Marcos Breton: Keeping the Kings will take public money

[JB_kings]

http://www.sacbee.com/2010/09/05/3006218/marcos-breton-keeping-the-kings.html

Wasn't this the guy that was railing against all this? Now he is Mr. Reasonable?

 

[Circa_1985_Fan]

http://www.sacbee.com/2010/09/05/3006218/marcos-breton-keeping-the-kings.html

Wasn't this the guy that was railing against all this? Now he is Mr. Reasonable?

No, Marcos was never really against this, it was R.E. Graswich.

 

[Superman]

So it comes down to what's the cost of doing business, and does that cost have the potential to be paid for in increased revenue and jobs and such from the development project and the long term value of the arena?

If taxpayer subsidies were used to finance a portion of the arena project, would the city/county be provided with an interest in the property? Or are the funds provided in the form of a loan that's paid back in time, and there's a lien against the property until it's paid off (like the loans the city has already provided)?

 

[Larry David]

Looks like we won't be learning much from the hearing. From the story:

Like all major sports franchises, the Kings don't open up all their books to the public. The secrecy clauses of the Kings city loan are incredible.

Sacramento's city treasurer and one other city staff member can take notes while studying the Kings books – but they have to hand them over to the team when they are done.

Russ Fehr, the current city treasurer, is barred by the loan agreement from discussing the Kings finances in detail with City Council members.

All Fehr can do publicly is answer yes or no on whether the Kings are viable enough to repay their debts.

Fehr says the answer is yes, and we have to take his word for it.


Read more: http://www.sacbee.com/2010/09/05/3006218/marcos-breton-keeping-the-kings.html#ixzz0ytRM6Mj5

 

[Larry David]

Marcos is about a day late and a 300 million dollars short on this one.

There is a funding gap between what the city and the Maloofs can pay. Otherwise, this would be done.

There was a time when the city had the cash to close the gap. They blindsided the Maloofs with a public offer at a meeting, the Maloofs walked off and stopped negotiating with the city for a while. At this point, neither can pony up the upfront money that was on the table on that night.

From that point on, we’ve never been closer to funding the gap– and that’s depressing on many levels.
At this point, the city can’t close the gap – either politically or fiscally really. While the city will put money into the convergence plans, the days of hoping the city will entirely close the gap are long gone. Thus, Marcos is missing the point.

With the city in the rearview mirror, the city and Kings both turned to the county.

When Q&R were rejected by the voters of the county, they turned to the state with the Cal Expo plan.

When the Cal Expo plan stalled out, they added another layer to the deal and called it the convergence plan.

Most likely, that plan won’t pass the state. I don’t know where the team and city go next to fill the gap. If they are just looking to higher levels of government … I guess it’s the federal government (that was sarcasm).

But really, when you step back. That’s the picture. Even since the blindside/walkout … the same gap has remained. If anything. It’s gotten bigger.

 

[fansinceday1]

So Larry, where do you think it goes from here?
I think the convergence plan is completely dead and with the County, City and Maloofs in major debt I think the NBA may take the opportunity to contract the Kings and the Grizzlies. The Maloof don't want to sell the team but if it came down to it they may have to sell the team to save their casino. Can the maloofs sell the team to the league and the league in turn just disband the team? The NBA has too many teams and it really needs to do something drastic to give the league a shot in the arm.

 

[JB_kings]

So Larry, where do you think it goes from here?
I think the convergence plan is completely dead and with the County, City and Maloofs in major debt I think the NBA may take the opportunity to contract the Kings and the Grizzlies. The Maloof don't want to sell the team but if it came down to it they may have to sell the team to save their casino. Can the maloofs sell the team to the league and the league in turn just disband the team? The NBA has too many teams and it really needs to do something drastic to give the league a shot in the arm.

That is a whole lot of guessing here. When did the convergence plan die? I missed that one. And I've never once heard mention of contraction of teams in the NBA from a credible source. I bet Stern would never consider this because there is no positive to this at all. A team just sold for over 400 million dollars and taking two of them to make one is about as unwise as it gets. Never gonna happen... Can you imagine Heisley or the Maloofs being told that they were going to lose their team to remove a debt that was a fraction of their worth in a sale? And not with cities waiting to get a chance at one of these teams.

