never a huge money maker, not even close, and now are said by ownership to be a "break even" venture. They've always been pretty much a break even biz and surely no one could have expected anything else from a professional sports franchise which is basically a hobby for anyone who is fortunate enough own one. The only time they make money is when you sell the team - and the Maloofs certainly know that. Now in these rough economic times it may be only a matter of time before yet another pillar of the Maloof empire disappears.
The Palms Hotel & Casino came into being after selling another of their Nevada gambling properties at a huge profit. Now, that bet is in trouble until and if the economy comes roaring back. The Sacramento Kings were never a huge money maker, not even close, and now are said by ownership to be a "break even" venture. They've always been pretty much a break even biz and surely no one could have expected anything else from a professional sports franchise which is basically a hobby for anyone who is fortunate enough own one. The only time they make money is when you sell the team - and the Maloofs certainly know that. Now in these rough economic times it may be only a matter of time before yet another pillar of the Maloof empire disappears.
Well unlike the Monarchs the Kings wouldn't just get disappeared. They would be sold off to somebody else. But I think its safe to say the "pay for your own damn arena" line of thinking, which was a pipedream from the start, is completely out of the question now.
I remember when the Madoff fraud was first uncovered there were the reports that the Maloofs had suffered massive losses from it, but that a few days later the Maloofs denied any connection at all to it. Do have to wonder with this serious retrenching though. Did they just overextend themselves in Vegas? Or did they take a huge hit by having too much money in the markets?
I remember when the Madoff fraud was first uncovered there were the reports that the Maloofs had suffered massive losses from it, but that a few days later the Maloofs denied any connection at all to it. Do have to wonder with this serious retrenching though. Did they just overextend themselves in Vegas? Or did they take a huge hit by having too much money in the markets?
Found a link to the article:
It's hard to draw a conclusion whether the Maloof is in financial trouble. It's very possible they just need cash to invest at other places. I say that because my family is selling a commercial property that we've held for decades. Not because we need the money but because we are seeing so many once-in-a-lifetime opportunity out there that we need cash to invest in those places. And you have to have cash on hand because commercial lending is dead right now.
It makes sense for the Maloof to sell an asset that has depreciated but not by much and reinvest the money at assets/instruments that have great potential and are at an all-time low value. It'll be curious to see what they do next.
My gut feeling is that if they really are in trouble, they would have sold the non-earning asset (Kings) instead of the earning asset (distributorship).
It's hard to draw a conclusion whether the Maloof is in financial trouble. It's very possible they just need cash to invest at other places. I say that because my family is selling a commercial property that we've held for decades. Not because we need the money but because we are seeing so many once-in-a-lifetime opportunity out there that we need cash to invest in those places. And you have to have cash on hand because commercial lending is dead right now.
It makes sense for the Maloof to sell an asset that has depreciated but not by much and reinvest the money at assets/instruments that have great potential and are at an all-time low value. It'll be curious to see what they do next.
My gut feeling is that if they really are in trouble, they would have sold the non-earning asset (Kings) instead of the earning asset (distributorship).
I generally agree with this assessment. Times like these are when rich people get even richer. This is a buyer's market. These guys are not dumb when it comes to business. But the thing is you do need cash. Cash is huge in times like these. It's much more valuable than at other times. If you've got cash, man people will give you almost anything right now. If you have any financial strength, which the Maloofs do, now is when you can really shore up and make some moves that will propel you for a long time.
You guys are somewhat missing that this was the foundation company -- this was their dad's big deal. Dad? Grandad? Forgot which. In any case, this is the family business with the family name that sent them all on the road to riches. Now maybe they just decided they had moved away from it. Possible. But with a rich family that places major importance on family, selling the company that started it all and bears their father's name would not be a casual thing. Nor would selling the Kings for similar reasons, but it seems pretty clear they are retrenching.
