Monthly Archives: April 2011

04.15.11
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KBWF becomes Sports Radio 95.7

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The new KBWF homepage

So, how do you like ‘dem apples?

Entercom switched KBWF‘s format from country to sports radio today, though the station is only playing loops of clips and sports-related rock right now. The Sharks will come along for the ride, though it is unknown if the Sharks broadcasts will switch over from sister station KUFX starting tomorrow, or if there will be a simulcast for the time being. Either way, this is FANTASTIC news for the A’s and anyone who wants an alternative to KNBR. It’s pretty horrible for the country programming folks with the old format, though that’s the way the business works. This will also allow KUFX to hone on expanding its excellent ratings in the South Bay to the Greater Bay Area. It’d be a good idea for Entercom to figure out a way to strengthen signal south of San Jose, as that’s a weak spot for KBWF right now.

Update: Relevant links:

It’ll be interesting to see what other content is brought in. Entercom’s biggest sports property is WEEI in Boston, which like KNBR is an ESPN-affiliated (but not operated) station. I would not be surprised if some of the WEEI talent came to SF as part of the transition. Unlike former KTRB parent Pappas, Entercom has the resources and reach to take Cumulus’s KNBR head on. They also have the enough inherent corporate bureaucracy to make running a station serious drudgery if they want. I’m looking forward to it.

More from Susan Slusser at The Drumbeat:

If this station picks up Stanford and if the A’s ever get permission to move to San Jose, Entercom might have positioned itself well as a South Bay alternative to KNBR. In addition, the A’s and Sharks have fan bases that feel particularly under-served by KNBR, so that gives 95.7 FM some hungry listeners from the get-go.

Walker tells me that listener studies show that 80 percent of those who listen to the radio stay on the FM side and never switch over to AM at all. He and Entercom believe there are plenty of sports fans in general who are listening to FM radio and who are currently under-served. SportsRadio 95.7 FM is calling itself the biggest large-market all-sports station in the country.

“We’ll be talking A’s and Sharks, two winning franchises that aren’t getting as much attention as they could,” he said. “But we’ll also be talking Warriors, Giants, Earthquakes, SaberCats.”

One other observation. To Ken Pries, Ken Korach and Lew Wolff: This is a damned good Plan B. Stations that switch to sports radio tend to be stable there as the content is cheap and limitless. Well played.

Update 2:10 PM – The first programming announcement is the addition of KCTC-AM afternoon drivetime show “The Rob, Arnie & Sports Show” to the 4-6 PM weekday block. KCTC, an ESPN affiliate, is owned by Entercom.

04.15.11
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Phil Taylor on Mr. T & Byrnes show

New KNBR host Eric Byrnes filled in for Ralph Barbieri on the blowtorch’s afternoon drivetime show on Thursday. Byrnes and Tom Tolbert interviewed SI’s Phil Taylor, who is writing a feature for the magazine on how difficult it is to be an A’s fan amidst the Giants’ recent success (sounds like a must-read). The interview can be found here (MP3). The arguments coming from the three participants are familiar, and rather than selectively quoting them I suggest that you listen to the whole thing and then come back here and comment if you feel like it. The best comments will be excerpted and placed in this post.

04.14.11
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Ron Burkle: Oasis or Mirage?

I’ve never met Ron Burkle, and I don’t know him personally. From what I’ve heard and read about him, I can tell you this much: He’s no Wally Haas or Mark Cuban. He’s a lot more like John Fisher. Like Fisher, Burkle is a middle-aged billionaire. Burkle tends to run in the Hollywood and pro sports circles more than Fisher, but his ownership “style” is similarly hands off as he is not a managing partner and he tends to defer decisions to the front office, based on his decade-plus tenure owning the Pittsburgh Penguins.

There’s also little chance that Burkle gets involved in the Kings-or-other-Sacramento-team business unless some new arena deal is part of it from the get-go. Burkle gritted his teeth along with Mario Lemieux as the Penguins plugged away season after season in the decrepit Civic Arena. They came close to selling the Pens to RIM co-CEO Jim Balsillie, who most assuredly would’ve moved the team north to Hamilton, Ontario. That deal didn’t happen only because Balsillie backed away when he felt that NHL commissioner Gary Bettman interfered with the process. A deal to publicly finance what would eventually become CONSOL Energy Center happened thanks in part to visits by Burkle-Lemieux to Kansas City and Las Vegas, which scared Pittsburgh and Pennsylvania officials into acting. Burkle definitely wasn’t afraid to play hardball in the venue game. If Burkle is going to get involved in Sacramento, he probably doesn’t want to repeat that constant headache. If he does, well, he must be a masochist, especially considering Sacramento’s pledge of zero dollars towards a new arena.

