FanPost

Why Sacramento is still better than Seattle (as if it was ever a debate anywayz....)

What started out was a response to TZ's post became a full blown post on it's own. I apologize in advance. Also if you have not listened to the Cowbell Kingdom podcast from yesterday, please do. Also, since it's going to be mentioned anyway, I feel there are a variety of reasons I did not duplicate what Fireplug what wrote 2 weeks ago. Which, incidentally, was rather awesome too.

Some music for ya:

We've talked a lot about how the revenue issue's of each side have been broken down. What has not been discussed much is the reality of what actually raises the tides of the NBA. Since 1990, subsidy's have been a bit above 3 billion dollars.

Think about this for a moment. We are discussing the impact of a new arena and entertainment district in a city with multiple entertainment venue's and sporting options already. Versus a city that has dilapidated portions of key real estate. A city that is offering a major subsidy in exchange for dollars invested in the crown jewel of redevelopment and entertainment.

You think the NBA hasn't thought the value of core downtown Sacramento real estate in part being raised by a major subsidy to one of their franchises doesn't have value? You think owners do not know that? I beg to differ.

Does dropping a new arena in the middle of a live industrial zone like SODO make much sense? And worse, what happens if it comes out that BNSF and Union Pacific, two of the biggest corporate biggie's in SODO, who wield much more power and weight than the Port of Seattle, are actually behind the lawsuit's? (I don't know they are, but I'm noodling here. If they are, there is no way the NBA does not know it. If they aren't, the issue is moot.) My point, quite frankly, is that the rail lines in SODO have far more power than the port does. Even if BNSF and Union Pacific aren't against it, Hansen has to tread lightly around them.

Organized labor is for the new ESC in Sacramento. Why? They get San Francisco wage rates for projects like this while living in Sacramento. You think that, along with Ron Burkle's reputation of working effectively with labor both inside and outside of California, doesn't play a part even if Burkle's official status is no longer dealing with the arena or the Kings themselves?

Really? Are you fucking retarded, or just a delusional Seattle fan that hasn't added up all the pieces in this equation yet? I'm betting the latter.

Seattle isn't the only place with politicians, lawyers, zoning experts, engineers and rich people. Sacramento has those too. Sure, not the Steve Ballmer kind of rich person, but what evidence exists that it matters? What evidence exists, quite frankly, that Steve Ballmer's cash makes a shred of difference to the NBA at all? Worse, if we are talking about only having local ownership, how do the Seattle SuperSonics exist in the first place without Sam Schulman? I don't know, but I'm pretty sure LA ain't in Seattle. I'll probably have to look at my map again and get a ruling from the 206 on that one though.

If you asked around the NBA and asked which owner means more to the NBA, Jerry Buss or Paul Allen, you'll get one answer. It's not close. If you ask who means more to the NBA: Paul Allen or Peter Holt. You'll get Holt as the answer. Holt is not an uber rich guy like Allen. He's in a small market. Holt and his ownership group even loses 1/7 of his revenue to the Silna brothers. It's very likely they are so good that it doesn't matter. But why? They have a swanky arena that brings in buckoo bucks for the Spurs ownership group.

You think that doesn't matter? Aaron Bruski has repeatedly maintained this point, to his credit, that the NBA seeks out public subsidy's because of the substantial impact on the NBA's bottom line.

The real discussion is how this has raised franchise value's since 1990. It's one thing to point out just how many public subsidy dollars; what's not being pointed out that the Altanta Hawks, despite arguably being in the worst pro sports market in America (Miami is another I'd nominate), have gotten a small public subsidy relative to what the Falcons or Braves got. It's also true both Miami and Atlanta struggle in the same way: Football is king in the SouthEast. It always has been. Yet, when you think about it, that has not always been the case. Atlantians will sell out Hawks games if the product is right. The Heat sell out every game now because of LeBron James.

But here's the reality: Atlanta and Miami subsidized new arenas for both the Heat and Hawks. Atlanta, surprisingly, only hit 29% of the mark (I thought it was much higher) and Miami 100% subsidized the Heat's arena.

What happens to the NBA turning down a public contribution in a host city of a NBA franchise? What happens to other owners like Glen Taylor or the Simon family or a non Herb Kohl owner in Milwaukee? What happens in Cleveland when Dan Gilbert decides Clevelanders have to buy him another new arena despite QLA only being 20 years old now.

