News for 5/27/11

Sacramento has the feasibility study for its new arena at the its website, along with additional renderings. Besides the lack of financing plan that would have to be determined by the end of the “100 Day Plan,” I noticed one other thing. As part of the effort to cut costs, there is no separate club level. Instead, the club seats are largely confined to one side of the arena and courtside sidelines, with the club lounge taking up part of the main concourse.

Angle view of ICON Taylor arena interior. Club seats are colored blue-violet. Arena is designed to host a hockey team as well as the Kings.

While the Maloofs continue to maintain that the Kings are not for sale, as many as three groups have surfaced that could buy the franchise if it were available. Ron Burkle continues to be the popular choice, with the “mystery Nevada businessman” being second. Now a group fronted by former King Chris Webber has surfaced, and its chief moneyman is a Filipino businessman named Manny V. Pangilinan, or as he’s known in Manila, “MVP.” With frequent talk of Chinese interests getting a controlling piece of a NBA franchise, it would be somewhat poetic to have a Filipino be the first Asian to do so. FWIW, there are three national sports in The Philippines: basketball, boxing, and cockfighting. It’s not going to make me anymore a Kings fan than Erik Spoelstra (who is half-Filipino) being the head coach of the Miami Heat makes me a Heat fan, but it’s something to be proud of.

Another week, another arena proposal. This time it’s in Baltimore, a city whose 50-year old arena hasn’t fielded a major franchise in nearly 40 years. 92-year-old construction magnate Willard Hackerman is willing to pay for the arena as part of an elaborate redevelopment plan along the Inner Harbor. Like Sprint Center in Kansas City, the arena would be built on spec, without a major pro tenant. Baltimore has been without an indoor sports franchise for so long that it’s hard to know if one would be successful there. It appears that Hackerman is willing to give it shot. Hackerman’s company, Whiting-Turner, built M&T Bank Stadium, home of the Baltimore Ravens.

ESPN’s Jim Caple came out with his “official” MLB owner’s rankings. Lew Wolff placed 17th, higher than I would’ve expected. Must be the national media bias.

Here on the blog, 980 Park concept originator Bryan Grunwald received word from the City of Oakland that his concept will in fact be part of the Victory Court EIR, hopefully as a full alternative. Unfortunately, Grunwald also was informed that there is no schedule for the release of the EIR. With MLB moving glacially and putting the A’s on the backburner, I suppose it affords the City time to be thorough. Weren’t they supposed to have the whole thing done (and certified) in around a year?

On the redevelopment tip, there are now three bills working more-or-less in conjunction to provide a less wasteful alternative to the current scheme, which is enshrined in the California Constitution. A fourth bill works against redevelopment, as wished by Governor Jerry Brown. Here’s the list:

  • SB 286 would restrict how projects are funded. Currently redevelopment dollars are a free-for-all as long as they can be applied to a “blighted” area. If this bill passes money for stadiums and arenas would require a public vote in the affected municipalities.
  • SB 450 seeks to rein in waste by capping administrative costs, while pushing the requirement that 20% of funds be spent on affordable housing, to the forefront.
  • SB 214 would allow the creation of new infrastructure districts whose purpose would be to finance infrastructure projects (roads, highways, sewers, etc.).
  • AB 101 is the aforementioned anti-redevelopment bill. Should any municipality’s RDA have any surpluses after obligations are met, those surpluses would vest with the municipality instead of being sandboxed for redevelopment purposes.

The University of Michigan wants to expand The Big House to 120,000 seats. Might want to fix the football program first.

If you wear a “Yankees Suck” T-shirt at the O.co Liseum next week, will you get thrown out as this lawyer did at the Trop last week?

Added 2:15 PM – The Minnesota legislative session ended with no action on stadiums for the Minnesota Vikings and St. Paul Saints. A deal would have to be done in a special session.

Keeping the Kings commands a princely sum

NBA Confidential and SI.com writer Sam Amick snagged a copy of ICON Venue Group’s presentation to the City of Sacramento detailing the options for a new arena. Sadly, the copy is a scanned version of a black-and-white printout so it doesn’t look pretty, but it does have the numbers and the important details.