The Pens aren’t Burkle’s only dalliance with major pro sports. When the NFL was looking to add its 32nd team, Burkle and Ed Roski (of City of Industry stadium fame) pledged a $300 million expansion fee for what everyone in the media assumed would be a new LA NFL franchise. Another consortium featuring Eli Broad and Michael Ovitz pledged $400 million. Then both groups were blown out of the water by Bob McNair’s $700 million bid, and the expansion team went to Houston. Burkle doesn’t appear to be attached to either of the competing LA bids this time around, so naturally he could devote some attention to keeping or resurrecting NBA hoops in Cowtown.

In 1988, four arenas opened around the NBA: ARCO Arena, The Palace of Auburn Hills, Charlotte Coliseum, and Miami Arena. At $70 million, the Palace was the most expensive to construct and has retained its value and ever since. ARCO’s flaws have been readily apparent to anyone and everyone. Charlotte Coliseum was too big and lacked forward-thinking amenities, whereas Miami was far too small. Miami replaced its arena barely a decade later. Charlotte lost its team and was only granted one when a new arena deal was struck. The Palace and ARCO are the only ones left standing, with ARCO the one that should be replaced. If NBA basketball is going to stay or come back to Sacramento, the biggest issue will always be the arena situation. It doesn’t matter if the hero is Ron Burkle or Ron Burgundy.

P.S. Former Kings SacBee writer Mark Kreidler notes (on ESPN.com) that combined TV/radio revenue for the Kings is around $11 million annually. That’s terrible for a major pro sports franchise and shows how dire the arena problem is for the Kings and the Maloofs.

04.14.11
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Waiting for the Victory Court EIR

Yesterday I sent an email to Oakland CEDA Deputy Director of Planning and Zoning, Eric Angstadt, asking for an update on the Victory Court Draft EIR. Angstadt has been the point man for the project. So far I haven’t received a response. Now it’s nice that we’ve got the regular season going to get our minds and eyes focused on the field instead of off, but someone had to ask. It’s the middle of April and there’s no word on when it’ll be released. Hopefully it’ll be soon. I’m dying to look at it, and I’m sure that pro-Oaklanders want something – anything – to help keep the December momentum going.

If you’re interested, click the link above and send in a request.

04.13.11
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News for 4/13/11

Cal Baseball is safe for at least the next 7-10 years, thanks to relentless fundraising efforts.

Tonight marks the last NBA game to ever be played in Sacramento, at least for the foreseeable future.

As part of the new federal budget pact reached over the weekend, Congress is looking at numerous transit projects as low-hanging fruit for cuts including California’s High Speed Rail project and BART-to-Silicon Valley. It’s not enough to kill those projects, but it could stretch out planning while the projects try again for scarce federal funding in the future. BART-to-SV faces a lawsuit from a Milpitas industrial park owner whose access may be severely affected by construction of the line next to the property. The property owner wants an injunction against any further work until the issue is addressed.

Oakland Mayor Jean Quan is getting creative in figuring out ways to overcome the City’s $58 million budget deficit, which is $12 million more than when she came into office. In addition to a $80/year parcel tax, Quan is looking at short-term financing of the City’s retired police and firefighters’ pension plan. The Contra Costa Times’ Daniel Borenstein has a scathing critique of the pension refinancing plan and the City’s previous (largely failed) attempts to rein in the costs. The more you read about the plan, the more it looks like the Raiders’ Coliseum deal, full of overly optimistic projections and heavy on risk to the City. The current budget shortfall doesn’t have any material impact on any Oakland ballpark efforts, but decisions made now that could adversely impact fiscal feasibility down the road could have a huge impact.

OnMilwaukee.com has the first in a series of articles remembering the efforts needed and political battles waged to build Miller Park.

A study by the University of Toronto claims that the NHL is subsidizing numerous US-based teams and that Canada could support as many as 12 franchises (double the current number) thanks to high demand north of the border. I’d like to read this study before passing judgment.

A bill to authorize a new stadium for the Minnesota Vikings has been introduced. However, it will not be heard until after April 26 and will have only a month to get through the legislature. Pundits are not giving the bill much of a chance of passing.

