News from the NBA BOG meeting - April 2012

[Glenn]

I'm not going to get drawn into a spiral of negative thinking and doomsday rhetoric, Circa. Just can't do it. I've gone far enough to the dark side with my personal animosity towards all things Maloof. I will continue to believe Stern and KJ can and will get the job done.

I have faith that Stern wants his name to go down in history without a blemish. Having a team move from a city that was willing to build an arena and has avid fans likely to fill the arena if the owners provide a good team is hardly a grand achievement. At this point, the Maloofs look like the bad guys and if he was to facilitate the bad guys winning, it would be almost un-American. :include a silly smirk:

 

[VF21]

I’m not that excited.

It’s not just the 3 million dollars in predevelopment costs. The Maloofs said they have an unspecified objection to the 30 year lease, and if they shorten that term AEG’s financial commitment has to go down. Plus, Peaches has said the Maloofs are negotiating really hard on the revenue streams going to the city and AEG. I don’t think the city has any more leverage, and the Maloofs are dropping fire bombs about their being very concerned about the general fund and STOP. It looks like they want KJ to put more up for a vote, so it can fail. Or, they can push AEG so hard that they walk away.

KJ wanted to come, but Stern told him he didn’t need to come. Stern believed this turned on whether the BOG was satisfied with the representations of Stern and Bennett that the deal was fair the Maloofs agreed to the frame work. That was the Maloofs attack. We didn’t make this deal, it’s unfair, would you take it?

After that argument, KJ has been called in from the bull pen. Possibility, to meet only with the Maloofs. To me, that’s not real encouraging. It sounds like owners backing owners broke through at least some of Stern’s fire wall. Best case, the BOG gave the Maloofs counter instructions on the split of the predevelopment costs, perhaps the Maloofs not having to cover AEG’s share and somebody picking that 1.5 up, and instructions to get back to work. If that’s the case, the owners club tried to find a middle ground but rebuked the commissioner, emboldened the Maloofs, and the city has to deal with open ended bargaining with a party that can’t remain her with no assurances Stern can save the city.

Total guess. I would say the odds of the team staying down to 30%.

Oops. I knew it wouldn't last.

Sorry, but I disagree with your assumptions on what may have happened. I do not believe the owners rebuked the commissioner and emboldened the Maloofs, especially in light of the numerous tweets by various media folk today on how many different owners they had talked to who were pretty clear about their desire to see the Kings stay in Sacramento. I do not think the Maloofs are well liked by most of the owners, and I don't think they're going to get blind support.

 

[Circa_1985_Fan]

I have faith that Stern wants his name to go down in history without a blemish. Having a team move from a city that was willing to build an arena and has avid fans likely to fill the arena if the owners provide a good team is hardly a grand achievement. At this point, the Maloofs look like the bad guys and if he was to facilitate the bad guys winning, it would be almost un-American. :include a silly smirk:

I would LOVE to believe...I really would! But right now I am feeling the fear of the unknown. Hey.
..KJ has the best interest of Sacramento in his hands, who knows what other bombshells he mighy drop before this is all said and done. I mean c'mon, did any of us know who Ron Burkle was before he dropped that bomb a year ago?? What's next KJ??

 

[Larry David]

Oops. I knew it wouldn't last.

Sorry, but I disagree with your assumptions on what may have happened. I do not believe the owners rebuked the commissioner and emboldened the Maloofs, especially in light of the numerous tweets by various media folk today on how many different owners they had talked to who were pretty clear about their desire to see the Kings stay in Sacramento. I do not think the Maloofs are well liked by most of the owners, and I don't think they're going to get blind support.

You could totally be right. I was asked to guess, so I guessed.

 

[Glenn]

I would LOVE to believe...I really would! But right now I am feeling the fear of the unknown. Hey.
..KJ has the best interest of Sacramento in his hands, who knows what other bombshells he mighy drop before this is all said and done. I mean c'mon, did any of us know who Ron Burkle was before he dropped that bomb a year ago?? What's next KJ??

A signed check from Ronald Burkle for the fair market value of the Kings. As they have minimal value in players and minimal value in an arena, it might not even take much, er, relatively speaking.

 

[kennadog]

Well, the BOG can't force the Maloofs to sell. That would be expected from other owners. I believe I saw a tweet or something in here that said the Maloofs presented some "good questions" about the deal. But if any of the questions are as big as this first one over pre-development costs, I feel a little sick. It could mean months of hammering out the details.