Public subsidy's are tough public conversations that fail everywhere, and are tough to turn down. Public subsidy's are tough to duplicate, and impossible to deny that they enhance your bottom line because they are not market speculative. They are guarantee's. Apparently Seattle missed that memo. It's politicians missed it in 2008. A few fans are missing it now.

Is a RSN in Chicago or New York or LA more valuable than a public subsidy in Sacramento? Of course it is dear readers. (Eat your heart out LA Confidential fans.) But Seattle isn't a top 3 media market where that kind of money and corporate support are year in year out guarantees.

David Stern has been involved with the NBA directly since 1966. In 1966, the Celtics were dynastically reviving their dominance post Bob Cousy, Oscar Robertson was proving that big G's were incredible for the NBA and the Chicago Bulls were a plucky upstart team. The ABA hadn't come into existence, the Seattle SuperSonics hadn't come into existence, and the Hawks were still residing in St Louis. Among other things. In 1966, my father was terrified of being drafted and dying in Vietnam despite only being a Junior in High School.

Things change, but fear is forever. David Stern has ruled with an iron fist, and rules with fear. Maybe Peter Holt favors Seattle on a few arguments, but does Peter Holt want to walk up to the city of San Antonio and Bexar County anytime soon to say: "Well, I told Sacramento to go fuck itself because it doesn't have a Space Needle, a maritime industry, eight thousand coffee shops or an online retailer adding more jobs, but oh by the way give me more money please?"

Umm, alrighty then. Go forth at your own detriment if you think Peter Holt is that stupid. Since 2002, the Spurs franchise value has risen oodles upon oodles because of AT&T Center according to Forbes. (And yes I hate Forbes, but what other numbers are we privy to right now? I'd love to see the NBA's internal numbers. Which is going to happen right about the same time a snowball fight breaks out with Satan's approval.) TV ratings are high today, but what happens when Tim Duncan and Manu Ginobili retire? Ratings will plummet there. You can bank on it. But what can the Spurs guarantee? Their arena is 86% subsidized.

One of the things that often gets overlooked is David Stern's intimate knowledge of being involved with the NBA for nearly 50 years of a very long publicly concetrated life. Public subsidy's are tough difficult things to acquire. Just ask the cities that have taken a long time to replace buildings. These buildings don't last forever, but public investment does. TV money jumps around, but guaranteed money is forever.

That's the problem. That's the elephant in the room. That's why Chris Hansen and the Maloof PR apparatus is releasing bullshit like 2004 land studies that have no ostensible purpose or value in today's proceedings. A report on a location that if you look at total value, the location that was untenable was worth so little it's worth 3 times less than under developed industrial land in a sort of a kitty corner tangential to other things in Seattle. THREE TIMES LESS. Do you think the NBA cares about that? That Hansen has spent more money to buy land in a city where land value is much higher because it's crammed in between two major bodies of water cut in half by it on top of that?

You must be out of your fucking mind if you believe that. (Which is a technical term in case you are wondering.)

Look, I know the RSN argument. I know the new SODO Flan argument. I know Seattle is high and mighty on itself in some respects. But what I have not seen is how Seattle's financial might makes the NBA more valuable. What I have not seen is how a RSN in a mid-major market trumps a public subsidy. A public subsidy is forever. A public subsidy is permanent. Is Seattle's arena plan a real subsidy, or just a public argument for one that in fact does not hold up? It all depends. That could be the real argument in Seattle's favor if I've seen one. That the RSN, if in fact it can be cobbled together, along with the soft subsidy makes it more valuable to the NBA's bottom line. Assuming you can make the balance sheet balance out in the black that is. But as others smarter than me have pointed out, it's tough to make things pencil out when you start something out with a ton of debt.

What does that do for markets that don't have that ability? Or for markets that are seeking as much subsidy money as possible? Or for markets with existing RSN's in which the interest is clearly defined?

The idea that Sacramento is a chronic revenue taker from the NBA is also a myth. It's a Maloof distortion of their terrible economic reality since the recession hit two of their key businesses since 2008: The Palms and the Kings. Yes, the recession has hit hard here. We've been hit and we're still here. We're responding to our problems. Seattle is throwing them in our face as if we have no response. They act as if a sister city's financial struggles means anything about Sacramento itself. Some are acting as if we are responsible for poor Maloof financial decisions in their other businesses than turn around and point the finger because we don't treat them as Kings for their efforts.

