Stern: Kings will make substantial financial contribution to arena deal

[Mike0476]

http://www.sacbee.com/2012/02/21/4281642/stern-kings-will-make-substantial.html

National Basketball Association Commissioner David Stern on Tuesday said the Sacramento Kings owners have agreed to make a substantial contribution to the city's $387 million arena deal, but he did not disclose how much. Stern said he expects negotiations between the league and city to continue into the weekend.

"The team has agreed to a substantial contribution, both directly from itself, but also by catalyzing AEG to be interested. In effect, whatever money AEG puts in is because of give-backs by the team ... so we see that as a team contribution," Stern said. "Whether it ultimately closes all the gaps, we'll know as we negotiate continuously and I fully expect that we will be negotiating in Orlando (this weekend when team and city representatives meet for the All-Star game)"

Sacramento is another step closer to building a new downtown arena as it will do so much good for our city.

Let the hating begin from the CAVE trolls.

#FANS

 

[Brac-o-matic]

Sweet! Getting more optimistic about the Tuesday vote by the hour...

 

[xyrin]

Is this necessarily positive? Stern makes it sound like whatever AEG puts in is just going to count for the Maloofs as well. We were throwing around numbers like 50 million from AEG and 85 from the Maloofs, but it almost sounds like Stern is saying "The Maloofs are bringing AEG into this, so AEG's 50 million will count as part of the Maloof 85 million". Hopefully that isn't the case.

 

[BMiller52]

Is this necessarily positive? Stern makes it sound like whatever AEG puts in is just going to count for the Maloofs as well. We were throwing around numbers like 50 million from AEG and 85 from the Maloofs, but it almost sounds like Stern is saying "The Maloofs are bringing AEG into this, so AEG's 50 million will count as part of the Maloof 85 million". Hopefully that isn't the case.

+1. We need those numbers to kind of come through just to get to our total price tag. I mean if AEG puts up 50 mill, and the Maloofs think they only are going to come up with 30, we are gonna be hella short money wise.

 

[ParniValjak]

Is this necessarily positive? Stern makes it sound like whatever AEG puts in is just going to count for the Maloofs as well. We were throwing around numbers like 50 million from AEG and 85 from the Maloofs, but it almost sounds like Stern is saying "The Maloofs are bringing AEG into this, so AEG's 50 million will count as part of the Maloof 85 million". Hopefully that isn't the case.

Thats the impression I am getting as well but I really hope I am wrong! Would love nothing more than to get it done. Ut to me this sounds like Stern siding with the Maloofs! I was kind of secretly hoping to get Stern to like the proposal and tell Maloofs to pay up and if they say that they can't afford it, then force them to sell to Burkle! Win for everyone except the Maloofs who are just not NBA rich!

 

[VF21]

Sorry, I disagree. I think some of you are reading way too much into the comments.

 

[The Hammer]

Thats the impression I am getting as well but I really hope I am wrong! Would love nothing more than to get it done. Ut to me this sounds like Stern siding with the Maloofs! I was kind of secretly hoping to get Stern to like the proposal and tell Maloofs to pay up and if they say that they can't afford it, then force them to sell to Burkle! Win for everyone except the Maloofs who are just not NBA rich!

Ok ok calm down. Can't anybody read political gestures???

Stern is a politician. And he's politicking very well for us right now. What this does is remove more obstacles to the vote. That's what this whole statement is about. It pre-emptively nullifies arguments that "the playboy rich kids are getting drunk on the city dime" type of crap. That they are taking a handout. Big man New York Stern framing the AEG money as "essentially a team contribution" is a fantastic maneuver. Stern's persona and word is so much weightier than any nancy podunk sac city council member or flaming caver at the mic next Tuesday. These words will be hanging in the air like a blimp over the super bowl. Anybody starts whining on in that other direction and anybody has to do is point to this quote. It's brilliant actually.

You see how Stern often does things. It is often half the statement first, then the hard facts later. He gets high mileage out of good news. His timing is immaculate, and so well thought out. He makes this statement, but gives no hard number... so there's no hard amount to argue against too early. Then only when it is most expedient will the hard number be revealed, so that the impact can be greatest... and it sounds as though they will roll the AEG into that number and give some kind of high felutant way of explaining that. (Which, technically, is true.) AEG is basically fronting for team money, on team credit so to speak. The exact right thing to do is highlight the equity/pulling power/hard dollars that the "Kings"/Maloofs are "bringing to the table", when asking for city money.

 

[jdbraver]

I'd like to have seen his body language when he said it, but it doesn't sound good.

