Stakeholders step up

The City of Sacramento and Mayor Kevin Johnson have two big problems. And they’re both named Maloof.

Sacramento’s City Council approved a $200,000 expenditure for pre-development (EIR/Study) work last night, thanks to the money being fronted by the NBA, not Kings owners Joe and Gavin Maloof. Even though the Maloofs agreed to splitting the projected $13 million in pre-dev work weeks ago, they are now balking because they consider themselves tenants and not true stakeholders in the project.

That’s not a good start, whether the Maloofs truly feel that way or are merely exhibiting brinksmanship. The Bee’s Marcos Breton lays out the case for not trusting the Maloofs. All of that goodwill from the February negotiations is quickly ebbing now that the various stakeholders have to commit, and the Maloofs have to actually put up some money. You can’t blame the City, who is doing what they can even if the financing piece is suspect. AEG has their role carved out. Speaking of AEG, they are due to have the EIR for the LA Convention Center project (which may or may not have a football stadium attached) released tomorrow. The document(s) will run 10,000 pages. The cost to complete it and other pre-dev work: $27 million. Now that’s commitment. If the Maloofs wanted to run the arena themselves and not have a third party like AEG involved, they should’ve negotiated that in the first place. We know that their problem is that they don’t have the cash to make such an investment ($138 million when including both their piece and AEG’s). Now it appears that Commissioner David Stern dragged them to the table, kicking and screaming.

Stern doesn’t have the power of an antitrust exemption at his disposal, so he can’t exactly keep the Maloofs from being uncooperative, and if the Kings wanted to move it’s merely a matter of procedure and cash. When news of the arena deal broke, I characterized the plan as fragile, and this is a big reason why. The Maloofs think that the City can’t get the arena built in time for the 2015 NBA season, and they’re already backing away as they’ve done before. The City and its backers are accusing ownership of sabotaging the process. There is a movement to subject the arena plan to a referendum. Financing remains a huge question mark. The various parties haven’t even started the grind of the environmental study, and this is the state of affairs? Forgive me for not having a lot of confidence in the project.

19 thoughts on “Stakeholders step up

  1. What are the chances of the arena project surviving a referendum?

  2. Just asking, but why doesn’t San Jose make a move for the Kings? IF somehow Sac falls through, wouldn’t it make more sense to keep the Kings in NorCal rather than have them become the THIRD franchise of LA? It wouldn’t hurt the city of SJ/Sharks to at least let the Kings/NBA know they’d be interested in accomodating them; not suggesting it would happen. In my eyes, no harm no foul.

  3. I don’t think we want the Maloofs in San Jose. They sound like horrible owners.

  4. The Maloofs are horrible owners. They were all born with silver beer bottles in their mouths, but did not inherit mommy’s or daddy’s business sense. They’ve driven the business empire, built by their parents, into the ground. They foolishly built the second Palms tower, just before the credit collapse, and had to sell off the lucrative beer distributorship (the main source of Maloof revenue) to finance the second tower, and stay above water. And that was in futility, because the financing stakeholders of the Palms took over ownership (with the Maloofs maintaining a very tiny slice).
    .
    So now they are left with virtually nothing, except the Kings, and few minor events they run in SoCal.
    .
    And with the arena financing deal, they negotiated with the city, David Stern and the NBA, and AEG, and agreed to put in their part (including their part of the pre-dev costs – 3.6 mil, chump change to most sports team owners). But now they’re balking. Makes me think they never intended to put up their part of the bargain, because they can’t afford it. Ridiculous because, the City, David Stern, and AEG, all put their necks out.
    .
    I’m a die hard Sac area guy, and supporter of the Kings and the Arena deal. But the only way I see this getting done is if Stern forces the Maloofs to sell a majority stake. This is what Stern should do, because he’s put his heart and soul into this (keeping the Kings in Sac, and making them a big money maker with a new arena), and he can’t have owners that don’t have the money to run a team. But if the Maloofs maintain ownership, they’re Anaheim bound. That’s what the Maloofs have always wanted, particularly George Maloof, who maintained communications with the Anaheim group during all the Sac/NBA/AEG negotiations. Joe and Gavin were just there for show.

