FanPost

The Long and Winding Post (Or My Best Guess at What really Happened with the ESC Deal)

With the rather abrupt collapse of the arena deal in our rearview mirror, I felt now was a good time to sift through the ashes and analyze what really happened, and what it means to the future of the Kings in the Sacramento. Most importantly, I want to say I don’t necessarily think all of the events of the past few weeks were a bad thing. There is a lot of doom and gloom around here, but unlike many of the national pundits who seem to think that it’s now a foregone conclusion that we’ve lost the Kings, I believe there were several positives to emerge from last the week’s events.

First, and foremost, I think the league is solidly in Sacramento’s corner, and that is a very good thing. No one can come out and say as much because of the obvious threat of an antitrust lawsuit, but I don’t think there is any doubt the Maloofs have officially bitten the hand that feeds. Secondly, I think the Maloofs badly misplayed their cards in the entire arena negotiation. Instead of being honest about their concerns with the ESC deal behind closed doors, George (the hawk in a family of Dodos) decided it was time to take on Stern and the league. To me, it looks like the Maloofs went rogue, bringing in an anti-trust lawyer to the BoG meeting (which was clearly George rattling his saber), going off the reservation and presenting a disjointed, rambling presentation to the media without NBA consent, and turning your back on a deal that the NBA was obviously bending over backwards to make work (to the tune of 73 million in upfront dollars) is not a great play. This type of behavior has got to be insulting to the commissioner and the league, and these are the very same people the Maloofs will need to convince to vote in their favor if they choose to file for relocation.

So how do we know the league is behind us? I would point to Stern’s very measured words at his press conference. First, he joked about the odd nature of the Maloofs’ press conference, which was a subtle form of character assassination (but really he didn’t need to do much here as the boys did all the work for him). More importantly, he leaked that the league, and not the Maloofs, were going to pay for the entire amount of the Maloofs’ portion of the deal, a fact that the Maloofs certainly didn’t want to make public when they were asked about how they planned to pay for their part of the deal previously. Up to this point, no had let the cat out of the bag as to where the 73 million was coming from. Stern didn’t have to do that, but he did, and like everything that he does, it was calculated. Clearly, he wanted the national media to know the terms of the deal the Maloofs backed away from. In essence, the commish was saying that we offered to pick up the bill, and they still didn’t want the deal. In doing so, Stern let everyone know the Maloofs were bringing absolutely nothing to the table, which, of course, makes them look incredibly bad, confirming to the national media what we already knew: these owners are broke, greedy and stupid. He also went on to state that Sacramento did everything the league had asked of them, which absolved us from any of the blame for the breakdown in the negotiations in the League’s eyes. Lastly, his comments about the antitrust lawyer the Maloofs brought to the BoG meeting were telling. He let them know it wasn’t appreciated, and the crack about his own friends being antitrust lawyers showed he wasn’t scared of this thinly-veiled threat directed toward the league. So, my read on this situation is the league has completely reversed course from where we were a year ago, and they are solidly behind KJ and Sacramento instead of being behind their fellow owners, the Maloofs (the fact that the Maloofs got a court order for all correspondence between the city and the league seems to lend further credibility to this assertion).

So how did this happen? Simple, KJ was able to call their bluff. The big question that nobody seems to be asking is the following: Why did the Maloofs back out of the deal for the brand new arena they have always wanted? For ten years, they have pined for an arena that would make them competitive, yet when they are finally on the cusp of getting this very arena, they act erratically, sabotaging the process at every turn (Voodoo economics and Indian artifacts!). My own theory is the arena has always been a red herrring. I am guessing that right about the time the Maloofs finances started heading south, they started plotting to move the team in that direction. The problem is moving a team can be a bit messy, so in order to justify trampling the hearts of a devoted fanbase, you need something you can hang your hat on and point to as a solid reason for making the move. The need for a new arena has always served this purpose.

What the Maloofs didn’t count on was KJ. He rallied the Sacramento public, and, even more impressively, he unified the powerful (but divisive) political community. He was able to use some of his political capital to get the arena project off the ground, and most importantly, he was able get a respected businessman to offer to buy the Kings and keep them in Sacramento (which, in essence, debunked the Maloof’s claim that Sacramento isn’t a viable market). Also, he was able gather a huge number of corporate sponsors in a relatively short period of time, which again ran counter the Maloof’s claim that they just didn’t have the support from the community to make ends meet. And lastly, he was polished, prepared and profession, in stark contrast to the Maloofs, when the Board of Governors’ sat down to make a decision on the relocation.

I don’t think the Maloofs ever dreamed things would get this far, but KJ made it happen, and when he did, they really didn’t have much of a plan B. Gavin cried crocodile tears of joy. The boys held hands with the Mayor at center court, but really they were trapped. The arena they never thought possible was suddenly very possible. Furthermore, George realized that the amount they would owe the league for the upfront portion of the deal (and the extended league credit line) was as much or more than their ownership stake was worth, and they would be in danger of losing the team if they ever couldn’t make a payment. Thus, the arena situation was setting up to be very similar to the asskicking George received from the Palms creditors when they couldn’t make their payments, forcing him to sell his beloved casino at a discount. When this dawned on him, I think George decided he never wanted to be put in that position again, so he objected to anything and everything, and made an absolute mess of the situation. In doing so, the Maloofs killed the arena and severely set back the city of Sacramento in terms of developing the downtown railyards, but they also lost whatever credibility they had with the league and the public. When they backed out of a handshake deal the world saw them make, they really were exposed as being broke and greedy, in essence, looking for an even bigger hand out.

So where do we go from here? I think the Maloofs are still holding out hope they can either A) sell the team down the road at a much higher price or B) get someone to offer them a sweetheart deal to relocate (which would enable them to pay down debt and still keep the team). I know they would prefer option B, but the NBA is not letting them move for cheap (destroying a good market in the process), just because they are broke, so they are stuck. I think Anaheim was their best bet to keep the team and get a sweetheart deal, but I doubt that’s even on the table anymore after the antics they pulled in Manhattan. Furthermore, I can’t imagine the Maloof’s have the resources to fund a long antitrust legal battle to try to move the team to Orange County, so for the time being we are stuck with the Maloofs and they are stuck with Sacramento.

(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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