KJ cannot approve or agree to anything by himself. We can't afford to lose any council member votes, because they just don't trust the Maloofs or are just not going to agree to give up more from the city or expect less from the Maloofs. The roadblocks the Maloofs have thrown up this last week are huge. The city is going to have to protect itself. At issue here is that pre-development money is always the riskiest money in any development deal. You can spend millions and end up with no project. Personally, if the Maloofs are committed to Sacramento, then they should be more than willing to shoulder risk, right along with the city.

As far as AEG goes, that should be between AEG and the Maloofs. AEG stepped in with a larger overall contribution of funds when the Maloofs balked. Besides, paying AEG back after construction is underway assures the Maloofs that the riskiest part is over for all parties then, anyway.

As much as I want this arena, I don't think the City should have to take most of the risk. One of the biggest risks is just these Maloof clowns, who appear, so far, to want to throw a monkey wrench into the deal at any time, apparently.

I am so tired of the Maloofs. They have no good will left with me and maybe not with an entire city. I won't give in to it, because that is what the Maloofs want. They want the city to be so tired of dealing with them, that the city will say "go screw with some other city." All that keeps me going is love for the Kings. As far as I'm concerned, it's really more my team, than the Maloofs. So quite screwing with me Maloofs.

If the team ultimately stays, it will be no thanks to the Maloofs and I will never applaud them at a game in the new arena.

 

[ParniValjak]

I highly doubt KJ going to NY is sale related. Selling or buying an NBA team is a long and complex process and can last months, sometimes even a year. I would be jumping for joy if Maloofs are selling to an owner that has the money and knows how to make money but that is just wishful thinking at this stage.

I am not sure what to read into this KJ to NY story after he specifically said he will not be attending as he considers this an issue between the Kings and the NBA. It can't be to re-negotiate because there is another party in AEG that has not been reported to be attending tomorrow. Maybe its a PR campaign to play nice and get this thing back on track where they take photos for the media with fake smiles while saying under their breath "I will crush you like a cockroach!"

I guess we will find out more tomorrow but if KJ is called in last minute, I am erring on the side of caution here. When he blew everyone away last year he had a number of weeks to prepare and get his surprises together. This all appears last minute and I am not sure if he has another ace or 2 up his sleeve. Hopefully he does but it might not be looking promising.

But then if the reports are true that Stern organized a surprise KJ trip to NY then it could be a good thing where he would have given him some time to prepare and advise him what he expected from KJ at the meeting. Its becoming more and more apparent that Maloofs are losing support from the NBA and other owners but they cannot be seen publicly to be against one of their own. Hopefully this is one of those backroom deals between the NBA, the other owners and KJ to make things to difficult for the Maloofs to the point where they have no other choice but to sell. Maybe not now, maybe not in 3 months but in 1-2 years to make it impossible for them to remain owners of the team.

 

[kennadog]

Since KJ has no power to change anything in the MOU, I'm thinking this might be a meeting set-up to save the Maloofs some embarrassment. Maybe the owners think its a good deal and Stern just wants to allow the Maloofs to back down in private and have it look like they actively participated in a settlement to the issues.

That's my attempt to put a positive spin on what's happening.

 

[Kingster]

I keep hoping/thinking/praying that the NBA has invested too much time, effort and pr to let the Maloofs unravel the ball of twine. They just can't believe that a piece of twine unwound here, another unwound there, won't unravel the entire thing. They negotiated a cohesive whole. They just can't allow the Maloofs to piecemeal their creation.

 

[jpsls]

The deal should not be re-negotiated under any circumstances. If the Kings leave, so be it. You give the Maloofs an inch, they will take a mile. Guarantee it.

Stand firm KJ.

 

[fansinceday1]

The deal should not be re-negotiated under any circumstances. If the Kings leave, so be it. You give the Maloofs an inch, they will take a mile. Guarantee it.

Stand firm KJ.

I agree. Ive been pretty down on the city govt in the past but in this instance, they have done what they had to do. They took care of business and the maloofs are the ones who have played spoiler. If the kings end up leaving I don't think anyone can blame the mayor or the city council.
Do not negotiate a new deal with these snake oil salesmen. They can't be trusted to negotiate in good faith.