The arena, designed by Populous, looks like a scaled down version of Amway Center or Staples Center. Arena capacity is pegged at 18,594 seats, with the cost being $387 million. Here are the vital stats:

The reduction in square footage helps keep costs down, otherwise the price tag would soar to $500 million or more. Other amenities aren’t as plentiful, such as elevators or specialty bars. The ratio of standard suites (12+ attendees) to mini suites (4-6) is also interesting in that it’s an indicator of where the suite-buying market’s interests are. The full mix of premium seating options (in green) shows just how many ways teams and arena operators can squeeze out maximum dollars out of a venue, and how ARCO Arena/Power Balance Pavilion was devoid of those options.

Populous took pains to place the arena at two possible sites. One is the south end of the existing arena’s parking lot. The other is the downtown railyards site. Site prep costs for the two are very similar, separated by only $3+ million. Soft costs are not included. The question, then, becomes a matter of figuring out the financing piece. To that end, the preso outlines a “100 Day Plan” that would allow the City and other parties to figure out the financing model for the publicly owned arena. If that can be identified, the EIR process can start in September and funding sources can be secured by next March’s NBA relocation deadline. If all goes according to plan, construction would start in January 2013 with a May 2015 opening date, after the 2014-15 regular season is over. Accelerating the schedule to finish by the start of the season would incur some unknown additional costs.

Last week the Maloof brothers sent Mayor Kevin Johnson to Secaucus, NJ to be its draft lottery representative, which was a great gesture. Unfortunately for the Kings, they did not win the lottery and were stuck with the #7 pick. If the Maloofs and KJ really want this to happen, they’re going to need a little more luck when it comes time to complete that 100 Day Plan.

News for 5/16/11

The Houston Astros and current owner Drayton McLane have announced that the team is being sold to Houston businessman Jim Crane for $680 million. Approval should take 30-60 days. Among the hangups were discussions over the Astros’ share of a new regional sports network to be shared with the Houston Rockets.

The Maloofs have agreed to share the Sacramento Kings’ financial data with pro-arena interests in the Capitol. This is a departure from other teams in other leagues who are generally reticent to share such data. As part of ongoing CBA discussions, owners have similarly shared data with the players’ union.

George Vukasin, Jr. of Peerless Coffee alerted me to this editorial in the Trib about eminent domain. A bill passed in 2007 tightens controls over how eminent doman can used to the point that “blight” has to be more clearly defined than it has in the past. Both Oakland and San Jose could be affected by these restrictions enough that land acquisitions could be further delayed or even stopped altogether.

Sacramento’s Matthew Mahood was named CEO of the San Jose Silicon Valley Chamber of Commerce. As for whether this will make a difference for San Jose’s pursuit of the A’s, Mayor Chuck Reed said this:

“The issue of the A’s stadium is way beyond what the chamber president can do,” Mayor Chuck Reed said. “It’s all between Lew (Wolff) and Major League Baseball.”

April’s radio ratings are scheduled for release today. We’ll get to see how the KBWF and KTRB shakeups have affected the Bay Area’s sports radio landscape. Update 2:17 PM – And they’re out.

As long as KBWF’s only permanent host is Chris Townsend, KBWF will struggle to gain listeners. Hopefully they can get that straightened out in short order. It’s a long game, and if the first goal is to supplant 1050, mission accomplished. I know that many have been clamoring for Rick Tittle to take the 10-1 slot. I’d rather him take a night slot with a more established name at midday.

Update 3:30 PM – ESPN is reporting that the 9th Circuit Court of Appeals has granted the NFL owners a stay in the lockout, meaning the lockout is still on. They have also asked the owners to submit a new proposal to the players. The two sides are in mediation today and it looks like the session will be extended several hours longer to accommodate the new proposal. Retired players rep Carl Eller said on SportsCenter that progress is being made, which could be very promising. Both the NBA and MLB are watching these talks carefully (NBA moreso).

Added 5/17 11:15 AM – From Baseball San Jose (via LoneStranger), San Jose Mayor Chuck Reed sent a letter to Bud Selig asking for a decision.

Governor Jerry Brown sent out his revised budget proposal for May, which continues to include a call to dismantle all redevelopment agencies despite growing revenues statewide.

