Kings Owner Jim Thomas has agreed to pledge $20M of the
Kings as collateral to ensure a loan would be paid without
tapping the city's general fund, according to Delsohn &
Bizjak of the SACRAMENTO BEE. The move, which sources say
has been approved by the NBA, was aimed, in part, at
"appeasing" City Council critics who challenged Thomas to
put up some of his own assets, other than Arco Arena, and to
"win support" of a divided City Council. Thomas' offer
means the city would own part of the team if Thomas defaults
on his requested $70M loan. Also, city and team officials
have "all but given up" hope of using tax-free bonds to
raise money. To use such bonds, the city would have to
assume ownership of Arco Arena (SACRAMENTO BEE, 2/3).
MUSIC CITY SUITORS: Independent auditors confirmed
that the Kings are in "dire financial shape" and that the
$70M loan would "make it viable," according to Bizjak &
Delsohn in the SACRAMENTO BEE. River City Bank President
Henry Boyer, who led the group of auditors: "We can assure
the mayor and City Council there is indeed a cash flow
problem and a very dire need" for the Kings to refinance
Arco Arena. It was also reported over the weekend that
Thomas has had conversations with a Nashville group led by
Craig Leipold about possibly moving the team to Nashville's
month-old $140M downtown arena. Chargers Owner Alex Spanos
also confirmed that Thomas turned down his offer a few
months ago to buy into the Kings and keep them in Sacramento
(SACRAMENTO BEE, 2/1). NBA Legal Counsel Joel Litvin was
interviewed in the BEE: "I know they do very well at the
gate. I also know they're in a small market competing with
teams in much bigger markets (SACRAMENTO BEE, 2/1).