  5. ESPN tours the Marlins new ballpark. Of course, the way this ballpark got built – shoved down the taxpayers’ throats – won’t happen in the Bay Area. The bobblehead museum is a nice touch.

    http://espn.go.com/video/clip?id=7775091

  6. Back to the subject at hand. A bit on the proposed referendum, from the Sacramento Bee:
    “The group, called Sacramento Taxpayers Opposed to Pork, or STOP, hopes to gather 30,000 signatures by late May to qualify its measure for the November ballot, a representative said.

    …A referendum to require a referendum, it seems

  7. Well, San Jose is the 10th-largest city in the country, the biggest in the Bay Area and it has lots and lots of corporate $$ and disposable income. And its support of major pro sports so far (the Sharks) is second to none. Who wouldn’t want to move a team here?

  8. …and what’s your point about this bar fight? A few yahoos beat up somebody in San Jose, therefore no major sports franchise should ever move here? Is that it? That’s as bad as when I have to counter arguments from people who don’t think it’s safe to go to A’s games in Oakland. Ridiculous

  9. The reason that there is talk of NBA to San Jose is that Larry Ellison wants a team really bad and he would bring them to San Jose. If the NBA does come to San Jose, San Jose would have to agree to the improvements to HP Pavilion to accommodate the NBA team. If Larry Ellison isn’t involved, I don’t think there would be much talk of the NBA to San Jose. If a team does come to San Jose, Larry Ellison would be the main owner.

    No way would the Kings come to San Jose if the Maloof’s are still owners. Ultimately though if the NBA comes to San Jose, I would think there would be some mingling of the Sharks ownership and the owners of the NBA team. Since the Sharks also run the HP Pavilion, the only way that the Sharks, NBA team, and the HP Pavilion could operate successfully together is if there are some common ownership.

    I also believe that the same type of thing could happen if the A’s come to San Jose. The HP Pavilion and the Cisco Field need to work together because they would have to work together on a parking plan. The 49′ers are a completely different story. They seem completely separate from the South Bay except that the team practice facility is in Santa Clara.

  10. Damn David! It must really hurt knowing the A’s and Warriors want to leave The O…sorry. By the way, surprised you’re still around brah.

  11. Last item for you David: do you really want to bring up crime in San Jose after what happened in The O on Monday? And for the record, no one here even attempted to slam The O after that tragedy (and it won’t happen even after your attempt at slamming SJ). Good day!

  12. @J-A,
    For your sake I hope the Kings stay in Sac. That arena would be awesome for your city.

  13. @ Tony D. – In all fairness what happened on Monday was not a gangland/drug slaying, which would typify the majority of homicides in Oakland. This was a shooting spree that has happened in all different kinds of cities, safe and dangerous alike. Had this very same, small nursing university been located in Pleasanton, Orinda, or Walnut Creek, I’m not so sure the result would have been any different on Monday.

  14. @Columbo,
    Completely agree with your post. And while not even being close to the tragedy that occurred Monday, football fans fighting football fans also happens in cities across this nation. I’m just wondering why David would even bring up Giants/Niners idiots fighting in San Jose to prove some mysterious point. Oh well, I guess it doesn’t really matter.

  15. @Tony
    Thanks man. If this deal actually gets done and the Kings stay, I really hope it’s sans Maloofs. The 3 brothers couldn’t run a lemonade stand. And I really think they don’t have the money to hold their part of the deal. Maybe Ron Burkle (who has expressed interest) will be invited in by Stern. And speaking of Stern, I’m guessing he’s livid with the Magoofs right now.
    .

  16. The Kings won’t move to San Jose for the same reason Ellison has now failed 3 times at buying an NBA team. No one wants him to move a team to SJ in the NBA leadership/ownership. The Warriors definitely don’t want it. The NBA doesn’t want it.

  17. So, you’re saying the reason Ellison hasn’t bought a team is that they don’t want one in SJ. Isn’t it possible they just don’t want him as an owner and that it has nothing to do with SJ?

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