 

[kpm308]

I keep hoping/thinking/praying that the NBA has invested too much time, effort and pr to let the Maloofs unravel the ball of twine. They just can't believe that a piece of twine unwound here, another unwound there, won't unravel the entire thing. They negotiated a cohesive whole. They just can't allow the Maloofs to piecemeal their creation.

My theory about this whole situation is that the Maloofs see the same thing, both the NBA and the city of Sacramento have invested too much time and effort to let this fail, so they are just going to be a pain in the *** for a while, which is basically the only leverage they have, and see what they can get out of it. So they go to the owners with a sob story about getting a raw deal, and appeal to their compassion to see how much more they can get out of paying. The NBA has a lot invested in setting a precedent for cities to pay a majority or the costs of new arenas. There are 30 teams which eventually will need a new arena, so if they can get a model of a city paying up its share, and the NBA and Ownerships paying a little into the pot to get it done, they are all for it. So I think the whole situation with Johnson coming tomorrow is more of a "how much more can you throw in and how much can we do to make the children (Maloofs) quit crying and just move on."

On the Maloofs side of the argument, they are already broke, they don't really have any illusions of being good businessmen that they are trying to uphold, so if they can kick and scream and end up with a few million more in their pockets, even if it makes them look bad, its worth it for a few million, which means a lot more to them than it does the other two parties.

 

[Livinthedream]

The deal should not be re-negotiated under any circumstances. If the Kings leave, so be it. You give the Maloofs an inch, they will take a mile. Guarantee it.

Stand firm KJ.

I agree. My concern has gone from losing the Kings, to worrying that we may give in to the Maloofs.

 

[upinsmoke]

They all probably just want to hi-five with him for a while...

Winner.
Maloofs are getting done in from one of our own born and raised. Give em hell KJ!

 

[Kingster]

My theory about this whole situation is that the Maloofs see the same thing, both the NBA and the city of Sacramento have invested too much time and effort to let this fail, so they are just going to be a pain in the *** for a while, which is basically the only leverage they have, and see what they can get out of it. So they go to the owners with a sob story about getting a raw deal, and appeal to their compassion to see how much more they can get out of paying. The NBA has a lot invested in setting a precedent for cities to pay a majority or the costs of new arenas. There are 30 teams which eventually will need a new arena, so if they can get a model of a city paying up its share, and the NBA and Ownerships paying a little into the pot to get it done, they are all for it. So I think the whole situation with Johnson coming tomorrow is more of a "how much more can you throw in and how much can we do to make the children (Maloofs) quit crying and just move on."

On the Maloofs side of the argument, they are already broke, they don't really have any illusions of being good businessmen that they are trying to uphold, so if they can kick and scream and end up with a few million more in their pockets, even if it makes them look bad, its worth it for a few million, which means a lot more to them than it does the other two parties.

The thing is, you give them an inch, they'll be taking a mile. They'll just keep coming back over and over again to negotiate all kinds of things. The NBA and Sacto need to stand firm and not be the patsies here.

 

[Larry David]

Since KJ has no power to change anything in the MOU, I'm thinking this might be a meeting set-up to save the Maloofs some embarrassment. Maybe the owners think its a good deal and Stern just wants to allow the Maloofs to back down in private and have it look like they actively participated in a settlement to the issues.

That's my attempt to put a positive spin on what's happening.

Very possible and the best case. Maybe it's the league will cover the cost because the office blind sided them with the term, but the rest is fair.

Hope so

 

[ParniValjak]

Very possible and the best case. Maybe it's the league will cover the cost because the office blind sided them with the term, but the rest is fair.

Hope so

It's probably the case but wouldn't necessarily be the best case. The best case would be for KJ to go over the to tell his side of the story where he once again blows everyone out of water and it leaves Maloofs with no choice but to sell.

Wishful thinking I know but where there is life there is hope. Let be real here, I am not sure what the term of the agreement in terms of the incoming revenue are between the Kings, AEG and City of Sacramento but SURELY they cannot be as bad as the deal Maloofs had lined up with Anaheim this time last year. That was a shocker where the revenue stream for the Kings was minimal. Now there is no way that this aspect is not significantly better with this deal but the Maloofs still are not happy.

I just hope than somehow, some way Kings remain in Sacramento under new, more financially viable ownership even if the Arena opening is postponed by 12 months until the 2016-2017 season. IMHO, still better than the 2015-2016 season under current ownership.