I'm not going to sound the imminent disaster alarm just yet, because maybe like the Monarchs liquidation they are retrenching in particular around the Kings and Vegas -- going glitzy entertainment. So you could take it as a positive that the Kings are one of the core assets they are determined to protect. But it seems pretty clear the days of $6million dollar burgers are at least temporarily over. And also seems clear that if money now means somethng to them, Sacto is going to need to find a way to get them a new stadium and butts in the seats or the next city which offers them those things may get the team.
I'm not going to sound the imminent disaster alarm just yet, because maybe like the Monarchs liquidation they are retrenching in particular around the Kings and Vegas -- going glitzy entertainment. So you could take it as a positive that the Kings are one of the core assets they are determined to protect. But it seems pretty clear the days of $6million dollar burgers are at least temporarily over. And also seems clear that if money now means somethng to them, Sacto is going to need to find a way to get them a new stadium and butts in the seats or the next city which offers them those things may get the team.
Everytime I comment on the kings lack of arena / chance of moving I need to throw out this disclaimer : I'm from the outside looking in, I'm not as close to the situation as most of you are so take these comments with a grain of salt.
I feel like Kings Fans as a whole might be a little too optimistic. For every one positive point for the Kings staying here it seems that there are five more negatives. From what I've read it really doesn't look good for the Kings and Sacramento, there is no Arena being built, IF we get a Arena plan it will take at least 2 years to complete. If the economy gets worse during building it could easily be cancelled or postponed. I saw what happened to the Sonics, and I don't want to see it happen here, but I fear it's already started.
I feel like Kings Fans as a whole might be a little too optimistic. For every one positive point for the Kings staying here it seems that there are five more negatives. From what I've read it really doesn't look good for the Kings and Sacramento, there is no Arena being built, IF we get a Arena plan it will take at least 2 years to complete. If the economy gets worse during building it could easily be cancelled or postponed. I saw what happened to the Sonics, and I don't want to see it happen here, but I fear it's already started.
This story came out last week. They basically said that with the Casino and the Kings they are spreading themselves thing. They want to keep their focus on the Casino and the Kings.
This is a non-story in to me except that they are putting their priorities where thes hould be. They don't need to be doing 10 different things. (they were trying to start a record label at one time).
If rumblings of suitors for the Kings or their Casino start surfacing now we're talking. While beverage distribution is recession proof, a guy came on the radio and said the beverage industry is changing by the day right now, with many more changes to come. if they felt they weren't going to be at the forefront then getting out was the best thing. While beverage distributioin can be very profitable, so can, oh say, a Casino Resort in Vegas. Now they may be taking a hit now, but that will be short lived. Things are slowly coming back, and in the long run a Casino will bring in much more profit than beverage distribution.
This is a non-story in to me except that they are putting their priorities where thes hould be. They don't need to be doing 10 different things. (they were trying to start a record label at one time).
If rumblings of suitors for the Kings or their Casino start surfacing now we're talking. While beverage distribution is recession proof, a guy came on the radio and said the beverage industry is changing by the day right now, with many more changes to come. if they felt they weren't going to be at the forefront then getting out was the best thing. While beverage distributioin can be very profitable, so can, oh say, a Casino Resort in Vegas. Now they may be taking a hit now, but that will be short lived. Things are slowly coming back, and in the long run a Casino will bring in much more profit than beverage distribution.
I don't think we're there yet, but it is close.
I was surprised to see they news of their sale of their Dad's beer distributorship in NM. I think the family picked that up in 1937. But I have no doubt the economy has hurt them in more ways than one.
The expansion project at the Palms ended up being very bad timing with the economy in the dumps and I'll sure they owe payments on some pretty big loans for that. I wonder if they actually have sold all those very expensive condos.
Everyone has had to figure out what to do to make it through this down point in the economy. The Mallofs aren't the only business owners trying to keep business afloat and retrenching, revising and cutting expenses.
Also, Joe Maloof hasn't looked all that well when I see him. Perspectives change and maybe they just didn't want so many irons in the fire anymore. I think only the sister has kids. Family maybe getting smaller in the next generation makes a difference, too. The Maloof guys aren't getting any younger.