Two, count ’em, two ballparks are opening in Omaha over the next week. Werner Park, 9,000-capacity new suburban home of the Omaha Storm Chasers (AAA-Royals), seemed to be built in record time. TD Ameritrade Park in downtown Omaha, which is the new home of the College World Series, will host its first game next Tuesday when Creighton University hosts Nebraska (TV: CBS Sports Network/CBS College Sports). The 24,000-seat ballpark can expand to 35,000 for the CWS, though officials are quick to point out that even with the size, the ballpark is not a major league park.

A word on the Giants-Dodgers-Bryan Stow situation. As much as it’s heartwarming to see the outpouring of support for Stow, who remains in a coma following his beating following an Opening Day game two weeks ago, it’s important to remember that wasn’t the first incident, and sadly it won’t be the last. Two months ago, 20-year-old San Carlos resident Taylor Buckley pleaded guilty to one count of involuntary manslaughter three years after the 2008 “sucker punch” killing of Anthony Giraudo outside a Giants game at AT&T Park. If anything, I’m surprised these incidents don’t happen more often. I look back at all of the A’s-Yankees games at the Coliseum, the Giants-Dodgers games at both AT&T and the ‘Stick, and I remember multiple fistfights and fans tumbling down the steps. More often than not, security gets there in time to stop the truly tragic from happening. Unfortunately, all it takes is for someone to hit his head on the edge of a concrete step, or for some thug to wait until he’s out in the parking lot to be an idiot, and then it’s a tragedy. It’s brutal and senseless, yet the line between a small no-harm skirmish and a tragedy can be so small. I want to believe in the better angels of our nature. Sometimes it’s not easy.

Lastly, and on a bittersweet note, the baseball season in Japan is starting, three weeks late and a month after the earthquake, tsunami and Fukushima Daichi nuclear plant ordeal began.

04.10.11
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Selig talks Realignment

While the local and national media have been distracted by the Mets and Dodgers financial woes and have used those stories to project all sorts of cockamamie schemes, the commissioner has been on a different wavelength altogether and barely anyone has noticed. Whether or not you believe Bud Selig, here’s what he said last week about contraction in an interview with Chris Russo:

“The only thing I can tell you about contraction is we haven’t discussed it at all,” he said. “I’m not sure where that came from. We have not discussed contraction at all.”

What Selig has been talking about is realignment. Selig hasn’t divulged how broad his realignment vision is, and it’s likely that too many owners are comfortable with the current divisional alignments that major changes would be approved. He has put out some interesting concepts such as “floating realignment” in which have-not teams could move from to/from the AL East in order to get more stadium revenue from the unbalanced schedule’s greater number of intradivision games. That concept never got off the ground, but here may be some wiggle room for realignment that could come from a very simple numbers argument. Feast your eyes on the following table, whose data comes from NY Times resident geek Paul Robbins.

The path of each team can be seen on Robbins’ Google Maps mashup. Certainly no owner, front office, manager or player is going to get sympathy from fans about the pain that comes with having to travel frequently on plush charter jets. Still, there’s something to the large disparity in travel miles from top to bottom. As you might expect, many of the West Coast teams accrued the highest mileage. But why did the A’s have the third lowest, and the Padres the fifth lowest? Why did the centrally located Cubs finish fourth highest while their crosstown rivals hit sixth lowest? There’s no single factor to blame as scheduling is as much an art as a science. However, you can rest assured that Selig has an idea what part of the solution is: realignment.

The big four major sports don’t realign their leagues on a whim. In every case over the last 20 years, realignment has come with a league expansion event. Changes based on mere geographical “friendliness” do not occur frequently. Before 1994, the NL West would’ve been better named “NL Other” due to having two teams in the Eastern time zone (Atlanta, Cincinnati) and another in the Central (Houston). The leagues/teams have absorbed highly variable travel costs as the price of doing business.