Plus, revenue sharing in the current form has only been around since......2011. How can anyone be a chronic revenue taker if we are talking only one year? And if you are talking about luxury taxes and escrow taxes, well, I don't know to what to say about that one. I guess that makes the Golden State Warriors, Chicago Bulls, Detroit Pistons and Washington Wizards chronic revenue takers since they've never paid luxury tax and escrow tax rebates go to all teams. Shit while we're at it, let's claim the Knicks, Lakers and Bulls are chronic revenue takers too!!!!

Stupid is as stupid do. And speaking of stupid, why aren't we talking about how Stockton's bankruptcy effects land value in the East Bay? Oh, because it doesn't matter? How nice.

We are being judged on our weakness, and not our strengths. Meanwhile, Seattle's strengths and none of their weaknesses are being trumpeted. You never judge someone by their weaknesses compared to someone else's strengths. There is nothing valuable to be gleamed from that comparison.

Here's another point that hasn't been mentioned: In 2005, the Knicks, Chicago and Lakers were more profitable than the Kings despite having worse teams in all 3 cases. (Again, Forbes, take it for what it's worth and with a grain of salt.)

How is that possible?

Answer: They are big markets and downturns effect their businesses and saturation, but not the overall value. When a Seattle team hits it's downturn, it's value plummets to the bottom of the league. Just like Sacramento's.

I thought Seattle had more corporate presence and less economic problems. But high quality teams, they make money for NBA owners in those markets. Seattle makes it's money when it's winning. When Seattle's not? Seattle's not. When Chicago loses money, that will be the first time. When LA loses money, that will be a first. And neither of those markets are New York.

Seattle is not a major top 5 market. It's not Detroit or even Cleveland as a mid major market. Detroit consistentliy makes money due to their arena despite being well outside of the core of downtown Detroit.

Look at Seattle in 2005 and Detroit in 2013. Detroit, despite being in a much worse economy in 2013, made more money off it's arena in 2013 than Seattle did in 2005. Now look at the league in 2005 as an overall and the league overall today. Hell, Sacramento made twice as much as Seattle did in 2005.

Arena's matter. Seattle is a day late and a dollar short. And unfortunately, that story isn't sexy enough because it doesn't enhance a politically unpopular point that public subsidy's are unfair mechanisms that privatize profit with public losses.

Seattle WANTS that story to be true. Seattle WISHES that story were true. But, that story is quite the opposite, and when push comes to shove, no 4 billion dollar gross business let's incompetent business people who have only damaged the league both financially and from an image standpoint make that judgment for them.

No business in it's right mind lets incompetent business people who sold an alcohol distributorship that included the exclusive rights to distribute Coors to the state of New Mexico to save a dying casino in a difficult down economy where the casino derived it's main income from locals.

Stupid people sell the distributorship. Stupid people pretend they are richer than they really are. Stupid people pretend that having Wells Fargo stock that is worth hundreds of millions now (and worth less in 2009) makes them NBA owners. Stupid people pretend they can destroy a collective's business. Stupid people make deals with bankrupt companies then try vainly to sue them for money they are most likely never to get in return.

The Maloofs are wealthy individuals. But they are not NBA owners because they do not help the NBA business, and in fact they hurt it by releasing private information the league wants to keep private, to let them do whatever the hell they want. The NBA as a whole > Maloof family. And that's true of probably every owner except maybe Jerry Buss in it's history. (I only say that because Buss's business model was so ahead of it's time it literally created the concept David Stern ultimately piggy-backed off and made a hallmark of the NBA.)

Do I think the NBA could walk away from Sacramento? Of course it could. The NBA could decide that the revenues in Sacramento are off the charts ridiculous and don't make any real sense in accordance with reality.

Let me ask this. The NBA has had a chance to keep the Sonics in Seattle over Oklahoma City and move the Hornets from New Orleans to Seattle instead after the OKC move. Why didn't they? How important and valuable is a subsidy in the New Orleans market as opposed to almost all private investor risk in Seattle?

One has to ask themselves why OKC and New Orleans are favored over Seattle. There's only one answer: Public Subsidy's.

Unless NBA owners have grown in the habit of turning down public subsidy's and the anger that comes with them despite the guaranteed comfort that comes from bolstering the bottom line with guaranteed dollars, they are in a tough decision because Seattle clearly brings something to the table.

If the NBA chooses Seattle over Sacramento, it's saying that revenue streams potentially more lucrative, and potentially less lucrative, than a public subsidy is it's choice. Is that a precedent the NBA is really willing to set?

The owners don't pay David Stern and the Front Office to sit on it's hands and guess on these issue's. But the owners do care about public subsidy's and the energy it takes to get them. They do care about the money it guarantees them on a day in day out basis.

