SBD/March 28, 2011/Franchises

Anaheim Outlines $75M Proposal To Lure NBA Kings From Sacramento

Kings reportedly have filed to trademark the "Anaheim Royals" nickname
Anaheim city officials "launched the process Friday of financing the Kings' potential relocation" to Honda Center, releasing a "proposed financial package that includes $25 million to renovate the 18-year-old arena and $50 million in 'transition costs,'" according to a front-page piece by Kasler & Lillis of the SACRAMENTO BEE. The Anaheim City Council is "set to vote on the package Tuesday at a meeting dedicated to this one issue," and while sources said that the NBA team "hasn't yet agreed to relocate, the financing would be a crucial piece of a deal." Anaheim is involved because it owns Honda Center and would issue the bonds, but the "debt would be repaid" by Ducks Owner Henry Samueli, who manages the arena. Anaheim Mayor Tom Tait in a statement said the package, if approved, "will clear the path for a professional basketball team to call Anaheim home." A source indicated that the $25M "would pay for NBA-caliber locker rooms, office space and other amenities." The source added that the $50M in transition costs "would include the relocation fee the Kings would have to pay" the NBA, which is split among the 29 other teams. Kasler & Lillis noted Kings owners the Maloofs would have to pay a $76M exit fee to the city of Sacramento, and that "must be immediately paid in full if the team leaves." Anaheim city officials on Friday "released a series of documents, including an unsigned 103-page lease" between Honda Center and an NBA franchise identified only as "TeamCo." The lease would expire in 2026. None of the documents mention the Kings or the Maloofs (SACRAMENTO BEE, 3/26). The Anaheim City Council's actions "are the first official acknowledgement that steps are being taken to bring the Kings" to Orange County for the '11-12 season (ORANGE COUNTY REGISTER, 3/26).

INSIDE THE DOCUMENTS: In L.A., Lance Pugmire noted Anaheim is "taking steps to assure its place on the league map." The resolution requires the NBA team to carry Anaheim "as its first word and sole geographic identifier." Anaheim Finance Dir Bob Wingenroth said, "Several private investors have expressed a desire to purchase all of the bonds." Sources indicated that Samueli is "among them" (L.A. TIMES, 3/26). In Sacramento, Marcos Breton noted the documents released Friday indicated that the Maloofs "will go from wanting to control everything in Sacramento to virtually being tenants" at Honda Center. The Maloofs have "demanded control of any and all revenue streams related to a new arena in Sacramento if they were to keep the Kings," but the proposed Anaheim deal is "full of significant concessions" to Samueli. The documents reveal that the Maloofs would control "only 50 percent of parking revenue and only 50 percent of food and beverage revenue generated for NBA games. The Maloofs "would not control the Honda Center naming rights," and under any new naming-rights deal for Honda Center, they "would be entitled to only a third of the money." The Maloofs would receive 100% of "NBA-related advertising inside Honda Center," but they would get "only a third of every other form of arena advertising." The Maloofs also would "share in no revenue from NHL games, concerts or any other events at Honda Center" outside NBA games (SACRAMENTO BEE, 3/27). In California, Randy Youngman notes were it "not for Samueli, it's safe to say this deal could not and would not get done." Without his "deep pockets," it is "questionable the Maloofs would have the money needed to pay the NBA's hefty relocation fee (likely in the $30 million range) and pay off an existing loan with the City of Sacramento" (ORANGE COUNTY REGISTER, 3/28).

SIGNED, SEALED, DELIVERED? The Kings on Saturday issued a statement "rejecting a plan by former Kings officials to renovate Power Balance Pavilion." The group of Sacramento-area officials spoke with Kings co-Owner George Maloof on Friday in a "half-hour phone conversation." City Councilman Rob Fong and County Supervisor Phil Serna "also participated in the conference call." The Kings said, "A representative of the Maloofs listened to their plan in depth, but they do not have the financing in place and a renovation of the existing structure is not an adequate solution" (SACRAMENTO BEE, 3/27). In N.Y., Dan MaGrath wrote Kings fans "have finally given up, and Sacramento is resigned to their departure." R.E. Graswich, a top aide to Sacramento Mayor Kevin Johnson, said, "Right now the mood is good riddance, although I’m not sure it has sunk in." He added, "We’ve got bigger problems -- 12.5 percent unemployment, people being laid off or furloughed, their homes in foreclosure. The Kings would be a nice distraction if they were any good, but they’re not" (N.Y. TIMES, 3/27).

HAS HIS PHIL: Lakers coach Phil Jackson "thinks NBA owners are in fantasyland if they approve" the Kings' relocation to the L.A. market. Jackson on Friday said, "What other metropolitan area has three teams in it? It's ridiculous to put another franchise in this market. It just doesn't make sense to do that" (L.A. TIMES, 3/26). He added, "To have another team, 40-45 miles away, that puts a lot of pressure on everybody in the area" (ESPNLA.com, 3/26). Angels Owner Arte Moreno yesterday said, "I look at the metropolitan area and say how many basketball, hockey, baseball, basketball and NFL teams can you have? We also have a couple of major universities in USC and UCLA. And Cal State Fullerton and Long Beach State have terrific baseball programs. You're competing with them for media time and advertising dollars. How much discretionary income and advertising dollars do people have?" (LATIMES.com, 3/27).

HIT 'EM WHERE IT HURTS: ESPN L.A.'s Arash Markazi cites sources as saying that if the Kings move to Anaheim, the Lakers' new 20-year TV deal with Time Warner Cable "won't be as lucrative as it once was." Last month, the Lakers "agreed to an unprecedented 20-year television agreement with Time Warner Cable to distribute Lakers games and original programming across two regional sports networks in HD that will include the nation's first" Spanish-language RSN. Sources indicated that if a "third NBA team moves into the market, however, the Lakers' television deal will decrease by about just under 10 percent." Markazi notes the Lakers' deal with TWC "was viewed as a major blow for current rights holders" FS West and KCAL-CBS. But the Kings "could lessen that blow and create competition for viewers and fans in Orange County if they filled the void left by the Lakers on both outlets" (ESPNLA.com, 3/28).
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