I was surprised to see they news of their sale of their Dad's beer distributorship in NM. I think the family picked that up in 1937. But I have no doubt the economy has hurt them in more ways than one.
The expansion project at the Palms ended up being very bad timing with the economy in the dumps and I'll sure they owe payments on some pretty big loans for that. I wonder if they actually have sold all those very expensive condos.
Everyone has had to figure out what to do to make it through this down point in the economy. The Mallofs aren't the only business owners trying to keep business afloat and retrenching, revising and cutting expenses.
Also, Joe Maloof hasn't looked all that well when I see him. Perspectives change and maybe they just didn't want so many irons in the fire anymore. I think only the sister has kids. Family maybe getting smaller in the next generation makes a difference, too. The Maloof guys aren't getting any younger.
I'm sure they're willing to keep the Kings but even if they weren't and were looking to sell, I wouldn't look at this as the worst thing in the world.
Some major developer could always step up and say that if he were going to front all the money for an arena, he would want control of the arena and team as well. There's always the chance that some billionaire with no problem fronting money for an arena can step up and buy the team, thus making the quest for an arena an easier one.
Problem is, does this person exist?
Some major developer could always step up and say that if he were going to front all the money for an arena, he would want control of the arena and team as well. There's always the chance that some billionaire with no problem fronting money for an arena can step up and buy the team, thus making the quest for an arena an easier one.
Problem is, does this person exist?
In financial planning, owning a company for 200 years or having your family name as the company name means absolutely nothing. The only thing that matters is dollar and cents. The Brancroft owned Dow Jones since 1928, but when the price is right they sold without even blinking.
Perhaps the Malooofs are retrenching, and if they are, the Kings should be the first for them to let go. When companies retrench they usually sell the loser and keep the money-maker. If the Maloof is retrenching then they're not doing it right by selling the money maker and keeping the money-loser.
Or perhaps the Kings is next on the chopping block, I don't know. But you're right Brick, there is not enough to sound the alarm just yet.
But if not, selling the Chargers would give him the capital to pay for the arena right off the bat. With the value of NFL teams at a minimum of $600 million, you have to figure that the Chargers could fetch at least that, especially if Spanos sells to the people building the LA football stadium. An LA football team is valued at over a billion. Spanos could buy the Kings AND the arena with that type of dough.
There are very few people in the world that could front money to buy a pro team and build an arena. Paul Allen is one of the richest men in the world, but he went bankrupt on his arena.
Hoping for a person like that to come along is like hoping for Hawaiian beach weather in Nunavut. (Actually, that may happen sooner, if they're right about global warming.
)
Hoping for a person like that to come along is like hoping for Hawaiian beach weather in Nunavut. (Actually, that may happen sooner, if they're right about global warming.
)
There are very few people in the world that could front money to buy a pro team and build an arena. Paul Allen is one of the richest men in the world, but he went bankrupt on his arena.
Hoping for a person like that to come along is like hoping for Hawaiian beach weather in Nunavut. (Actually, that may happen sooner, if they're right about global warming.)
Hoping for a person like that to come along is like hoping for Hawaiian beach weather in Nunavut. (Actually, that may happen sooner, if they're right about global warming.
)
But the Giants got Magowan to buy the team and build the stadium with his own money while Mikhail Prokhorov is doing the same with the Nets. He could easily buy both but Ratner wants to keep equity in both so he's only selling a portion.
The question isn't whether they have the money, it's whether they want to invest it or not in such things. If Spanos got a billion or close to it for the Chargers, he would have both covered. The question isn't would he have the money but would it be worth his time and effort.
There are very few people in the world that could front money to buy a pro team and build an arena. Paul Allen is one of the richest men in the world, but he went bankrupt on his arena.
Hoping for a person like that to come along is like hoping for Hawaiian beach weather in Nunavut. (Actually, that may happen sooner, if they're right about global warming.)
Hoping for a person like that to come along is like hoping for Hawaiian beach weather in Nunavut. (Actually, that may happen sooner, if they're right about global warming.
)