By Marcos Breton Wednesday, Apr. 18, 2012 It's all a smoke screen to cover up the fact that they can't make a deal because they don't have the money. That's why the Maloof brothers, owners of the Kings, are paying an economist, lawyers, media flacks and other hangers-on to trash Sacramento. They are saying Sacramento can't afford a downtown arena, when in truth the Maloofs can't afford it. They are saying a downtown arena wouldn't be good for Sacramento, when in truth it wouldn't be good for the Maloofs. And you know what? It wouldn't. These guys should have said that loudly months ago instead of participating in a charade bound to fail because they don't have the money. Why didn't they save us all the trouble? Why did they lock arms with Mayor Kevin Johnson on the floor of the former Arco Arena to celebrate arena victory? Why did Gavin Maloof cry with joy over the "framework" of a deal that never would have worked for the Maloofs? This is why KJ is killing the Maloofs in a media war and why they are getting crushed from coast to coast. The Maloofs would have had to take a $67 million loan from the NBA to make a Sacramento arena deal happen – money NBA Commissioner David Stern was ready to pay. The Kings already owe the city about that much and the franchise also is said to owe the NBA anywhere from $75 million to $100 million or more. Adding $67 million in Stern charity would have pushed the Kings debt to around $200 million. The Maloofs own only a bit more than 50 percent of the Kings. Forbes magazine values the team at around $300 million. You do the math: The Maloofs' share of the Kings is worth roughly $150 million and they would have had to take on $200 million to play ball with Sacramento. That's called being underwater, folks. Truly upright people would have come clean honorably a long time ago instead blowing it all up at the 11th hour and blaming Sacramento. Why did it take so long? Did Mama Maloof finally tell these guys to look at their finances and hire an antitrust lawyer to make sure KJ and Stern weren't conspiring to restrict their ability to run their team? A lawyer is always the last refuge for such people. It's no wonder the NBA treated the Maloofs like children too young to sit at the big boys' table for a year of arena negotiations that blew up last week. No wonder a heavy hitter like Tim Leiweke – top guy at AEG, the global arena operator – could barely conceal his contempt for the Maloofs when he came to Sacramento to say he wanted an arena deal. Ah, those Maloofs! They don't have much going for them except the American axiom of possession being nine-tenths of the law. They own the Kings and that's it. Read more here: http://www.sacbee.com/2012/04/18/4422141/marcos-breton-maloofs-couldnt.html#storylink=cpy
That's also why they refused to sell - they'd come out upside down. This is Stern's third chance to do the right thing when a dedicated NBA city is at an impasse with bad ownership (Charlotte, Seattle). I'd like to think that at least one time, he would pick the right side.
The Maloofs are idiots. They pretty much blew all their inheritance money. I don't feel bad for them one bit.
Do you have proof of this? Just curious. http://en.wikipedia.org/wiki/Maloof_family Technically, shouldn't the liabilities be around 50% as well? I don't think the writer accounts for this in the article.
I have not followed this at all, and don't care either way, but woudl point out: They don't have any money, but nonetheless are paying a whole horde of people for nothing more than damage control? I kind of get what he's saying, but this strikes me as poorly written. I'm not a mathematician, but I did sleep in a Holiday Inn last night. Team value = $300 million. Current debt = $67 million owed to city + $100 million owed to NBA = $167 million Net equity value = $133 million Maloof's current stake = 50% = $67 million If they took the additional loan from the NBA Team value = $300 million. Current debt = $67 million owed to city + $100 million owed to NBA + new $67 million owed to NBA = $234 million Net equity value = $66 million Maloof's current stake = 50% = $33 million That's not great, but it's not underwater. Perhaps the debt service was too much and the cash flow simply isn't there. Certainly there is probably (definitely?) more value to be had by moving to a bigger market.
