SBD/April 11, 2012/Facilities

Maloofs To Detail Sacramento Arena Deal Concerns At NBA BOG Meetings

Maloof family expected to tell NBA owners they never formally agreed to deal details
Sacramento's "arena drama switches this week to Manhattan," the site of the NBA BOG meetings that begin tomorrow, where the Maloof family will "ask their fellow NBA owners for support in forcing the city to negotiate a better deal with the team," according to a front-page piece by Bizjak, Kasler & Lillis of the SACRAMENTO BEE. The Kings owners said that they "will bank on respect and understanding" from the league's BOG when they make their pitch. They are "likely to face opposition" from NBA Commissioner David Stern, who "has a close relationship with Sacramento Mayor Kevin Johnson and was instrumental six weeks ago in crafting the deal the Maloofs are questioning." The Maloof family is "expected to tell owners they never formally agreed to deal details, and that there are several elements in the tentative financing plan that need work before it gets their signature." Bizjak, Kasler & Lillis cited a source as saying that the Kings would "like more decision-making authority at the arena." The team also reportedly has "concerns about parking issues, wants more input on the design, and has issues with the proposed lease terms and revenue streams, among other sticking points." The current "term sheet" calls for the Kings to "sign a 30-year lease." Kings co-Owner George Maloof said his goal in N.Y. is to put the project "right back on track and start negotiating this thing again." Maloof: "We have been upfront, we have been honest, we have been very truthful" (SACRAMENTO BEE, 4/10).

THINGS FALL APART: In Sacramento, Ailene Voisin wrote that at some point -- "and for reasons that mystify many within the Maloofs' own inner circle -- the dynamic changed dramatically" with regards to the arena situation. While only the Maloofs "and a few others have access to their financial portfolio, their recent actions have incited the following perceptions: They don't want a deal; they don't like this particular deal; they have resolvable issues but are negotiating in [a] terribly awkward, ill-advised manner; they can't get a decent loan for the deal and are panicking; or they are exploring their options, including filing for relocation." Voisin wrote if the Maloofs "don't have the cash, they can bring in a major investor and redefine their role." One NBA owner said that Penguins co-Owner Ron Burkle "isn't the only billionaire intrigued by the prospect of landing a plum in the politically rich Sacramento environment" (SACRAMENTO BEE, 4/8). Also in Sacramento, Michael Shaw notes the Maloofs' new expressions of concern "suggest the chasm between the team and the city is wider than previously thought -- a gap that threatens to derail the project if a resolution is not reached within two weeks." The Maloofs' "chief worry is whether the project can be completed in time" for the '15 NBA season as promised (SACRAMENTO BUSINESS JOURNAL, 4/6 issue). The BEE's Marcos Breton writes, "Substandard ownership has allowed a rabidly followed franchise to deteriorate into a distressed property." Breton notes he took his family "to see the Kings play on the evening of Easter" and he "didn't appreciate how distressed it is until we pulled up on Sunday and I got a good look at this mess in broad daylight." Breton: "Like distressed neighborhoods, basketball arenas fall into disrepair when the owners let it happen" (SACRAMENTO BEE, 4/11).
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