The morning after and other news, rumors, etc.

[Warhawk]

You can look at it that way, or you can interpret our new ownership group as being confident that they are going to make money and put out a great product, unlike the Magoofs, who put out a **** product and leeched welfare from the other owners.

Precisely. And there is no indication that it was "forced" upon the Sacramento group. It may have been a completely voluntary gesture to really push the idea that we will be spenders and be competitive.

 

[Bricklayer]

That sounds an awful lot like bribery.

In business transactions everything is basically bribery and extortion.

 

[Elektrik]

Forgive me if this has already been posted (too many threads and conversations to know when something has been posted anymore), but I was already concerned with our group being able to be profitable, then comes this artcile - http://www.sacbee.com/2013/05/06/5398439/sacramento-kings-dallas-nba.html#disqus_thread -

The investors trying to keep the Kings in Sacramento made key concessions to the NBA, including a promise to limit the amount of league revenue sharing they would accept, according to a published report

Quoting an anonymous source, the magazine said the group led by Vivek Ranadive agreed to accept fewer revenue-sharing dollars while the team was still playing at Sleep Train Arena. Once the team moves into the proposed downtown arena, the Kings would take no money at all.

The NBA created a new revenue-sharing structure last season in which wealthier franchises direct more of their profits to the struggling franchises. The magazine said the Kings, who had the league's worst attendance in the just-concluded regular season, would expect to collect about $18 million a year under the new arrangement.

What was the point of the CBA if the BOG is going to force small markets under the gun to waive parts of it?

I dont get this at all. If this deal is all but done, why sacrifice your portion of revenue sharing unless you are still waging war and using it as a bargaining chip against the other group? Odd...

 

[Vlade4GM]

In business transactions everything is basically bribery and extortion.

They're trying to influence votes though by saying to rich teams that they don't have to pay them and to poor teams that they get a bigger share of the pot. I don't think you can write that off as just "this is like everything in business," this is different. This circumvents one of the main points of the CBA.

 

[Section 101]

I dont get this at all. If this deal is all but done, why sacrifice your portion of revenue sharing unless you are still waging war and using it as a bargaining chip against the other group? Odd...

Who said they just now did it? Just because it's just being reported now doesn't mean it wasn't part of their presentation weeks ago.

 

[Kingsfan23]

This just contributes to my larger concern concerning this bid and group... 525 is way too exorbitant a bid that was extorted out of this group concerning the circumstances, and I wonder how they are going to turn a profit on this long term investment. I feel as if this group are made up of a bunch of benevolent people who are helping us out out of pure charitable reasons, a bunch of californians stepping in to save one of their own.

 

[macadocious]

While there may be a certain part that is helping CA, some (Mastrov) just wanting a team, the bigger picture are two things:

1.) The re-development of Sac downtown. This could net them 10X what the Kings do over the next few decades. Sacramento has always been a "what if" city. "What if" there was a viable downtown and things to do? Not only would this lure current residents, it would help people move here and attract tourism. Something that we basically have none of.

2.) Kings Fans. I think these owners see what a loyal fan base there is and how we can be a profit center if treated right and have a winning team.

Those are the two MAIN reasons they are over paying.

 

[Kingsfan23]

^^ yeah macadocious. I guess another reason, and I know very little about economics, is that the dollar I hear is going to be weaker in the future, so it is better to buy properties now? Yes, sounds right.

 

[Warhawk]

They're trying to influence votes though by saying to rich teams that they don't have to pay them and to poor teams that they get a bigger share of the pot. I don't think you can write that off as just "this is like everything in business," this is different. This circumvents one of the main points of the CBA.

Not sure what you mean by "circumvent" in this instance ("taking the argument out of the equation" - I assume you mean this), but if the owners were planning to spend enough on players (and it sounds like they are), then this is a moot point. As others have mentioned, if this is the case they weren't going to receive the payments anyways. They are likely effectively giving up nothing but scoring "brownie points" for promising to do it.

 

[The Hammer]

^^ yeah macadocious. I guess another reason, and I know very little about economics, is that the dollar I hear is going to be weaker in the future, so it is better to buy properties now? Yes, sounds right.

Astute observation I'd say.

I've thought all along about this as much more of a gigantic real estate deal than just buying the Kings. The Kings will be a fun asset, and I'm sure they'll invest to make them winners, but the real money to be made is in the redevelopment of slash basically building of an urban downtown. We still don't know who owns what amongst the whales in this whole deal, but my gut tells me they all have a piece of the real estate pie. These guys are basically going to own a downtown in an up and coming California metropolis.

 

[ParniValjak]

Not sure what you mean by "circumvent" in this instance ("taking the argument out of the equation" - I assume you mean this), but if the owners were planning to spend enough on players (and it sounds like they are), then this is a moot point. As others have mentioned, if this is the case they weren't going to receive the payments anyways. They are likely effectively giving up nothing but scoring "brownie points" for promising to do it.

Precisely!

If the ownership group are planning to spent and put a winning product on the floor, then they will NOT be getting any income from revenue sharing anyway. If you have a team that is close to or actually paying luxury tax, you are not part of the revenue sharing.

I am not worried about this one bit. In fact it is a very smart move by the ownership group. Give up something that we likely would not have taken anyway in order to score some brownie points with those that thing revenue sharing is a big deal.

This whole transaction is MUCH MUCH bigger than the Kings. This is about the realestate money that will get generated here. The money that these guys will cash in from the redevelopment of the down town will more than make up for their buying price of the franchise. Remember, they are cashing out $341 million and not $525 million. They will get back 3 times that amount once its all said and done.

We will take reduced amount while we are still playing at STA but once the arena is built and the redevelopment around it starts kicking off, we wouldn't have received anything from the revenue sharing anyway.

 

[Livinthedream]

To piggyback on what everyone is pretty much saying, this is Ranadive's way of promising that he will do everything he can each year to field a winning team and not tank just and collect revenue sharing money. Basically, he's showing contrast between himself and the Maloofs. And quite possibly Hansen, if the reports are to be believed that they way Hansen is financing the arena, it will make that team a recipient of revenue sharing.