  • 2004 – NBA changes from four to six divisions. Adds Charlotte Bobcats to Eastern Conference’s Southeast Division. Moves New Orleans Hornets (previously Charlotte) to Western Conference’s Southwest Division.
  • 2000 – NFL changes from six to eight divisions after adding 32nd team, Houston Texans. Conferences’ Central divisions become North; South divisions are added.
  • 1998 – NHL changes from four to six divisions after the Hartford Whalers (Northeast Division) move to North Carolina to become the Carolina Hurricanes (Southeast Division). Newly formed Southeast Division also contains two recent expansion franchises.
  • 1998 – MLB expands to 30 teams, adding Tampa Bay Devil Rays and Arizona Diamondbacks. Milwaukee Brewers switch from American League to National League, leaving the AL with 14 teams and the NL 16 teams.
  • 1995 – NHL approves Quebec Nordiques (Northeast) move to Denver to become the Colorado Avalanche (Pacific Division). Both conferences have 13 teams.
  • 1994 – MLB changes from four to six divisions. Both leagues’ West divisions have four teams each, the respective Central and East divisions have five teams each.

Many other relocations, such as the Minnesota North Stars’ move to Dallas or the Vancouver Grizzlies’ move to Memphis did not automatically cause realignment. The Washington Nationals naturally stayed in the NL East after they moved from Montreal. Divisional status quo also happened for the Houston Oilers-turned-Tennessee Oilers/Titans and the Cleveland Browns-turned-Baltimore Ravens.

TV convenience

The Texas Rangers would love nothing more than to leave the AL West and cut down the roughly 20 West Coast 9 PM CT start times their fans watching in the Metroplex have to endure every season. Unfortunately for the Rangers, no changes will happen just to placate one franchise. If two teams resist, then there’s a movement – especially if those two teams are the Cubs and Cardinals. In 1992 Fay Vincent initially pushed for a 1992 makeover in which the Cubs and Cards would be placed in the NL West, whereas the Braves and Reds moved to the East. It would seem unlikely that reverting to a two league, four division setup would gain traction, as there simply aren’t enough teams in the Pacific and Mountain time zones (eight team total) to deal with the problematic time shifts for the Central-based teams who would be stuck in the West.

Left: Existing leagues kept intact. Right: Geographic redistribution.

Selig frequently says that he tinkers with realignment concepts frequently while he’s traveling, much as you or I would. The conservative nature of The Lodge makes such tinkering more a mental exercise than anything, but it’s good to hear that he’s giving it some attention. The biggest problem Selig may be facing isn’t cumulative travel or TV time shifts. Rather, it may be the sheer number of teams. Prior to expansion in the 90’s and interleague play, the balanced schedule offered easy, predictable scheduling. Every team in your league was guaranteed to come twice every year. Once you add teams and reduce intraleague games by introducing interleague play, it becomes practically impossible to maintain a balanced schedule.

Top: Balanced schedule in AL. Bottom: Unbalanced NL schedule caused by expansion and interleague play.

It becomes more difficult once additional interleague series are added, since those will compete with intraleague or intradivision play for space within a 162-game season. Note that I’ve only allowed for two interleague series in this scenario. 14 teams is easy to work with, which is one reason why some have advocated for contracting two teams. It’s not a good reason given the big picture, but it’s not hard to see why it might be considered favorable – at least from a logistical standpoint. With 16 teams in 3 divisions, that oddball 6-team division will always complicate matters. MLB could add two expansion teams to make a 32-team league as I’ve wished for in the past, but there is absolutely no internal interest in expansion at this point so it’s a nonstarter. Nevertheless, 30 teams is extremely awkward.

There may be one admittedly strange way to smooth out scheduling and travel. That would be to keep the American League at 14 teams over 3 divisions while making the National League 4 divisions of 4 teams each.

AL remains status quo. NL switches to four division format.

A variant of the NL distribution has 12 intradivision games per team, which allows a bump vs. the “NL South” to 9 games, achieving parity with the other divisions and some semblance of a balanced schedule, if that is a goal. I wouldn’t expect the National League to do this because, as the more conservative of the two leagues, it just doesn’t seem like they’d be in a rush to introduce another pennant and an additional two teams to the playoff format. If the American League were doing this in concert it might make more sense. Since the AL isn’t expanding, the NL isn’t going to change. Regardless, the seemingly endless number of possibilities for realignment sheds light on how difficult it is to plan for MLB’s short and long term. For the fans’ sake, I hope that Selig can get the owners to at least honestly discuss the pros and cons of different scenarios. Surely there are practical ways to make realignment work for owners, players, and fans alike.

P.S. One thing you can’t expect from Selig and the owners: some form of a promotion/relegation system like the one used in European soccer. The delta of franchise values between MLB and AAA teams is much too vast for any owner to take such a risk. Many teams that have been relegated have never made it back and have even become insolvent, a phenomenon known in British soccer as entering administration.