Sacramento needs a partner

In 2005, AEG started construction of an arena in Downtown Kansas City. The arena already had a naming rights sponsor, hometown telecom Sprint, a year earlier. Thanks to that deal and Kansas City’s need for a new arena to replace the aging Kemper Arena, the Sprint Center was built on spec, without a real major league tenant. The funding breakdown for the $276 million facility was as follows:

  • AEG provided $54 million upfront
  • The NABC (National Association of Basketball Coaches) gave $10 million
  • Sprint’s naming rights deal was $2.5 million per year for 25 years, reduced to $1.7 million if no NHL/NBA franchise moves in
  • New $4 rental car fee
  • $1.50 per room/night hotel tax

As of 2009, debt service was being paid off thanks the higher-than-expected tax revenues. AEG was running the venue profitably despite not having a team tenant. Ironically, it could be Kansas City, the city from which Sacramento lured the Kings, that provides a blueprint. That’s not to say it’s a good financing plan for other cities to emulate, but thankfully it hasn’t crippled KC the way the Coliseum deal has crippled Oakland and Alameda County. One hurdle Sacramento faces as far as the taxation part goes is that one potential source, airport passenger facility fees, has already been sworn to SMF’s airport modernization project otherwise known as “The Big Build.”

Mayor Kevin Johnson’s plan is to have an arena and entertainment complex in Sacramento, with or without the Kings. So far ideas have included creating a six-county authority from which one or more taxes could be raised, and the usual mixed-use mega development from which proceeds could help fund the arena. Sacramento has never done a large, modern, publicly financed venue on its own. Raley Field was done by Yolo and Sacramento Counties and West Sacramento. ARCO Arena/Power Balance Pavilion was privately financed. The hard slog will be in formulating the financing pie. It’s safe to assume that the cost will be at least $400 million not including the land (Orlando’s new arena cost $380 million in construction alone).

Sprint Center’s being on spec is rare and unusual, especially when compared to other arenas throughout the NBA and NHL.

Ownership status of arenas throughout the NBA and NHL. Privately owned arenas in bold.

Notice a pattern there? The top list has ten arenas shared by two or more teams. and almost all of them are privately owned and operated. Such a business model allows the operator to work as hard as possible to fill its schedule and maintain a modern. competitive venue. Now there’s some talk in KC about whether AEG really wants a team at Sprint Center, since it could cost the operator prime concert dates. That’s not the way AEG operates Staples Center, where the company has to juggle the Lakers, Clippers, NHL Kings, Grammys, Pac-10 hoops tourney, and numerous concerts. For Sacramento to pull off an arena deal, it will need to partner with someone who doesn’t have a hidden agenda. Sacramento may have numerous choices, all of them somewhat problematic. It’s unclear how much cash the Maloofs could put up towards an arena. Would they relinquish the right to operate the arena to company like AEG in order to become a tenant? If AEG or another company were to build the arena, could they partner with the Maloofs, or would they want someone they’re familiar with in the captain’s chair, such as Ron Burkle? What role does Chris Webber play in any of this?

It’s not just about getting an arena deal done. It’s about getting a good arena deal done. All of the moving parts, different parties, and divergent goals are guaranteed to make a deal difficult, though not impossible. If KJ can get contributions from a team owner, a separate venue operator, and a big naming rights sponsor, he’ll be off to a very good start. Then he can start to frame discussions around whatever public contribution will be required. It’s an issue that he has chosen to become a plank in his economic development platform, and his second term probably rides on the project’s success or failure.

Kings to stay at least one more year in Sacramento

Here’s the press release from the Maloofs:

MALOOF SPORTS AND ENTERTAINMENT STATEMENT

“Out of respect to Kings fans and the regional business community, we have decided to remain in Sacramento for the 2011-12 season. The fans’ spirit and energy, specifically our season ticket holders, has been remarkable and we are truly thankful for their loyalty. We also are greatly appreciative of the support from our corporate sponsors as well as other local businesses that have come forward in recent weeks.

Additionally, we would like to take this opportunity to send a heartfelt thank you to the loyal and hardworking team members within our organization. From the game night staff to the front office, coaches, and players, we are grateful for their professionalism and devotion.

During this process, Mayor Johnson has strongly indicated to both the community and the NBA that he is capable of getting the support to build a state-of-the-art entertainment and sports facility that the Sacramento Region and the tremendous Kings fans so rightly deserve. We look forward to seeing Mayor Johnson bring his vision to reality. However, if an arena plan cannot be finalized in a timely fashion, the NBA¹s relocation committee has assured Maloof Sports and Entertainment that it will support an application to move the franchise to another market starting in 2012-13.”

