Thar she blows! We've got Burkle!!!!
- Thread starter Tetsujin
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So far so good. KJ is starting to look like a genius. He's probably working the phones with guys like Webb and Barkley and others in the media, as well as calling up the owners of the league to lobby for Sacto. The more he gets TNT and ESPN personalities behind him it's that much more difficult for the NBA to go against Sacto.
Burkle has major professional sports ownership experience, not something the Seattle group has (to my knowledge). Could be another added plus to the package.
Burkle has major professional sports ownership experience, not something the Seattle group has (to my knowledge). Could be another added plus to the package.
This article is interesting, if only for its premise: (link)
The premise of the article? That STA is not going to be a part of the Hansen sale.
I think we've all been operating under the assumption (I certainly have) that STA was necessarily going to be a part of the sale. Not that Hansen would actually want STA, just that it's so tightly tied up in the Kings that it would have to go along with. For instance, on top of the arena itself, a $25M stake in the Kings also acts as collateral on the city loan we've talked so much about. The Maloofs can't be stupid enough to sell off their collateral on an outstanding loan, can they? (OK, I guess they can.) But what happens, legally, if you try to do that? I have no idea, but I do know that it would make it only that much easier for the Brothers Snake to walk away from STA and leave the city of Sacramento holding the bag, which they obviously would be all too happy to do anyway.
Given that David Stern has been adamant in the past that he would not allow an NBA team to default on debt obligations to cities (for good reason - the NBA needs to assure cities it will hold up its end of the bargain), and given that if STA were not part of the sale the Maloofs (no longer under the auspices of the NBA to hold them to their debts) would obviously default...wouldn't failure to include STA as a part of the sale be cause for immediate rejection of the deal by the BOG? Since the logical conclusion of approving the sale is a default of money borrowed under the auspices of the NBA...that seems a no-brainer.
I don't really know, but that certainly seems like an interesting legal wrinkle that could also help keep the Kings in town, if, as the KCRA article assumes, STA is not a part of the deal.
The premise of the article? That STA is not going to be a part of the Hansen sale.
I think we've all been operating under the assumption (I certainly have) that STA was necessarily going to be a part of the sale. Not that Hansen would actually want STA, just that it's so tightly tied up in the Kings that it would have to go along with. For instance, on top of the arena itself, a $25M stake in the Kings also acts as collateral on the city loan we've talked so much about. The Maloofs can't be stupid enough to sell off their collateral on an outstanding loan, can they? (OK, I guess they can.) But what happens, legally, if you try to do that? I have no idea, but I do know that it would make it only that much easier for the Brothers Snake to walk away from STA and leave the city of Sacramento holding the bag, which they obviously would be all too happy to do anyway.
Given that David Stern has been adamant in the past that he would not allow an NBA team to default on debt obligations to cities (for good reason - the NBA needs to assure cities it will hold up its end of the bargain), and given that if STA were not part of the sale the Maloofs (no longer under the auspices of the NBA to hold them to their debts) would obviously default...wouldn't failure to include STA as a part of the sale be cause for immediate rejection of the deal by the BOG? Since the logical conclusion of approving the sale is a default of money borrowed under the auspices of the NBA...that seems a no-brainer.
I don't really know, but that certainly seems like an interesting legal wrinkle that could also help keep the Kings in town, if, as the KCRA article assumes, STA is not a part of the deal.
That is my thinking. After all, the $525 million figure is simply a valuation of the entire franchise. That has nothing to do with moving costs. And how could they even make provisions for the relocation costs when the relocation fee is set at the discretion of the BOG?
And of course, while it makes for a nice figure for the lazy media to run with (and they have) that $525 million has yet to actually be broken down. The closest anyone has gotten is doing the math that the Maloofs own 65% and are therefore "getting" $340 million. That can't be correct. First off, the $77 million owned on STA must be accounted for. Stern has said as much. That immediately brings the figure down to $447 million which would make the Maloof's share $291 million. But even that assumes that the Hansen/Ballmer group are willing to take on the existing debt on the team (rumored to be between $100 and $200 million to the NBA) and not account for that in the valuation of the team. Really? How does that make sense? The sale price of the team SHOULD be the estimated value minus the existing debt. And that doesn't account for reports that the Maloofs would retain a small stake in the team which would reduce their payout by the percentage of the team they are retaining.