 

[ArcoKings]

So Larry, where do you think it goes from here?
I think the convergence plan is completely dead and with the County, City and Maloofs in major debt I think the NBA may take the opportunity to contract the Kings and the Grizzlies. The Maloof don't want to sell the team but if it came down to it they may have to sell the team to save their casino. Can the maloofs sell the team to the league and the league in turn just disband the team? The NBA has too many teams and it really needs to do something drastic to give the league a shot in the arm.

I agree. I'm not saying that contraction will happen but sadly it is a possibility at this junture. Of course the ideal thing for us Kings fans would be for an ownership group to come in and buy the team from the Maloof family and move them close to San Jose for you guys up there or the Maloofs doing it. I just don't see a new arena being built. It wasn't built when the team was fabulous 8 years ago and during a healthy economy much less now with everything going on. The city of Sacramento and the State are basically broke and the Maloofs are going through some difficult economical times. I think the family genuinely wants to keep the Kings but they are running out of time and money. The Palms' expansion really did them in.

 

[bajaden]

I agree. I'm not saying that contraction will happen but sadly it is a possibility at this junture. Of course the ideal thing for us Kings fans would be for an ownership group to come in and buy the team from the Maloof family and move them close to San Jose for you guys up there or the Maloofs doing it. I just don't see a new arena being built. It wasn't built when the team was fabulous 8 years ago and during a healthy economy much less now with everything going on. The city of Sacramento and the State are basically broke and the Maloofs are going through some difficult economical times. I think the family genuinely wants to keep the Kings but they are running out of time and money. The Palms' expansion really did them in.

With people out there looking to aquire an NBA team, and willing to pay something close to 400 mil for one, why in the world would the NBA do away with a product of such value? Yes its possible the Kings will move if nothing is resolved on the stadium front. Its also possible that the Maloofs, if they have to, would sell the team. But I think they would have to be in serious finanical trouble for that to happen. But I see no logic behind simply disbanding two teams to create one. Even if the NBA owners were to agree to it, you'd never get the players union to go along with it.

 

[Bricklayer]

No, Marcos was never really against this, it was R.E. Graswich.

Oh no -- time heals of course, but Breton was a HUGE Maloof/public money basher back in the Kings prime, and got very personal in his attacks on the Maloofs as selfish monyegrubbers out to bilk the taxpayers when they should just build it entirely on their own. Strange thing though -- he apparently had a change of heart almost overnight back there maybe 2005 or so. I've always wondered about that -- did he suddenly realize that the Kings might actually leave, and his job would go with it? It was odd.

Graswich, from my memory of him, was just an insufferable *** in all ways and is not worry of further conversation. Some people just are a waste of air.

 

[Bricklayer]

So Larry, where do you think it goes from here?
I think the convergence plan is completely dead and with the County, City and Maloofs in major debt I think the NBA may take the opportunity to contract the Kings and the Grizzlies. The Maloof don't want to sell the team but if it came down to it they may have to sell the team to save their casino. Can the maloofs sell the team to the league and the league in turn just disband the team? The NBA has too many teams and it really needs to do something drastic to give the league a shot in the arm.

I always get a kick out of fans and media with their contraction talk, since it is quite apparent that nothing has ever been further from the NBA's minds. The NBA may not survive in Sacramento (leaving Sacramento as one of the largest media markets in the country without a team), it may not survive in Memphis. But there is always Kansas City, or Anaheim, or San Jose, or...plenty of places to move a franchise to with buildings already in place. Talk of contraction is just fantasy.

 

[Superman]

So Larry, where do you think it goes from here?
I think the convergence plan is completely dead and with the County, City and Maloofs in major debt I think the NBA may take the opportunity to contract the Kings and the Grizzlies. The Maloof don't want to sell the team but if it came down to it they may have to sell the team to save their casino. Can the maloofs sell the team to the league and the league in turn just disband the team? The NBA has too many teams and it really needs to do something drastic to give the league a shot in the arm.

How does selling the Kings save the Palms?

 

[kupman]

Oh no -- time heals of course, but Breton was a HUGE Maloof/public money basher back in the Kings prime, and got very personal in his attacks on the Maloofs as selfish monyegrubbers out to bilk the taxpayers when they should just build it entirely on their own. Strange thing though -- he apparently had a change of heart almost overnight back there maybe 2005 or so. I've always wondered about that -- did he suddenly realize that the Kings might actually leave, and his job would go with it? It was odd.

