6 Carl’s Jrs. Maybe just 5 really. That’s a rough estimate, but probably a pretty good one. Would you sell your stake as owner of a professional basketball team for 6 Carl’s Jrs? I know I wouldn’t, and neither will the Maloofs.
Okay, I’m exaggerating a little - it’s actually 6 Carl’s Jrs each, so we are talking about 36 restaurants if we assume Mamma Maloof is still getting her cut.
Confused? Here’s the logic.
The Sacramento Kings are valued at $300M by Forbes but likely could be sold for $350M to Burkle for example it’s been said. Great news for the Maloofs until we look at the numbers a bit closer.
First thing we must account for is that the Maloofs are not the sole owners of the Kings, they split ownership with a handful of other owners, primarily Sac‘s old money. So while the franchise could go for $350M, the Maloofs are not really getting that full share in the sale. Rather they would be selling their portion of the franchise - to make this simple I’ll say that’s 60%. A sale based on the price of $350M would be $210M to the Maloofs.
$210M is a lot of coin, a great place to start your new life but unfortunately that’s not what the Maloofs net from the deal, you see they have those pesky loans. Once again, I’ll do some rounding off here for simplicity. We all know about the city loan that the team is on the hook for, it is assumed this is a Maloof loan and not against the overall franchise. If we take that off the top (210-75), we’ve now dropped the Maloof parting gift to $135M. Ouch, that’s starting to hurt but still a good chunk of change.
If it stopped there the Maloofs might still consider an exit strategy, but it doesn’t, it gets worse. KFBK reported that the Maloofs took out an additional line of credit with the NBA for $75M. Now it’s possible they didn’t actually borrow that full amount but for the sake of this calculation let’s assume they did. We update our figures (135-75) and that leaves us with a whopping $60M. Money I’d love to have, but compared to the $210M we started with it’s a drop in the bucket. $60M is just 29% of what they would be selling their portion for.
An individual could do a lot with $60M but we have to factor in we are not dealing with an individual. The Maloofs are a family and fail at business together. That $60M doesn’t go in one person’s pocket, it goes in 6 pockets (assuming Mamma Maloof is still on the take). You can do the math here: Colleen $10M, Adrienne $10M, George $10M, Joe $10M, Gavin $10M, Phil $10M (who are we kidding - George $15M, Phil $5M).
$10M a Maloof. Half of what Chuck Hayes will make over the next 4 years - although they will end up with the same number of blocked shots over that period (cheap shot, I know). I wouldn’t do it. I really can’t blame them for not selling. I don’t have $10M in my bank account as I type this and I can honestly say I wouldn’t do it. Why would you? What are you going to do with $10M when you are used to living the lifestyle the Maloofs have led? Their houses are worth more than that.
A Carl’s Jr franchise is estimated to cost $1.3M-$1.9M to start up. Is Joe going to go from being known as the owner of the Sacramento Kings to owning 5 or 6 Carl’s Jrs? No way. As he’s said, the Kings are what they are known for. They aren’t going to trade that publicity in to be small business owners or to do some larger investment they can’t really afford.
The numbers may not be perfect but you get the point. They could walk away with more, they could walk away with less; but I think the sad reality is it’s simply not enough money per Maloof to walk away at all.