FanPost

The question no one asks and why we may be screwed!





Why are the Maloofs not selling? Honestly why? I think you don't have to look any further than the housing crisis to get your answer, and the answer is what really scares me. You see if you are underwater on your house but can afford to make the payments most people generally do so. The Maloofs with the Kings are in the same boat. Essentially they can't sell the team for any real money. The Kings themselves are essentially barely breaking even but they don't cost the Maloofs anything, so since they sold off all of their other assets and the Kings are the only major piece of the empire what can these guys fall back on? The 2% of the Palms? Back to the Kings though....If they wanted to sell all the debt they owe on the team would come due. So if the buyer said the Maloofs would be responsible for the debt, they would basically be walking away from the deal with what would be essentially even as they owe almost as much as the Kings are worth. If the Maloofs require the new owner to pay them the value of the franchise and assume the debt they are asking someone to pay double the value of the team. How many people are going to buy an asset for more than double what it's worth? Now imagine if they go through with this deal. The family will not tell anyone where they would get the money, but let's assume they sell some of the stock of Wells Fargo, leaving them with just under 100 million in stock to put 73 million into the new arena. They would basically be putting another 80 million into a business asset that is already almost 100% financed. In the end they would be leveraged way over their max. The people would expect them to spend money on a winning team, which would certainly put them in a loosing situation as they barely made money when the team was at the minimum for salary and they slashed their arena upkeep bills. All in all the point I'm making is these guys are clinging to this team as their last business, if it's sold they own nothing. Sure they have some money in stock, but they basically pissed away their father's fortune and basically lost all the real assets the family had as they sold the beer company and lost the Palms to mismanagement. As long as the Kings break even at least they have one asset left. What they may be dreaming about tonight is the harsh reality that if they turn down the arena deal and stay at Arco, they are as good as done anyhow as I think the business comunity will turn their back, the fans will boycott and they will go down in flames anyway as I don't think Stern will bail these guys out in the scenario. However if they do go through with the arena, the odds are just as likely they will be forced to sell before the arena opens because if the team starts loosing money like the majority of NBA teams these guys can't absorb the blows anymore. I think the Aneheim deal was about trying to raise the value of the franchise and make it viable for them to sell. The Kings in LA overnight become much more valuable. I think they still can't believe what happened to them and find everything that has gone down to be a horrible nightmare even though it's great for all of us keeping the Kings. No matter what happens now they are screwed unless Burkle really wants the team and for some insane reason says, "I'll take that team off your hands for double their value". Not likely. So now we wait to see which way the Maloofs want to crash and burn. Do they take the franchise and the city down with them? Tomorrow should be interesting. However seeing these guys make routinely bad decisions, I can't help to think they will make the wrong one unless Stern puts them in a headlock and goes WWE on them behind closed doors and forces them into making the right choice. And there lies the one wild card in all this... David Stern. Would the NBA take a hit to get rid of the Maloofs? If the NBA assumed the Maloofs debt in exchange for them to sell, how would that look? Hmmmmmmmm. What do you all think?

(This is a FanPost from a member of the Sactown Royalty community. The views expressed come from the member, and not Sactown Royalty staff.)

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