Graswich, from my memory of him, was just an insufferable *** in all ways and is not worry of further conversation. Some people just are a waste of air.

Thanks for setting the record straight. I have no earthly idea what Breton's take on the situation actually is given that he voices very different opinions at different times. Nor do I really care what he thinks.

On top of that, why does the Bee run stories and opinion pieces where there is no news. It's like they run out of stuff to write about so the just bring back old topics with no new developments. Besides, the propasal on the table right now requires little subsidy by design and no public vote by design.

I think the point of the piece was to fill paper space more than anything else.

In other news, the economy is not very good.

 

[Capt. Factorial]

How does selling the Kings save the Palms?

To answer your rhetorical question (not for your sake, but for others'), it does not. The Maloofs are very careful - sticklers you might say - about keeping their business interests completely separate in a financial sense. Profits from the Palms do not go towards the Kings' operating expenses, or vice versa, and the same goes for debts. The Maloofs have been very open and very clear about this point.

Honestly, the last thing we need to worry about as Kings fans is the Maloofs' financial situation outside of the Kings. It doesn't matter whether or not they sold the beer distributorship, and it doesn't matter whether or not the Palms is in trouble. All that matters is that the Kings can get enough revenue to put a basketball team on the floor and, tied closely in to that, whether or not a new arena can be secured. In the end, the revenue issue comes down to the arena. If an arena deal can get done, the Kings will stay for the long term. If an arena deal cannot get done, the Maloofs will probably eventually move the franchise. Not this year, not next year, maybe not even in five years, but it will happen if an arena does not get done. The Maloofs aren't selling (they love being basketball owners) and they aren't moving the franchise without a fight (they've been very clear about this too). That's your bottom line. The Maloofs will continue to own the franchise, they want to be in Sacramento, and they will work hard to secure an arena deal on which the future of the team in Sacramento hinges. Everything else - the Palms, the beer distributorship, etc. - is a red herring.

 

[fansinceday1]

How do you figure everything outside of the kings is a red herring?
Maybe im wrong but I think the sale of the beer distributorship, the palms, and the kings are all related because they all have to do with the maloofs.
I don't care how hard the maloofs try to keep them seperate, if the kings continue to tread water or the casino is taken over by harrahs corp. each will effect what happens with the other. The maloofs sold the beer distributorship (their cash cow) to maintain ownership of their casino. Im wondering which entity they value more, the kings or the casino? Which one will eventually bring them back to where they were? I would say the casino. The Maloofs have spent upward of $850 million on the towers in Vegas. When they restructured their loan on that amount the beer dist. was sold as a condition of the restructuring. You think that will not effect what happens with the kings? What about next March when another $350 million comes due? You don't think what happens with that chunk of change will directly effect what goes on with the kings?

With regards to contraction, that was just me thinking aloud, or should I say typing aloud.
My opinion of the NBA is they have too many teams. Contraction would do the league good. I agree that the players union would put up a helluva fight and no matter how good it is for the league Stern probably wouldnt go for it cause he would preceive it as failure.

And yes I think the convergence plan is dead. I think im a lot closer to being right than your are JB. As I said before, with the state, city, and maloofs being in such dire financial trouble I don't feel im going out on much of a limb. There is an ice cubes chance in hell the state is gonna let a loser of an idea like swapping cal expo for a smaller parcel in a flood plain so sacramento could build an arena. It just lacks all common sense. So yes, its dead, and that really sucks cause I don't see an alternate site that the maloofs are willing to settle for.

 

[PurpleHaze]

QUE=fansinceday1;769420]Which one will eventually bring them back to where they were? I would say the casino.
I guess we will find out March of next year, when the other large chunk of debt comes due on the palms expansion.[/QUOTE]

I don't think it's a red herring either. And the ides of March will further be ominous since that's the month when NBA team owners can submit letter of intent to move a franchise. I don't think the Malooff's file papers then but it would not be totally out of the queston if arena situation remains hopelessly stalled and/or economy continues to tail-spin. I've said it before as have others; professional sports owners don't buy teams looking for a big-time cash cow. It's a hobby, a play thing, a status symbol in the world of extremely wealthy barons, mogols, playboys. You can only strike it rich or get any decent return on investment when you sell - look at recent situation with Golden State Warriors. If Maloofs are really-really hurting for dough in the future (maybe not too distant) it's the Kings that go on the block to raise necessary big capital to stay afoat, or move the team, or just happily retire to Las Vegas which looks like the master plan all along - Kings or no Kings in the family back pocket