If you are the NBA, you have to ask yourself: Is this about the value of Sacramento vs Seattle vs a 31st team? Or is this about Seattle vs a 31st team. Because, just as recently a week ago, I thought it was the other way. But I did underestimate the value in knowing something vs strongly believing it's possible. Speculation is one thing, knowledge is quite another. Subsidy's are guaranteed, but RSN's in non top 6-8 US markets are not. Under any scenario. They dip and rise and all manner of things that have entirely to do with the fact that we are discussing marketplaces. Marketplaces rise and they fall. It's nature of the beast.

Sacramento is a bird in the hand compared to Seattle's two hands in the bush, and that has become ever clearer as Hansen has become more desperate. Worse, Hansen has to change the narrative to make it look like Sacramento is far more damaged than we actually are. (And something the NBA has it's own opinion on.) After all, it's the Stockton bone that connects to the Lodi bone that connects to the Elk Grove bone that connects to the Meadowview bone that connects to the DT Sac bone. See? That's how Stockton's bankruptcy effects Sacramento. Simple logic really.

Sacramento isn't talking about Seattle's internal issue's because they aren't our problems. We have too many issue's here to worry about anyone else's. Far be it for me to point out that there are Stockton native sons who know the issue on a far deeper and impactful level than I do. Hell, these guys know what's up and when it really counts you do this: Taunt Peaches. And when in doubt, you don't want to talk about actual issue's that effect Kings fans (while using them as one argument against) but ignore that for many Kings fans there is a separation of Maloof and State.

It's easy to claim that RSN's are worth more than subsidy's. What's rarely factored in is how many other mid markets gain more from subsidy's than RSN's. Any mid market that is profitable tends to be because of their stadium revenue. Just because TV revenue can be greater doesn't necessarily make it so.

I could keep going. But I think anyone that thinks Seattle's Fortune 500 company advantage, or Sacramento's proximity to the Bay Area is a true disadvantage for Sacramento doesn't understand the difference a DT arena would make for Sacramento in particular.

We are not talking about the value of RSN's in Boston, NY, LA or Miami here. Seattle is a significantly smaller market than all of those.

One of the undercurrents of this deal from the Sacramento equation is that the power of fear has taken over. And it's not taken Kings fans who are the least important part of this equation. It's taken young people, Midtown and Downtown Homeowners, and business people across the city who aren't Kings fans.

Seattle isn't reinventing the wheel here. Is Sacramento? I don't know. But in a city significantly smaller than Brooklyn let alone New York, the amount of progress you can build around an arena is important. This isn't about the arena. Frankly, if it the arena wasn't just so time sensitive, I can think of numerous issue's more important than an arena. But solving the arena might solve the most important issue Sacramento is facing: The long term fungible economy that it's citizens depend on to live.

How? The spin-off effect. The construction alone will make a dent in unemployment rates. The amount of retail, shopping, and the effect of hotels and businesses that will take up new never before seen office space will be different. As John Shirey repeatedly said during the Town Hall meetings, it isn't just about visitors but getting people to live and spend money where they live. Tourists are a quick cheap easy buck. Residents are forever.

While the NBA does not care about any of this, the impact of the subsidy argument on the bottom line is without a doubt an economic one. If you can use an emotional argument to justify the economic argument, so much the better.

The NBA may leave Sacramento for Seattle. But if the economics are built around shaky and ultimately difficult economics that simply do not necessarily pan out in the worst case scenario, the NBA not only has a failed relocation AND a strong argument for the fact that public subsidy's really do matter. (In otherwords, every Aaron Bruski column on the topic.) We are not talking about a move from Sacramento to a Chicago suburb to rival the Bulls. (Assuming Milwaukee doesn't realistically serve as that already.) Or to Queens to showcase their talents to the Big Apple that isn't already Nets or Knicks fans. Even then, does being in a market place make you valuable? The Nets and Clippers have been in NY & LA for many years now. Until recently, both were in the bottom 10 in terms of valuations by Forbes. (It's the only data I got. I'd love others trust me.)

We are talking about a move to a city that saw it's franchise plummet to bottom 5 NBA values after Gary Payton was traded. We are talking about a city that had a NBA team for 40 years, built 3 new public facilities for the Seahawks and Mariners in the same period, and despite that the Sonics got an arena built for the Worlds Fair in 1962, an opportunity to artificially inflate attendance in the Kingdome, and ultimately back to the Seattle Memorial Coliseum with a brief stop in the Tacoma Dome before returning to the renovated Key Arena.