04.06.11
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SJRA’s party ends, SJDDA’s begins

Wary of Governor Brown’s intent to dismantle redevelopment and weary of budget woes, the San Jose Redevelopment Authority laid off nearly half of its staff and is ready to cut almost all of the rest, according to the Merc’s Tracy Seipel. Some city backers feel SJRA’s work is unappreciated and unfinished, while redevelopment detractors consider the agency a bloated, wasteful example of government overreach. SJRA has been winding down its work over the past year, with only a few projects remaining.

Other than a much-hoped-for baseball stadium in downtown San Jose, a 700-plus-unit housing development in the area north of downtown’s San Pedro Square and infrastructure improvements within the agency’s 21 project areas, there isn’t much left on the agency’s plate.

Of course, there’s the fact that the City created the San Jose Diridon Development Authority last month. This “Son of RDA,” as I coined it then, will have the power to do virtually everything that SJRA can do now, except that it will be restricted to a specific part of downtown San Jose including the ballpark site. The lawsuit by the county that threatened the newborn agency? Settled. SJDDA currently has no website, no specific projects, and no end date. For now its only limitations are what the City and various public and private interests dream up for the district. That includes a ballpark, San Jose’s “Grand Central Terminal,” a small mixed-use development, just about anything.

So while Dandy Don Meredith may be singing while SJRA head Harry Mavrogenes turns out the lights, it’s likely that some of the agency staff, including Mavrogenes, will end up with similar jobs at SJDDA. Mavrogenes was a signatory to the joint powers agreement.

Redevelopment is dead. Long live redevelopment. Especially if the City makes it happen.

Update 4/8 2:10 PM – The first payment made by the City to the County as part of the settlement was made on schedule, with additional payments forthcoming. When you have to make a $21 million payment with only a few weeks to spare, costcutting measures such as layoffs have a good chance of happening.

04.06.11
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Bloomberg profile on Wolff

Update 12:50 PM – Several items have been added to the end of the post.

Last, Bloomberg’s Nadja Brandt put up a profile of Lew Wolff in which he indicates that his LA-based real estate firm, Maritz Wolff, is looking to sell up to $1.8 Billion in various luxury hotel properties by 2015. There’s one interesting takeway.

  • Wolff helped keep the St. Louis Blues in town when they threatened to move in the late 80’s. He and partner Philip Maritz were part of a large business consortium that built a new arena, now known as Scottrade Center, which kept the Blues in St. Louis.

That doesn’t mean the comparisons to Wally Haas should start. But it does show that Wolff has had crucial experience in this realm that stretches way back. Coincidentally, that consortium, Clark Enterprises, ran the Blues and arena at a significant loss for several years before eventually selling the team to Bill Laurie.

Both San Jose and Oakland partisans will be fixated on a couple other takeaways. Chief among them is this easily misinterpreted quote:

“I have no emotional ties to any property,” Wolff said. “They are inanimate objects. That’s the only way we can be fair to our long-term investors who trust us to do what’s best.”

In the ongoing effort to demonize Wolff, his detractors will seize upon that as a sign that Wolff is a cold, emotionless moneygrubber. The Blues experience would seem to belie that. Wolff is neither saint nor devil. He’s laying out his vision for what he thinks is the best path forward for the A’s. Unless someone steps in to buy the team from Wolff and Fisher with a mindblowing offer, that vision is going to be seen through. Which leads me to this:

“Where it may make sense to sell is if you’re in a gateway city with a trophy hotel that doesn’t need significant capital expenditures,” he said. “Bidding for those has been crazy.”

Extend Wolff’s contrarian real estate investment philosophy to owning a team, and it would appear that Wolff intends to hold on until his vision, a new ballpark, is achieved. There’s no bigger capital investment for a sports franchise than building your own stadium. After that, who knows?

Also, it’s a bit much to think that these hotel sales will suddenly mean hundreds of millions will get plowed into a ballpark. That’s not how it works. A ballpark will be financed just like every other ballpark because no one invests cash in a stadium these days and it’s crazy not to take advantage of low interest rates.

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In other news, Evan Weiner has a good overview of the history of territorial rights and franchise moves.

The SNY (Mets) and YES (Yankees) networks are under pressure to renew carriage deals with satellite providers Dish and DirecTV.