 

[Superman]

How do you figure everything outside of the kings is a red herring?
Maybe im wrong but I think the sale of the beer distributorship, the palms, and the kings are all related because they all have to do with the maloofs.
I don't care how hard the maloofs try to keep them seperate, if the kings continue to tread water or the casino is taken over by harrahs corp. each will effect what happens with the other. The maloofs sold the beer distributorship (their cash cow) to maintain ownership of their casino. Im wondering which entity they value more, the kings or the casino? Which one will eventually bring them back to where they were? I would say the casino. The Maloofs have spent upward of $850 million on the towers in Vegas. When they restructured their loan on that amount the beer dist. was sold as a condition of the restructuring. You think that will not effect what happens with the kings? What about next March when another $350 million comes due? You don't think what happens with that chunk of change will directly effect what goes on with the kings?

I do think that they are related, to an extent, but what I don't understand is how selling the Kings, the more viable enterprise, would save the Palms. The Maloofs may love Vegas and their ventures there, but they are also businessmen, and one unbreakable rule is "don't throw good money after bad". So even if they could sell the Kings and put $75 million into the Palms from that transaction (based on estimates that the Kings are worth about $300 million, and up to 75% of the franchise is financed), indications are that $75 million isn't enough to make the Palms profitable and viable in the long run.

Meanwhile, the Kings are appreciating, and are poised to put some good seasons together, and there's going to be a new CBA coming out that might bring additional sources of revenue to small market teams, and you think the Maloofs would sell the Kings to save the Palms? First, the Kings are too heavily leveraged to produce enough capital to "save the Palms," and secondly, selling the Kings would be a stupid business decision, even if it meant losing the casino.

The beer distributorship, on the other hand, while viable, wasn't something the Maloofs were really attached to. It also probably generated a lot more capital than $75 million or so.

 

[JB_kings]

How do you figure everything outside of the kings is a red herring?
Maybe im wrong but I think the sale of the beer distributorship, the palms, and the kings are all related because they all have to do with the maloofs.
I don't care how hard the maloofs try to keep them seperate, if the kings continue to tread water or the casino is taken over by harrahs corp. each will effect what happens with the other. The maloofs sold the beer distributorship (their cash cow) to maintain ownership of their casino. Im wondering which entity they value more, the kings or the casino? Which one will eventually bring them back to where they were? I would say the casino. The Maloofs have spent upward of $850 million on the towers in Vegas. When they restructured their loan on that amount the beer dist. was sold as a condition of the restructuring. You think that will not effect what happens with the kings? What about next March when another $350 million comes due? You don't think what happens with that chunk of change will directly effect what goes on with the kings?

With regards to contraction, that was just me thinking aloud, or should I say typing aloud.
My opinion of the NBA is they have too many teams. Contraction would do the league good. I agree that the players union would put up a helluva fight and no matter how good it is for the league Stern probably wouldnt go for it cause he would preceive it as failure.

And yes I think the convergence plan is dead. I think im a lot closer to being right than your are JB. As I said before, with the state, city, and maloofs being in such dire financial trouble I don't feel im going out on much of a limb. There is an ice cubes chance in hell the state is gonna let a loser of an idea like swapping cal expo for a smaller parcel in a flood plain so sacramento could build an arena. It just lacks all common sense. So yes, its dead, and that really sucks cause I don't see an alternate site that the maloofs are willing to settle for.

So now you are saying that YOU like the idea of contraction. As far as I can tell, you have no stake in team ownership and what your feelings are is far apart from reality. As for "thinking" the conversion plan is dead. I'm not saying it's going to happen and not saying it's dead. Like most all of us here, you are waiting to hear more details. It's not an easy plan and might be a long shot. But it's not dead yet. You are made claims like the NBA contraction thing, and it's just your feelings. Not sure where you feel you are being more right.

 

[Trueblood]

How does selling the Kings save the Palms?

