The 11th Hour

[kennadog]

Yeah I don't think they can afford another 30 million out of pocket. Maybe a year from now but right now I think the relocation fee is a bit much for them to pay. Who knows though, not my decision, but that's what I'd guess.

And that's only the beginning cost of relocating an entire organization's operations. That won't be cheap.

 

[Trueblood]

Not to mention that they still have to pay what they owe on the original loan they got when they bought the team.

As far as the relocation fee is concerned, I think they can spread that payment out over 5 years although I'm not positive. I think that was the case for Shinn and Woolridge when they move from Charlotte to New Orleans. One possible stumbling block is that there are always city's that are willing to pay relocation fees. I can't see it happening in Seattle or KC but you never know. San Jose is willing to fork over a few bucks for upgrading the arena to NBA standards so a relocation fee might not look so bad for them.

Something else to think about. If the relocation deadline comes along in March and there is no new collective bargaining agreement in place, I think it would be odd for them to file for relocation. Trying to drum up interest in a new market with the possibility of half if not the entire first season being wiped out would be sort of awkward. Because of that, I'm looking at a minimum of 2 more years in Sacramento so if the convergence plan falls apart as well as the Vegas arena, I have to think that they will take one last stab and pick the best option of the 6 remaining proposals that got beat out by the convergence plan back in January. It would be a long shot but at least it would be worth looking into while the league and players try to sort out the new collective bargaining agreement.

 

[Larry David]

True, I was thinking like you - but with a twist. I think that it's more that just a lockout, I think most of owners know it's about 50/50 the NBA doesn't play a season. In which case, the lockout gives the owners a chance to scoop up every dollar this season (no games where fans know the team is gone) and you handle the move during the lockout, and show up in a new city after.

However, what's got me wondering is the 350 million dollar loan that comes due in March 2011. If the convergence plan is nailed down, I'm sure it deals with it somehow. Without that plan in place, I'm having a really hard time seeing how the Maloofs keep control over the Kings and the Palms ... two things we just assume they will do. With a problem that big and no clear choice, I don't know how that will work out.

Under either of the above, it's still 41 home games. Two years may not equal two seasons.

 

[VF21]

Slight shift in direction - I'm more than a little puzzled about Kreidler's apparent shift in outlook and philosophy since he's been part of The Rise Guys. He always seemed to be the voice of reason and now, from what I've been told - I cannot get KHTK - he seems more doom and gloom than anything else.

I'm not upset at all that the Maloofs talked to Seattle. To me it seems quite logical that they're simply doing their due diligence and seeking as much information as they can from all sources for all possible contingencies. There are undoubtedly some lessons to be learned from the experience of Seattle and the Sonics, just like there are lessons to be learned from what happened to any other team that has relocated.

I will hang on to one tangible fact, however. Generally, when a team leaves it's because they are either the second or even third sports option in a town and/or the fan base has eroded. The Kings are the primary sports option for the Sacramento region at the top professional level AND it really appears the fan base is more energized right now than they have been in years. I know the arena situation is still like the sword of Damacles but I absolutely refuse to give up hope.

I've enjoyed reading this thread - thanks Larry David and others - because I think the real danger is when people quit talking about it.

I LOVE THIS TEAM!!!

 

[folsomfella]

Excellent - and disheartening - stuff LD. Your analysis has the ring of truth, it's just a truth most of us don't want to accept.

On a related note, I'm continually surprised no mention is ever made of Omaha becoming an NBA city. It's almost identical to Sac in most ways. The metro pop and thus TV market is smaller but the city is eighth among the nation's 50 largest cities in both per-capita billionaires and Fortune 500 companies. I don't think luxury suites would be a hard sell there. Plus they also have a new-ish, gorgeous arena in the Qwest Center.

 

[Rookie]

You never know...they may of venture into that option as well.

Like VF21 stated..."To me it seems quite logical that they're simply doing their due diligence and seeking as much information as they can from all sources for all possible contingencies. "

I also agreed in not giving up hope and will definitely go to some games this season.

 

[VF21]

Excellent - and disheartening - stuff LD. Your analysis has the ring of truth, it's just a truth most of us don't want to accept.