A vigil will be held tonight in LA for Bryan Stow, the Giants fan who was beaten outside Dodger Stadium after last Thursday’s Opening Day game. The Giants will dedicate their Friday opener to Stow. The reward for his assailants’ arrest has been upped to $100,000. Stow is a 42-year old Santa Cruz paramedic and father of two.

If you haven’t read it yet, read Josh Koehn’s feature for Metro from last week. It’s about San Jose’s efforts thus far, and when coupled with Robert Gammon’s 2006 Fremont-oriented piece for the East Bay Express, should bring anyone with a passing interest up-to-date.

Oakland City Attorney John Russo appears to be on his way to becoming the next Alameda City Manager.

Cuts to Caltrain service will not be as bad as once feared, though the Giants and some secondary stations are getting the brunt of it.

  • Weekday service will be slashed from 88 daily trains to 76.
  • Special service, such as Giants pre and postgame trains, will be cut.
  • Four lightly used stations will be closed on the weekdays, several more will be closed on the weekends.
  • Fares will rise 25 cents.

It could have been much worse.

04.05.11
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More contraction B.S.

Forbes’ Mike Ozanian mused about contraction yesterday:

From what I am hearing, I doubt there will be any baseball at Tropicana Field after 2014 even though the team’s lease runs to 2027.

The funny part is that in the comments, someone pointed out to him that a second team would have to be contracted to make it work, which he casually acknowledged and then pointed the finger at the A’s.

Today the blowback has begun, from Craig Calcaterra’s brief and annoyed response to a much lengthier one from Maury Brown. That follows what Ken Rosenthal wrote six weeks ago, which I deconstructed in short order. None of the sensible arguments against contraction have changed. They’re just not noisy or loud enough.

Consensus appears to be that MLB is doing this to win concessions against MLBPA, which I find barely plausible at best. Instead, I think it’s more appropriate to look at the more hidden agenda. The endgame for the A’s and Rays would involve having New Yorker Stuart Sternberg own Mets and Los Angeles resident Lew Wolff own the Dodgers. Nevermind that Wolff owns less than 10% of the A’s, he could conceivably bring on big money partners to take on the rest of the Dodgers, a team with a $800 million franchise value.

It’s far more likely that interests in the two largest markets in the country want in on some kind of ownership piece and are on the outside looking in. They see Sternberg and Wolff as ways to get in The Lodge, and the greater the FUD spread about Fred Wilpon and Frank McCourt, the better their chances are. MLB is happy to entertain the notions for now, since they ultimately have the power to act on them – or not act on them, which is most likely. That’s a great strategy, as long as you’re only looking at things through a very narrow scope. Big picture, none of this makes any sense. As I argued in February, MLB has to get its own house in order before confronting MLBPA on any major issues. To get the Mets and Dodgers healthy and properly functioning again, it makes more sense to get new, non-crony blood owning those teams. There will be willing buyers, it’s just a matter of whether prospective buyers will balk when they look at those teams’ debt positions.

The debt and revenue problems for the Mets and Dodgers have far greater implications leaguewide than the A’s and Rays getting a combined $50 million in revenue sharing every year. When the Mets and Dodgers have large revenue and attendance drops, it hurts the league much more than changes to the A’s and Rays’ revenue profiles. While MLB could deal with all four teams in one fell swoop, a deeper look reveals that it’s not nearly as convenient as it appears. Wilpon and McCourt continue to be wrapped up in nasty litigation battles, and while McCourt’s divorce proceedings could end soon, the Wilpon-Madoff mess could stretch throughout the rest of the baseball season, if not longer. And if Bud Selig is as paralyzed by the Dodgers’ situation as he is by the A’s-Giants T-rights ordeal, nothing improves. Would that lack of progress and decisive action surprise anyone out there?

04.04.11
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A Royal Dilemma

Two home games remain for the Sacramento Kings, before they presumably fire up the moving vans and head south for Anaheim, whose city fathers welcome to soon-to-be Royals with open arms, a much more updated arena, and a much richer and larger fanbase. One real hangup remains: the Maloofs owe the City of Sacramento $67 million of a loan they inherited from former owner Jim Thomas, plus a $9 million prepayment penalty on that loan.