 

[kennadog]

Sorry, but I don't like the statement,

"In effect, whatever money AEG puts in is because of give-backs by the team ... so we see that as a team contribution,"

Sure, it may be a negotiating ploy, but I still don't like that statement. The term sheet should be available to the council members for the city's agenda by Monday. That's actually pretty late notice for them to have time to review it and the ramifications.
i also wonder if it will answer the really big questions of back-filling the missing parking revenue and the pay back of the current arena's loan. Some council members may vote no or postpone the vote, until those question can be answered.

 

[Larry David]

Uh, this doesn't look so good. Just when it looked like things were rolling, we get this.

We're 6 days out, in order to avoid fence sitters couching a "no" vote behind, "I want to do this, but it's just too rushed and not a firm deal", they need to have the term sheet out to not just the counsel, but the public by Friday or Saturday.

KJ's been pushing hard to nail down 50 from AIG, cost over runs from Taylor, 80 from the NBA / Kings, and how to replace 9 million to the general fund ... AND get 4 other votes to pass this thing. It looks like the first two are done and I think they can come up with something on item 4, but if it's not solid and something that Cohn likes, no deal.

Sure it's a deal and its Stern's job to make the best deal but: (1) KJ said he wanted to deliver the term sheet Thursday. The story is talking about KJ flying out to Orlando to get the final number he wants this weekend. Rushed is bad for getting 5 yes votes; (2) the deal doesn't seem to have much/any margin. And any difference would fall to the city's end; (3) the Kings are getting a smoking deal at 80 over 30. If they try to put that down somewhere between 50-30 million over 30 years, with the city having to make up the difference, it shouldn't matter, but the relationship with the Maloofs is so toxic it could either kill a deal or again give a no vote cover. And I'm talking mostly about Cohn, who voted against both the Kings Loan and was doing press confereces against Q & R on day one. Stern might really lose Cohn; (4) the idea of AIG's money is our money is just insluting.

I think Stern is looking at there being 5-6 yes votes and he's trying to get the best deal for his owners at this point by trying to take 10-20 million off the top. The fact is that he's got a thin margin on KJ's deal and this crap could kill the deal and cause somebody like Cohn to say, this is never going to work. I'm done.

Stern is great at what he does. But as we've seen here and in Seattle, he's not so good at reading local politics. And he's getting some info from the Maloofs, who might be two of the most tone deaf people on this issue in the region.

Next, six days will be interesting.

 

[BMiller52]

Uh, this doesn't look so good. Just when it looked like things were rolling, we get this.

We're 6 days out, in order to avoid fence sitters couching a "no" vote behind, "I want to do this, but it's just too rushed and not a firm deal", they need to have the term sheet out to not just the counsel, but the public by Friday or Saturday.

KJ's been pushing hard to nail down 50 from AIG, cost over runs from Taylor, 80 from the NBA / Kings, and how to replace 9 million to the general fund ... AND get 4 other votes to pass this thing. It looks like the first two are done and I think they can come up with something on item 4, but if it's not solid and something that Cohn likes, no deal.

Sure it's a deal and its Stern's job to make the best deal but: (1) KJ said he wanted to deliver the term sheet Thursday. The story is talking about KJ flying out to Orlando to get the final number he wants this weekend. Rushed is bad for getting 5 yes votes; (2) the deal doesn't seem to have much/any margin. And any difference would fall to the city's end; (3) the Kings are getting a smoking deal at 80 over 30. If they try to put that down somewhere between 50-30 million over 30 years, with the city having to make up the difference, it shouldn't matter, but the relationship with the Maloofs is so toxic it could either kill a deal or again give a no vote cover. And I'm talking mostly about Cohn, who voted against both the Kings Loan and was doing press confereces against Q & R on day one. Stern might really lose Cohn; (4) the idea of AIG's money is our money is just insluting.

I think Stern is looking at there being 5-6 yes votes and he's trying to get the best deal for his owners at this point by trying to take 10-20 million off the top. The fact is that he's got a thin margin on KJ's deal and this crap could kill the deal and cause somebody like Cohn to say, this is never going to work. I'm done.

Stern is great at what he does. But as we've seen here and in Seattle, he's not so good at reading local politics. And he's getting some info from the Maloofs, who might be two of the most tone deaf people on this issue in the region.

Next, six days will be interesting.

agreed.

 

[Circa_1985_Fan]

I'll have to agree with Hammer here...I don't believe Stern/the league does all this negotiating only to come up short. What I got from this statement is they are getting all ducks in a row to make this thing work...not NOT work. Bottom line...Stern doesn't like moving teams, and WANTS the Kings in Sacramento...not Anaheim, not Seattle...Sacramento first. I believe AEG will put in more if the Maloofs come up short...and I also see Taylor throwing in more if its only a $20-30 million gap...he does this to get building rights in and around the arena/railroads, which is worth more than the amount he'd be investing in cost overruns. I think we are VERY close to having a done deal in favor of the ESC.