A report from the ICON group is due later this month. That information and perhaps another arena proposal from an “anonymous” Nevada businessman will frame the discussions for a new venue going forward. The scary part for Kings fans and Sacramento citizens is that it doesn’t appear as if the Maloofs are on the hook to do anything as part of the effort to stay. Presumably there should be some sort of contribution from the ownership group, but what will that be? If they’re cash poor, what can they provide other than the old arena, which it appears they’d give up anyway if they were to move? Right now this has to feel good for fans, but the task they and Mayor Kevin Johnson is daunting to say the least. Even if Ron Burkle were allowed to buy the team from the Maloofs, it’s not realistic to expect him to spend $400 million out of pocket on an arena. At least they’re getting a year, which is more than you could say for many other teams’ fans.

Bidding war is ON in Sactown

I had no idea the Sacramento Kings cleaned up this well. A report by FOX40’s Jim “Scoopmeister” Crandell indicates that there is now a third group interested in the Kings and a second arena deal in the works.

WHA?!?!?!

The third group, which is publicly anonymous for now but known to the Maloofs and NBA brass, is headed by a Nevada businessman. Their intent is to build an arena in Sacramento. They claim they will match any offer by Henry Samueli. Their arena plans involve a 25,000-seat, “community funded, community owned” arena. That’s right, 25,000 seats. The facility would include a 5,000-seat amphitheater and an indoor aquatic center. Obviously there are enough holes to drive a fleet of trucks through at this point, so I’m more than a little skeptical. Regardless, the offer has been submitted so it must have passed some basic scrutiny.

This comes at the same time Samueli and Anaheim have bumped up their offer to the Maloof brothers. The offer now stands as follows:

  • $70 million upgrades
  • 6-year TV deal, at least $24 million per year on multiple networks
  • $75 million loan

The loan and TV parts are the major changes. Is that enough?

Not to be forgotten, Ron Burkle remains in the picture and the ICON group has its arena plans (not related to the aforementioned plan) coming later next month.

The Maloofs are on the fence. They’ll have a tense weekend to make their decision, unless David Stern gives them yet another extension past the Monday deadline. Wouldn’t it be something if, years later, we found out that this was all a ruse to get a new arena in Sacramento for the Kings?

KJ names names

Sacramento Mayor Kevin Johnson is on a roll. He made a great preso to NBA brass last week. He received the NBA committee with a phalanx of Cowtown business interests this week. Yesterday he even released the list containing 30 business interests willing to commit up to $10 million for the Kings next season. The list itself doesn’t look that impressive at first glance, but you know what they say about having a bird in hand…

  • American River Packaging
  • Anheuser-Busch/Markstein Beverages
  • Arden Fair Mall
  • AT&T
  • Barry Katz
  • Brown Construction Inc
  • Burger Rehabilitation
  • Buzz Oates Group of Companies
  • Capitol City Escrow
  • Golden 1 Credit Union
  • Greenberg Traurig LLP
  • Hallsten Corporation
  • Jiffy Lube
  • Kamilos Group
  • Kevin Nagle Foundation
  • McDonald’s
  • Mechanics Bank
  • Rabobank
  • Sacramento Jet Center
  • Sacramento Rivertrain
  • Sleep Train
  • SMUD
  • SPI Solar Power
  • SureWest Communications
  • Sutter Health
  • Synergex
  • Thunder Valley Casino
  • VSP Vision Care
  • Weintraub, Genshlea Chediak
  • Wells Fargo
  • Western Health Advantage
  • Zoom Imaging Solutions, Inc./Toshiba

It’s actually a decent list. You’ve got banks, a minimal public sector presence, some big commercial names, and local companies. I’d say KJ has done the equivalent of his amazing dunk over Hakeem Olajuwon during the 1994 NBA Playoffs.

Of course, that particular series didn’t actually go that well for KJ’s Suns squad as they were eliminated by the Rockets in Game 7. That’s a reminder of how long the game really is. These moments are nice and maybe even a little cathartic for Kings fans. They aren’t the end result. Getting an arena is. At least some eyes have been opened.

Related: Forbes’ Mike Ozanian has some franchise values that vary based on location.