Sacramento has gone so far as to write Anaheim a letter informing them of the Maloofs’ current debt obligations in an effort to influence Anaheim away from the franchise. So far, that letter has ony drawn scorn from the Maloofs, who don’t want Sacramento interfering in “business matters.” Anaheim approved $75 million in relocation costs and improvements plus a practice facility for the team, which just about seals the deal. On the Kings website there are no efforts to sell season tickets for the 2011-12 season, and the only promotional item is Fan Appreciation Night on the 13th, the final game in Sacramento Kings history against the hated Los Angeles Lakers. Thomas was seen last Friday in one of the Maloof brothers’ courtside seats, probably to see the team he brought to Cowtown play for the last time.

That leaves the matter of outstanding debt, which the cash-strapped Maloofs have promised to pay but haven’t said how they would do it. If they default, they will lose the arena and the 183 acres that surround it, plus Sacramento would get a $25 million stake in the Anaheim Royals. Chances are that the Maloofs don’t want Sacramento to have any stake in the team, so it could offer up the arena, land and a smaller cash payment to settle up. Two weeks ago, San Jose and Santa Clara County settled an ongoing debt issue in part by transferring real estate from the City to the County. It’s not hard to see the Maloofs offering the same kind of deal, since a) they won’t need the arena after they leave, and b) It’s a good asset the City could get for a song, warts and all.

Assessed value of the entire property comes to $61.7 million, with $45 million of that in the arena and practice facility. The assessed value of the arena may be overinflated due to the state of distress that the arena is in and the renovations it needs going forward. The assessed land value is a mere $16.7 million, or $91,000 per acre. Right now, even with that pittance of a land value, for a revenue-needy city such as Sacramento it may as well be worth nothing. There will undoubtedly be some in city government who feel that way. Then again, there are serious long-term strategic opportunities should Sacramento move to acquire the arena.

The uncertain future of redevelopment makes acquiring the land a risky proposition. To fund any improvements to the land, the City would have to create a redevelopment district from which they could collect tax increment after the land was flipped to a developer. (In short, this is the practice of landbanking.) As attractive as the land may have been 10 years ago, it’s not the least bit attractive right now – unless someone is dying to build right now. Given Sacramento’s horrendous housing market, that seems highly unlikely – though that hasn’t stopped recent Sacramento arena proposals from including a large infill housing development component. In any case, should redevelopment agencies cease to exist after this summer the City would have to rush to approve the deal and the creation of the redevelopment district.

The point of accruing tax increment would be to fund improvements for the arena, whose leaky roof and outdated, cramped quarters are pushing the Kings to vacate their premises. If Sacramento is to have any hope to attract a future NBA franchise, at least $250 million in improvements would have to be in order. That would include the following items:

  • Fix the roof
  • Dig 20-40′ further down (a la Oracle Arena) to create a more spacious, flexible event floor
  • Add a club concourse and seating
  • Add another suite level and revamp suites
  • Redo the seating bowl and replace seats
  • Replace scoreboard and signage

If Sacramento were not to worry about getting a replacement team, it could opt for a more modest ($50-100 million) spiffing up of the arena, which would focus on must-fix items such as the roof and the back-of-the-house. The City could immediately turn management of the venue over to a dedicated operator like SMG, AEG, Global Spectrum, or SVSE. The purpose of the arena would be to continue to attract concerts, ice shows, and other non-team entertainment to the region. The arena could have enough improvements to be once again included in the NCAA basketball tournament rotation. All of this has some significance, as the closest large indoor venues to the City are the 8,000-seat UC Davis Pavilion and 11,000-seat Stockton Arena. Those venues are 20 and 50 miles away from Sacramento, respectively. The outdoor Sleep Train Amphitheatre is 30 miles north in Wheatland and ony operates in the summer. Those distances would leave an entertainment black hole in the capital city if the arena were not to continue operating. Even with the mistrust of Maloofs and the need for cash, it may be an offer that Mayor Kevin Johnson and the City Council can’t refuse.

The future of basketball in Sacramento looks bleak, to put it mildly. Even if it were to get a brand new arena deal done in the next six months, there’s no guarantee they’d ever get a NBA franchise anytime soon. That’s Mayor Johnson’s strategy at this point, and it may be the only sound one if you hold out any hope for major pro sports in Sacramento. Johnson could turnaround and pitch the ARCO site to the A’s, but the gloomy market there makes funding a $400 million ballpark extremely difficult, let alone an arena renovation. There are forces who want to forego ARCO and build an arena downtown, as expensive and complicated as it sounds. It’s going to be tough to get a good deal in place, and I don’t envy the decision makers up there one bit.