 

[kennadog]

I too think its close. KJ is supposed to meet with Stern face-to-face at the All-Star weekend. Face-to-face is the best way to settle a deal. By the way, I thinking the city wants the Maloofs $80 million up front. Maybe I misunderstood something along the way.

They also have to figure out how to pay back the current city loan to the old arena ownership. Maybe $80 million up front and keep paying the remaining debt service on the current loan. Just a change in security for the city's loan. If they just keep paying their current annual debt service, then there would not be a pre-payment penalty. I think the bond holders, almost certainly, would have to have a chance to weigh in on any change of security for the loan, tho.

 

[BMiller52]

I too think its close. KJ is supposed to meet with Stern face-to-face at the All-Star weekend. Face-to-face is the best way to settle a deal. By the way, I thinking the city wants the Maloofs $80 million up front. Maybe I misunderstood something along the way.

They also have to figure out how to pay back the current city loan to the old arena ownership. Maybe $80 million up frant and keep paying the remaining debt service on the current loan. Just a change in security for the city's loan. If they just keep paying their current annual debt service, then there would not be a pre-payment penalty. I think the bond holders, almost certainly, would have to have a chance to weigh in on any change of security for the loan, tho.

+1. what day of ASW are KJ and Stern meeting though?

 

[kennadog]

+1. what day of ASW are KJ and Stern meeting though?

I think I read Sunday, but I'll have to check that when I have time. It was mentioned in the Bee, I think.

 

[Circa_1985_Fan]

I think the $80 million figure was a combo of Maloof money and an investment by the NBA itself, if I remember correctly. I think its $130 million between AEG/NBA/Maloofs combined.

 

[Larry David]

I think the $80 million figure was a combo of Maloof money and an investment by the NBA itself, if I remember correctly. I think its $130 million between AEG/NBA/Maloofs combined.

Yep. $80 from the team/league. $50 from AEG. It seems like AIG either got to that number, or as close as they'll get, as KJ has confirmed that AEG would operate the arena.

It's combined because it's the "private money," but it's not the same. This would be like trying to get a shoping center done and Lowes saying the rent paid by a property managment company should count as a lot of their rent, because the place doesn't get built otherwise. Yes, you are right. The place won't get built if you drive too hard of a deal.

Those numbers have been public for a long while and KJ has been talking to the league a lot. KJ appears to have the parking numbers lined up. KJ got AEG lined up. I don't know if KJ can find a deal to firmly replace the 9 million that will get 5 votes, but I'll bet he can. Now the NBA has the leverage and they are pulling hard on a deal that's held together with tape and paper clips.

They city has done everything they can simply to make a deal. Not to make the best deal they can try to make, just make a deal. The NBA and Maloofs already have a very good deal on the table. On Thursday, it appeared we had 5-6 yes votes.

I think Stern has taken this from 70-30 to 50-50 just to try to get another 5-8 million for two dummies that have almost killed basketball in this city. That's just by pissing people off and pushing back KJ's deadline. And if he really plays hardball, he could misread the cards and kill the deal.

At this point, if the deal fails. A lot of the blood is on Stern. Yes, the city botched this for a decade. But they were ready to make a a great deal, and the numbers and timeline were out there for months. And then 7 days before the deadline, Stern is making public comments that while "substaintial," he's not going to hit KJ's number.

Yes, it's business and posturing. But this deal was only going to get done if everybody was collaberative and rushed. And now Stern is stalling and playing hard ball ... because it's not like he had any problems with that in 2011.

 

[Larry David]

KJ had a year to work on this. At the time, he was on record that he wanted this passed about a month before 3-1-12. A week ago, he was saying cousel would have the term sheet on Thursday, 2-23-12.

Based upon his NBA background, KJ probably hoped Stern wouldn't hold him over a barrel and let time slip away, but it looks like he's forced to go plead to Stern in Orlando this weekend. Best case, he gets to a number he can live with. Worst case, he starts plugging in numbers that were already crunched, but might kill the deal, into the term sheet.

At the same time, he's trying to nail down 9 million per year, which isn't done because they were still polling options this weekend.

I'm sure some people like Cohn are in the loop. But counsel and the city are going to get a 400 million dollar deal that puts the city's parking up for 30-50 years a few hours before a take it or leave it vote. What a mess.

 

[JB_kings]

KJ had a year to work on this. At the time, he was on record that he wanted this passed about a month before 3-1-12. A week ago, he was saying cousel would have the term sheet on Thursday, 2-23-12.