It's been speculated that the Maloofs may have to choose between one or the other. They haven't been very public with where they stand financially but when some financial people have crunched numbers, they have concluded that it's POSSIBLE that they will have to sell one or the other if things don't get better. Hopefully, it won't come to that.

 

[Trueblood]

I agree. I'm not saying that contraction will happen but sadly it is a possibility at this junture. Of course the ideal thing for us Kings fans would be for an ownership group to come in and buy the team from the Maloof family and move them close to San Jose for you guys up there or the Maloofs doing it. I just don't see a new arena being built. It wasn't built when the team was fabulous 8 years ago and during a healthy economy much less now with everything going on. The city of Sacramento and the State are basically broke and the Maloofs are going through some difficult economical times. I think the family genuinely wants to keep the Kings but they are running out of time and money. The Palms' expansion really did them in.

If that happens, then I have to think that Stern will try to talk the Maloofs into selling the team to Larry Ellison and he'll move it to San Jose.

Ellison has been left at the NBA altar twice now. He actually outbid Clay Bennett for the Sonics. Bennett bought the team for $350 million but Ellison actually offered $425 million. Stern wanted to reward OKC for their support of the Hornets so he had Schultz sell to Bennett.

Depending on who you believe, Ellison may have actually outbid Lacob/Guber for the Warriors but they say his bid came too late. I don't buy it. If Cohan really wanted the top bid, there wouldn't have been a deadline. He would've just had them keep on bidding 'til there was just one man standing. Cohan wanted to stick it to Ellison so his "deadline" was just a way to get a bidding war going between a bunch of parties to guarantee getting a fat selling price without having to sell it to Ellison.

Long story short, if the Maloofs sell, Stern is going to try and help Ellison if Ellison isn't sick of the process already.

Regarding contraction, it won't happen on Stern's watch. There are still too many domestic options out there. Vancouver, Anaheim, San Jose, Kansas City and even Seattle, if they get their act together, can all take on struggling teams.

 

[Circa_1985_Fan]

If that happens, then I have to think that Stern will try to talk the Maloofs into selling the team to Larry Ellison and he'll move it to San Jose.

Ellison has been left at the NBA altar twice now. He actually outbid Clay Bennett for the Sonics. Bennett bought the team for $350 million but Ellison actually offered $425 million. Stern wanted to reward OKC for their support of the Hornets so he had Schultz sell to Bennett.

Depending on who you believe, Ellison may have actually outbid Lacob/Guber for the Warriors but they say his bid came too late. I don't buy it. If Cohan really wanted the top bid, there wouldn't have been a deadline. He would've just had them keep on bidding 'til there was just one man standing. Cohan wanted to stick it to Ellison so his "deadline" was just a way to get a bidding war going between a bunch of parties to guarantee getting a fat selling price without having to sell it to Ellison.

Long story short, if the Maloofs sell, Stern is going to try and help Ellison if Ellison isn't sick of the process already.

Regarding contraction, it won't happen on Stern's watch. There are still too many domestic options out there. Vancouver, Anaheim, San Jose, Kansas City and even Seattle, if they get their act together, can all take on struggling teams.

Vancouver, really?? Deja Vu...Um...read the sign...Canucks...everything else is second rate support in that city...as was apparent by the empty seats you can clearly see...IMO you can cross them off any NBA team's list of potential homes. I think KC would be the likely, and very ironic destination.

 

[kennadog]

There's little to no chance for Seattle, either. They aren't going to build a new arena. Or at least it's extremely unlikely they will build one.

 

[Circa_1985_Fan]

There's little to no chance for Seattle, either. They aren't going to build a new arena. Or at least it's extremely unlikely they will build one.

Yup...and I REALLY wonder how David Stern would like the Kings being the '2nd team' to the Sharks?? San Jose, as funny and annoying as I find it(being a lifelong Canuck fan)has turned into a HUGE mecca for the NHL. So the Kings wouldn't even be a close 2nd fiddle there. Making KC, who already has an arena, being the most likely destination.(although I've heard that not EVERYONE in KC really WANTS the Kings back)...but that's the destination that makes the most sense.(and PLEASE don't play the Vegas card with me again, I'm SICK of explaining why pro sports won't be there for quite some time)

 

[kennadog]

Well Kansas is certainly NBA ready right now, with their new arena. Built completely with public money.