Seattle never figured it out. As Vivek Ranadive said, they are arguing for a mulligan. What does Sacramento get to argue for fleshing out an arena plan that is arguably the first of it's kind in a market this size in record time? What does Sacramento get for having supported the NBA faithfully for a very long time? What does Sacramento get for willingly work with NBA leadership?

The truth is, Seattle fans can claim that Sacramento needs emotional arguments to make our case. But the truth is, Sacramento fans aren't obsessing over Seattle lawsuits in court. Sacramento fans aren't talking about the arena plans by and large unless they know something. (Like myself.) We aren't talking about the Seattle City Council or King County Board being under the thumbs of Mike McGinn and Dow Constantine. We aren't worried about the timeline of a public discussion that's been going on for a decade. We want this saga over, not more discussion. Apparently that distinction has been lost on some in Seattle.

Both sides have something to bring to the table. But both sides are not the same market, and both sides are not offering the same thing. Both markets might be valuable, but the NBA hasn't left Sacramento, yet. Anyone arguing this is the time is clearly not paying attention to how the NBA operates.

We have willing leadership and citizenry trying to keep the Sacramento Kings in Sacramento. Seattle did not unfortunately for Sonics fans. And that's not our fault. We didn't create that situation in Seattle, your leadership and wealthier citizens did.

Hold Steve Ballmer accountable for not buying the Sonics in 2006 when there was an opportunity. Blame Frank Chopp for telling David Stern to go fuck himself with player salaries (not quite in those words). Blame the fact that the city agreed to a renovation that ended up being the unraveling of the whole Seattle SuperSonics in the first place.

Just do not blame Sacramento for your mistakes. We didn't create this problem. Ultimately, neither did the NBA despite it's cartel'ish way of doing business. We're willing to do business with that cartel. You weren't. Own up to it. And find another way.

You don't like that? Go fuck yourself. Because that's all your getting from us. We have figured out something some up there still grapple with: It's about priority. You built new venue's for your MLB & NFL teams, but not for your NBA team. And you think that David Stern and other owners have not taken stock of that fact? At the end of the day, keeping the Seahawks and Mariners was a priority. Not so in the case of the Sonics. From the NBA's point of view mind you, not my POV. I think then, as now, it was a shitty way to do business. But it is the way the NBA does business, and evidenced by numerous attention made by just a few places on the web and elsewhere, it's clear that some in Seattle really want the NBA back.

You fucked up. The onus is on you is to defend your actions and explain why you are worthy of being back in the club, we never left. Own it Seattle and stop your bitching already. We have 12% unemployment. We're not kissing your ass because you won't get your way this time. It's not your worry to solve. It's ours. We think a building the caliber of a swanky new ESC is part of the solution that will help us move forward and hopefully diversify our economy quite a bit in the process. Sorry your ego is butthurt.

As the infamous Edward G Robinson (and by infamous I mean infamous on StR) said so succinctly in a movie in yesteryear:

EGR: Gets down to what it's all about doesn't it. Making the wrong move at the right time.

Steve McQueen: Is that what it's all about?

EGR: Like life I guess. You're good kid. But as long as I'm around you'll always be second best. You might as well learn to live with it.

Guess what Seattle? You weren't better than Oklahoma City in 2008 and you aren't better than Sacramento in 2013. Sucks to be you don't it? Don't worry though. You'll still have your waterfront, the Space Needle and Pikes Place. This should comfort you when it's 35 degrees and drizzly all day with a forecast of gray skies for the rest of the winter season. (Pretty stupid argument isn't it?)

I don't mind that Sacramento isn't perfect or has a sister city that is bankruptcy. I don't mind that we're in the shadow of the Bay Area because I'm used to it. I don't mind being looked at as a cowtown that I've never seen cows roam around in. (Or hardly anywhere in Sac County for that matter. Kinda hard to graze on concrete.)

We have our share of problems. We have our foibles, idiots and derelicts. The difference is that WE ARE better than YOU because we are content to solve our problems and let others solve theirs in their own due course time and place. Perhaps you can take note since some of your citizenry struggles with the concept.

We are part of the club you wish to be a part of again. We don't have to justify ourselves. We've proven ourselves. We have not opted out of the club. We are willing to be here and make the sacrifices it requires You might want to remember that in the future. Just a friendly suggestion.

Signed Sacramento

P.S. Welcome to life in the world of Maloofery. Sucks doesn't it?

(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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