 

[Arkitect]

One thing that has not been mentioned much is the fact that the team by some reports owe the NBA $100 million dollars. Obviously the terms of the line of credit are unknown, but I can't believe the NBA is going to let the Maloofs dictate anything. That money went somewhere and it came from somewhere. I know the Maloofs are gamblers, but they are currently at least $100 million in the hole between the NBA line of credit and the payments on Arco. They are too far in. It really appears to me that they cannot afford to continue owning an NBA franchise especially with the large capital expenditure required to get a new arena build. But the problem is they have too much pride to realize they are going to only get themselves deeper in debt the long they hold on to this team. They know that they need to turn the franchise into a high profit earner and they know that won't happen in Sacramento even with a new arena. But I really think we are getting close to game over here. The Maloofs are down by 5 with 20 seconds left. The city needs to play solid defense for a little while longer, and I think we win the game. Barring a miracle, I don't think the Maloofs will be the majority owners of this team in a year. The numbers just do not add up for them.

 

[JB_kings]

Numbers do not add up for them. Of course being that the only business related income they have left is derived from the Kings, they are not like other owners in the NBA. They can't afford to break even or lose money - in the current arena or a new one. Unfortunately I don't see Stern having the ability to force them to sell their team. He can advise them that this is a good deal as is and strongly suggest they accept and put forward the funding. Trying to box them into this deal is his best move. It could force their hand - eventually. But while that plays out, we'll probably have to suffer these clowns for longer than anyone would like.

 

[rainmaker]

Is anyone here familiar with the installment process of the $73M the Maloofs will put into the arena? I would think that might determine how long until they consider selling. If a good chunk of that 73M would be due in the near future that could be problem they just might not have another answer for.

 

[Dreamtiger]

As expected, KJ will be holding his ground tomorrow:

http://blogs.sacbee.com/city-beat/2...cramento-will-not-renegotiate-arena-deal.html

 

[kennadog]

Is anyone here familiar with the installment process of the $73M the Maloofs will put into the arena? I would think that might determine how long until they consider selling. If a good chunk of that 73M would be due in the near future that could be problem they just might not have another answer for.

Well, they have to put in in upfront. I'm not sure of the exact timing, but I am pretty sure it has to be all in before construction is done and probably before. I'm assuming the pre-development costs were included in the $73 million.

 

[Dreamtiger]

should've posted this-- the actual letter:

http://www.sacbee.com/2012/04/12/4410968/open-letter-from-mayor-johnson.html

 

[kennadog]

As expected, KJ will be holding his ground tomorrow:

http://blogs.sacbee.com/city-beat/2...cramento-will-not-renegotiate-arena-deal.html

WTG, Mayor KJ! I'm 100% behind your statements in this letter.

 

[Hoovtrain]

should've posted this-- the actual letter:

http://www.sacbee.com/2012/04/12/4410968/open-letter-from-mayor-johnson.html

Sh*t just got real.

 

[Warhawk]

WTG, Mayor KJ! I'm 100% behind your statements in this letter.

Ditto that. Well done, Mr. Mayor!

 

[Hoovtrain]

Ditto that. Well done, Mr. Mayor!

I would love to be a fly on the wall at that sit down tomorrow.

 

[VF21]

I may have to move back to Sacramento. I want to be able to vote for Kevin Johnson! Talk about telling it like it is.

 

[Dreamtiger]

The fact that he mentioned the conversation that he had with Stern earlier in the day implies that Stern gave him the go ahead to stand his ground. The Maloofs are backed into a corner, and as KJ said, the ball is in their court. Obviously, they can't do the deal or they wouldn't have pulled all this crap over the last two weeks. So they sell, or they sue. Can there be any other options at this point?

 

[VF21]

The fact that he mentioned the conversation that he had with Stern earlier in the day implies that Stern gave him the go ahead to stand his ground. The Maloofs are backed into a corner, and as KJ said, the ball is in their court. Obviously, they can't do the deal or they wouldn't have pulled all this crap over the last two weeks. So they sell, or they sue. Can there be any other options at this point?

Yes, there's another option. The Maloofs, having tried to bluff and failed, bow to the inevitable and do the deal. And if they don't have the money, they are in breach of contract and have to sell.

You say they can't do the deal or they wouldn't have pulled all this crap. I don't agree. I think they tend to pull crap when they don't need to, much as a kid will sometimes lie when telling the truth would actually be easier.