Based upon his NBA background, KJ probably hoped Stern wouldn't hold him over a barrel and let time slip away, but it looks like he's forced to go plead to Stern in Orlando this weekend. Best case, he gets to a number he can live with. Worst case, he starts plugging in numbers that were already crunched, but might kill the deal, into the term sheet.

At the same time, he's trying to nail down 9 million per year, which isn't done because they were still polling options this weekend.

I'm sure some people like Cohn are in the loop. But counsel and the city are going to get a 400 million dollar deal that puts the city's parking up for 30-50 years a few hours before a take it or leave it vote. What a mess.

KJ, Cohn, Rob Fong and John Shirey are the city negotiators.

 

[Larry David]

http://www.sacbee.com/2012/02/22/4283347/sacramento-arena-talks-progressing.html

And just like that, KJ and Stern take things down to defcon 3 and we get new deadlines. Big night now March 6th.

 

[JB_kings]

If they were 50 million apart, it would not be getting this response in the media. There just isn't that kind of money for the city to cough up. That said, this is going to just torture us until we actually see a term sheet.

 

[BMiller52]

http://www.sacbee.com/2012/02/22/4283347/sacramento-arena-talks-progressing.html

And just like that, KJ and Stern take things down to defcon 3 and we get new deadlines. Big night now March 6th.

yup... compared to the alternative this seems like good news, no?

 

[Warhawk]

yup... compared to the alternative this seems like good news, no?

VERY. Unfortunately, I will be in Maui that week and unable to attend the CC meeting on 3/6. I was hoping they would have it all done in time to meet the 2/28 deadline so I could be there. But as long as it gets done, it's all good.

 

[Livinthedream]

I have to agree with Hammer. First off, negotiations were always going to be part of it. The fact that we're negotiating right now means that the NBA and Maloofs must feel that this thing is going to pass. Otherwise, they wouldn't be tinkering with it so close to the vote. Stern doesn't want this to fail. He's put too much effort into it already to pee it away a week before it's set to be voted when all sign point to this thing having a legit chance to pass. Second, we don't know if the overall public contribution is going to change by Stern's statement. If the NBA and Maloofs can claim that they contributed 85 million plus the 50 million that AEG is fronting them, then they look better in the public eye. In addition, if the NBA can convince the Maloofs that the $50 million that AEG is putting in is actually an upfront payment to them instead of to the city, then it makes the Maloofs feel better about losing parking revenue and what not. Makes no difference to the city who gets credit for the public money, as long as the city doesn't have to front it.

That's the positive spin, but I think it's fair.

 

[Hoovtrain]

VERY. Unfortunately, I will be in Maui that week and unable to attend the CC meeting on 3/6. I was hoping they would have it all done in time to meet the 2/28 deadline so I could be there. But as long as it gets done, it's all good.

I will hold you and your trip to Maui accountable if this falls apart.

 

[Warhawk]

I will hold you and your trip to Maui accountable if this falls apart.

Oh, h*** no.

I am leaving the morning of the 6th. We booked this thing months ago.

I stayed home from work yesterday to go to my aunt's funeral (local). I am leaving tomorrow for Seattle to go to ANOTHER aunt's funeral - two in one week. At this point, my immediate family NEEDS Maui!

I feel bad about missing the vote, but nothing to be done this time. It's just very poor timing on the city council's part. Maybe I should just give Mike a life-size cardboard cutout to fill a chair?

Edit: I've been to every CC meeting with #FANS I think; I really wish I could make this one as well.

 

[ArcoKings]

Sacramento is another step closer to building a new downtown arena as it will do so much good for our city. Let the hating begin from the CAVE trolls. #FANS

Like BlindedBYScience. He hates the Kings and doesn't want an arena.

 

[Mike0476]

Like BlindedBYScience. He hates the Kings and doesn't want an arena.

You know what's funny? I said: "Let the hating begin."

Some of the CAVE trolls really thought I meant that literally when it is nothing more than a figure of speech. #SMH

 

[kennadog]

KJ, Cohn, Rob Fong and John Shirey are the city negotiators.

The city also hired some private consultants to help with the negotiations.

 

[Hoovtrain]

Oh, h*** no.

I am leaving the morning of the 6th. We booked this thing months ago.

I stayed home from work yesterday to go to my aunt's funeral (local). I am leaving tomorrow for Seattle to go to ANOTHER aunt's funeral - two in one week. At this point, my immediate family NEEDS Maui!

I feel bad about missing the vote, but nothing to be done this time. It's just very poor timing on the city council's part. Maybe I should just give Mike a life-size cardboard cutout to fill a chair?

Edit: I've been to every CC meeting with #FANS I think; I really wish I could make this one as well.

You HAVE to give him a cardboard cut out of yourself, maybe with a Hawaiian shirt on. That would be classic.
Sorry for your losses.