Cities Simpatico

Holy Week finds Oakland and Sacramento in similarly uncomfortable places. The new sports radio station (95.7 FM) has been talking about the A’s stadium fate all week, and that will only continue on Monday when Chris Townsend interviews both Doug Boxer and Chuck Reed during the first hour. A death watch has hovered over Sacramento since the Kings’ last regular season game of the season ten days ago. Both cities have had highly active grassroots groups rally the resources to get their respective higher powers (MLB/NBA) to give their homes another shot, perhaps their last. So it may be fitting that during a religious week, the Kings appear to be resurrected – if for a year.

As the process for both the Kings and A’s drags out, comparisons will be made between the teams, cities, owners, and fanbases. The easy (and somewhat lazy) thing for the media to do would be to lump them in together. To get a better read on where either team might end up down the road, it’s important to highlight the similarities and differences between each team’s current predicament.

What’s similar

Admittedly, this is the easy part. Both the A’s and Kings play in outdated venues, the histories of which have been well documented here and elsewhere. Both cities have somewhat unfair reputations as not being particularly corporate-rich and both are government towns. Oakland is the county seat and it has the Port, UC, MTC, and BART. Sacramento has the Capitol and numerous agencies associated with it. Both cities have been hit by crushing unemployment. There’s a sense that either team’s ownership group hasn’t exactly given 100% effort towards a new venue in their respective home cities. Lew Wolff’s last try in Oakland was in 2006 (Coliseum North), and the Maloof brothers infamously dropped support for a railyards arena in the middle of the campaign – also in 2006. Both venues’ financing plans involved the selling of land entitlements. Those plans crumbled in the wake of the real estate market collapse. While neither party has verbalized it, it’s that collapse that has caused Wolff and the Maloofs to have doubts about any financing plan in Oakland or Sacramento. Now nearly five years later, Wolff is looking 40 miles south whereas the Maloofs are looking 400 miles south.

What’s different

This stuff is harder to explain, but it gets at the heart of the problem. Most of this it is inside baseball, making it hard to pin down or easily explain away. Unfortunately the differences are more likely to be responsible for what eventually happens than anything else.

  • Markets. The Kings would be moving out of the Sacramento market (2.1 million population) which it has to itself in order to inhabit Orange County, part of the Greater LA market (18 million). LA already has six major league teams. The A’s would move within the Bay Area market, which would preserve TV and radio presence but cause upheaval among available fans for attendance and sponsorships.
  • Venues. While both the Oakland Coliseum and ARCO Arena are antiquated, that’s where the similarities end. The Coliseum is owned by the City of Oakland and Alameda County. ARCO Arena is owned by the Maloofs. That’s an important distinction because of who to “blame” regarding the state of those venues. The Coliseum has received few upgrades and limited maintenance since the Raiders came back, thanks in part to very limited public funds. Kings fans have targeted the Maloofs due to their seeming neglect of their asset.
  • Team ownership styles. The Maloofs saw fit put a well-paid team on the court as long as they were competitive, going over the NBA’s salary cap on a regular basis during the glory years (1998-2004). Ticket prices were in the upper half of the league to help pay the bills. The brothers’ business fortunes have taken a tumble, which has caused them to field low payroll teams filled largely with young players. Wolff has been practicing that philosophy for years with Billy Beane at the helm, though payroll for the A’s more a function of team revenue than anything else. Thanks to frequent discounting, A’s tickets are among the cheapest in MLB.
  • Television complications. It is believed that the Maloofs are going to Anaheim lured in part by much greater television revenues. In Sacramento, they’ve been getting $11 million from CSN California, one of the lowest annual deals in the NBA. Earlier this week officials from CSNCA have suggested that they would bump up that number if the Kings were to stay, though they didn’t say how much. As part of the move, the Kings would be on Henry Samueli-owned KDOC for a year until the Lakers’ deal with Fox Sports ends, then that slot would be available. The KDOC deal is worth $20 million for the year. However, LA’s pre-existing NBA teams, the Lakers and Clippers, object to the move on the grounds that they’ll be negatively impacted. In the Lakers’ case, they could lose up to 10% of their newly inked deal with Time Warner. That deal could provide as much as $5 billion over 25 years, and would take a hit if a third team such as the Kings/Royals played in the market. Considering the opportunity cost for the league, there’s now a legitimate question of whether new TV revenue in SoCal for the Kings/Royals makes up for that lost revenue for the Lakers.
  • Antitrust exemption. MLB’s longstanding exemption allows the commissioner to control all franchise moves, which has made baseball the major sport with the fewest moves in the modern era. The NBA has no such protection, which has allowed nine franchises to move since 1972. During the same period MLB has only moved one franchise, the Expos to DC, and that was orchestrated by Bud Selig. Whatever the NBA decides, Stern doesn’t have to worry about actions that may set a precedent since Stern’s already been through it. The possibility of setting a precedent with the owners seems to paralyze Selig, who was once an owner and wants to remain buddy-buddy with the owners. Stern may be the opposite in that he’s often received criticism that he’s more supportive of the players – specifically the stars – than the owners.
  • Timeline. Selig’s panel has been deliberating for two years with no end in sight. In the last few days, David Stern and his committee have essentially set a real end date to the process, March 2012 – if the Kings are stay in Sacramento as has been reported. If the move is approved, the moving trucks will be at ARCO faster than you can say “Mayflower.” The Maloofs have pushed out a deadline to apply for the move, but that application and the decision making process are not expected to drag out for very long.
  • Sales pitch. Let’s Go Oakland may have gotten some attention with its $500k in pledges last summer, but that’s nothing compared to what Sacramento mayor Kevin Johnson has put together. Working with Denver consultancy ICON Group and Sacramento-area civic and business leaders, Johnson has gotten $10 million in commitments to keep the Kings in town. Johnson also may have dazzled the NBA’s brass in a way only a young upstart who isn’t a career politician and had a lengthy career as an All Star point guard can do. San Jose’s sales pitch has been glacial, minimal, and could be boiled down to a MS Project chart with milestones. Anaheim’s pitch has been rushed to the point of incoherence.