I'd be very curious to know exactly what the Maloofs would gain if this deal goes through, but those exact numbers will likely never be public.
By my logic the team is valued at $525 million. Assuming $125 million in debt that takes it to $400 million. $77 million for STA makes it $323 million. Assuming the Maloofs get a 5% stake it means they are selling 60% of that which would make their gain $194 million. Again, I have no idea what the actual numbers are or if I'm figuring this correctly, but it makes sense to me. Also shows why they were asking for such a high sale price. They needed it to make a sale worthwhile to them financially. It also explains why KJ is targeting a $450 million or so valuation of the team. Without the repayment to the city it is equivalent to the $525 million figure.
So I take reports talking about $525 million and "relocation fees" with huge grains of salt. The people reporting them know less about the actual situation than people on this board do.
And of course, while it makes for a nice figure for the lazy media to run with (and they have) that $525 million has yet to actually be broken down. The closest anyone has gotten is doing the math that the Maloofs own 65% and are therefore "getting" $340 million. That can't be correct. First off, the $77 million owned on STA must be accounted for. Stern has said as much. That immediately brings the figure down to $447 million which would make the Maloof's share $291 million. But even that assumes that the Hansen/Ballmer group are willing to take on the existing debt on the team (rumored to be between $100 and $200 million to the NBA) and not account for that in the valuation of the team. Really? How does that make sense? The sale price of the team SHOULD be the estimated value minus the existing debt. And that doesn't account for reports that the Maloofs would retain a small stake in the team which would reduce their payout by the percentage of the team they are retaining.
I'd be very curious to know exactly what the Maloofs would gain if this deal goes through, but those exact numbers will likely never be public.
By my logic the team is valued at $525 million. Assuming $125 million in debt that takes it to $400 million. $77 million for STA makes it $323 million. Assuming the Maloofs get a 5% stake it means they are selling 60% of that which would make their gain $194 million. Again, I have no idea what the actual numbers are or if I'm figuring this correctly, but it makes sense to me. Also shows why they were asking for such a high sale price. They needed it to make a sale worthwhile to them financially. It also explains why KJ is targeting a $450 million or so valuation of the team. Without the repayment to the city it is equivalent to the $525 million figure.
So I take reports talking about $525 million and "relocation fees" with huge grains of salt. The people reporting them know less about the actual situation than people on this board do.
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Supposedly the Maloof's business partner, Hernreich, owns 10% so that would lower the final amount to the Maloofs even more.
In putting together a competitive offer does it make sense to bid more than Hansen/Ballmer's offer? It seems not since any extra would just go to the Maloofs and it's up to the BOG to decide to reject the Seattle offer, not to make more money for the Maloofs. I suppose it looks bad in the court of public opinion if a larger bid is ignored.
In putting together a competitive offer does it make sense to bid more than Hansen/Ballmer's offer? It seems not since any extra would just go to the Maloofs and it's up to the BOG to decide to reject the Seattle offer, not to make more money for the Maloofs. I suppose it looks bad in the court of public opinion if a larger bid is ignored.
I apologize if this has been already posted but this article By Tom Ziller is very cool!!!
Everybody enjoy!!
http://www.sbnation.com/2013/1/23/3906724/chris-hansen-sacramento-kings-sale-relocation-seattle
Can we get Stern to read this please!!!
Everybody enjoy!!
http://www.sbnation.com/2013/1/23/3906724/chris-hansen-sacramento-kings-sale-relocation-seattle
Can we get Stern to read this please!!!
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Yes. As a matter of fact, the managing partner doesn't even have to own any part of the team. It will be interesting to see who manages this team. I cannot imagine a genuine whale backing off and letting someone else run the team much less one out of 5. We'll see because that's their problem and my problem seems to have been solved. 
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