On a related note, I'm continually surprised no mention is ever made of Omaha becoming an NBA city. It's almost identical to Sac in most ways. The metro pop and thus TV market is smaller but the city is eighth among the nation's 50 largest cities in both per-capita billionaires and Fortune 500 companies. I don't think luxury suites would be a hard sell there. Plus they also have a new-ish, gorgeous arena in the Qwest Center.

Omaha was an NBA city at one time. When the Royals left Cincinnati after the 1972 season, they became the Kansas City-Omaha Kings and remained so for the 1972-73, 73-74 and 74-75 seasons. For the 75-76 season, they became the Kansas City Kings. They stayed there until they became the Sacramento Kings in 1985-86.

 

[Trueblood]

True, I was thinking like you - but with a twist. I think that it's more that just a lockout, I think most of owners know it's about 50/50 the NBA doesn't play a season. In which case, the lockout gives the owners a chance to scoop up every dollar this season (no games where fans know the team is gone) and you handle the move during the lockout, and show up in a new city after.

However, what's got me wondering is the 350 million dollar loan that comes due in March 2011. If the convergence plan is nailed down, I'm sure it deals with it somehow. Without that plan in place, I'm having a really hard time seeing how the Maloofs keep control over the Kings and the Palms ... two things we just assume they will do. With a problem that big and no clear choice, I don't know how that will work out.

Under either of the above, it's still 41 home games. Two years may not equal two seasons.

Could be although that's assuming that they don't have a season. I still can't believe that the odds of that happening are 50/50. I have to think that cooler heads will prevail, especially considering that the cap went up and player salaries have gone down despite there not being a new cba in place.

You are right about the lockout being the best time to scoot out of town. No doubt about it. I'm just saying that the flip side is just as bad. What works for getting out of town unscathed will also mean that it will be that much more difficult to make nice in the new market.

As far as the loan is concerned, I wonder what type of interest rate they are paying? If you tack on a $10 million rent payment to the convergence plan as well as have to pay back the Palms loan, I have to think that the Maloofs would be in trouble. OTOH, they were making $70 million a year at the Palms when things were good. If they are only pulling in $15 million now, that probably makes it impossible to even break even at the Palms in which case I think that they would choose the Kings over the Palms unless things turn around quick in Vegas.

This is another reason that Vegas having an arena scares me a bit. They can always throw in enticements to the Kings. I mentioned the possibility of a city paying off the relocation fee. There is always the possibility that they give the Maloofs a loan similar to the one they received upon showing up in Sacramento. That hypothetical loan could be used to pay off the their Palms loan.

 

[bajaden]

Could be although that's assuming that they don't have a season. I still can't believe that the odds of that happening are 50/50. I have to think that cooler heads will prevail, especially considering that the cap went up and player salaries have gone down despite there not being a new cba in place.

You are right about the lockout being the best time to scoot out of town. No doubt about it. I'm just saying that the flip side is just as bad. What works for getting out of town unscathed will also mean that it will be that much more difficult to make nice in the new market.

I wonder what the odds are of the Maloof's bringing in new money. I know they said they wouldn't give up controling interest, but with several people out there trying to buy franchises and not many teams for sale. Throw in that the Maloofs are tight on money, you think they'd be willing to work out something similar to the agreement they had with Thomas. I believe they became minority owners with the right to purchase full ownership whenever Thomas decided he'd had enough. Its probably not as easy as I'm making it sound. I was just wondering if they had anymore rich billionare Russians over there?

 

[Trueblood]

I wonder what the odds are of the Maloof's bringing in new money. I know they said they wouldn't give up controling interest, but with several people out there trying to buy franchises and not many teams for sale. Throw in that the Maloofs are tight on money, you think they'd be willing to work out something similar to the agreement they had with Thomas. I believe they became minority owners with the right to purchase full ownership whenever Thomas decided he'd had enough. Its probably not as easy as I'm making it sound. I was just wondering if they had anymore rich billionare Russians over there?

Good question. If there are possible investors out there, I have to believe that we won't see them come to the forefront until a new arena is ready to get built.

OTOH, touching on the post that I just edited, maybe money from the new investors could help pay off the Palms loan. That would be good for Sacramento. The Maloofs' Vegas headache would be taken care of so more attention would be spent towards the Kings.