At this point, it’s all up for grabs for both teams, all of the cities, all of the owners. MLB and the NBA have upcoming collective bargaining sessions, though MLB’s should be less contentious. It’s hard enough to know how all of this will turn out if there weren’t a ton of external factors. Many think that the simplest path is to have money rule the day, and that cities like Oakland and Sacramento haven’t a chance. Hardcore fans hold out hope for a white knight like Ron Burkle or Larry Ellison to save the day. There’a a well-earned feeling of solidarity between Oaklanders and Sacramentans, with some being fans of both the Kings and A’s. Whatever happens, we’ll give it a thorough look. Just sit back and buckle your seat belt. It’s gonna be a bumpy ride.

Amick: Sacramento may get reprieve after all

Turns out the rosy numbers expected to save the Maloofs may not be materializing as they hoped, according to NBA writer Sam Amick. Hesitance on commissioner David Stern’s part (and the owners’) ostensibly rests on three issues:

  • TV money isn’t as impressive as it could be. A new $20 million/year contract not with Fox Sports, but rather Henry Samueli-owned KDOC, is more than the $11 million/year the Kings are getting from CSNCA, but perhaps they could be getting more considering how large the SoCal market is.
  • Stern and the owners are concerned about the nature of the relationship between the Maloofs and Samueli. Are they spooked about the spectre of massive debt in light of what’s happening with the Dodgers? Is this about setting a precedent, or not wanting an outside bidder to have too much control over the process?
  • Sacramento Mayor Kevin Johnson claimed he had $7 million in corporate commitments. Amick poses this as a, “Why couldn’t the Maloofs get this?” problem though frankly, we don’t know enough to make a judgment. Is that $7 million for a new downtown arena? An updated ARCO? What does it represent?

The key indicator may be that the Kings’ ticket office is getting instructions to start selling season tickets again. Short term, it would allow Sacramento to keep the team for at least another year while it continues to work on an arena plan. Yet again, that’s what it comes down to. Unless there’s a city/voter-approved plan, all of this is delay, not solution. The most recent NBA arena project, Amway Center in Orlando, required $50 million in cash upfront from the Magic. Shouldn’t that at least be the starting point for the Kings in Sacramento?

Translating that to San Jose, this raises some question as to whether a second NBA team could work in the Bay Area. There’s no way a second NBA team will get $20 million in local TV rights, probably much less. Keep in mind that such a team would probably end up at CSNCA, whether or not the Kings were still in Sacramento. Stern’s goal is ostensibly to get a moving team on a much better economic footing, not a marginally better one.

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.