Wednesday, March 21, 2012
King's crossing: agendas help Sacramento keep team
By J.A. Adande
Sometimes there’s a benefit to fitting into the grander scheme, and there just may be enough agendas in play that the byproduct will be keeping the Kings in Sacramento.
David Stern wants to halt franchise movement so that it doesn’t join the lockout as the lingering memories of his final years as NBA commissioner. And sports and entertainment industry giant AEG wants to protect its local turf while adding new arenas to its concert promotion business while staying on the good side of the California state politicians it needs to get a football stadium built in Los Angeles.
AEG has pledged almost $59 million toward arena construction and would operate the facility. What’s in it for them? In addition to a percentage of the annual revenues, keeping the Kings in Sacramento means they would stay out of Anaheim and the AEG-owned Staples Center would remain the only home for NBA basketball in Southern California.
A new Sacramento arena would also bring another venue to AEG’s concert portfolio, and give them arenas in every major region on the West Coast: Seattle, Portland, Northern California, Los Angeles and San Diego. That would allow AEG to “route” large tours through the region, and make AEG “the largest arena operator and concert promoter on pacific rim,” according to President and CEO Tim Leiweke.
Then there is the side benefit of pleasing the locals in the state capital. AEG already won passage of a critical bill last year that limits the company’s susceptibility to lawsuits in its efforts to build a new football stadium in Los Angeles and streamlines the environmental review process. Still, it doesn’t hurt to stay on the good side of the state politicians by keeping the Kings around (with Seattle and Kansas City looming as other potential destinations for them).
“This goes a long way with politicians,” Leiweke said. “They like a company that’s from California making sure teams and jobs stay in California.”
Even though AEG owns or operates more than 100 venues around the world, “This is our home state,” Leiweke said.
It could add to its California footprint if it’s successful in its bid to operate the Oracle arena in Oakland that houses the Golden State Warriors and the adjacent stadium that’s home to the NFL’s Raiders and baseball’s Athletics.
There is much left to be done in Sacramento. AEG is working on a naming rights deal for the new arena. The city, meanwhile, has pledged $265 million in funding, with a large share of the money coming from leasing parking garages under a plan championed by Mayor Kevin Johnson. But they need to demonstrate the parking revenues will meet the estimates. Environmental studies need to be finished. There’s still the matter of a $70 million city bonds-backed loan to the Kings that the Maloofs inherited when they bought the team. And what would become of the current arena and its grounds north of the city, of which 85 acres are owned by the Kings and 100 acres by the city?
The story won't be over until the shovels hit the dirt.
“We’ve signed a non-binding term sheet; the whole deal has to be negotiated,” Kings co-owner Gavin Maloof said. “There’s a lot of heavy lifting still to be done.”
One advantage the Kings have that wasn’t present while the SuperSonics were exploring options to get a new arena in Seattle is the full support of Stern. Stern checked out of the Seattle situation after he was all but shown the door by Washington state legislators. California has been much more receptive, thus Stern has been more active.
“David’s been terrific,” Maloof said. “He’s always come to our assistance, any time we needed help in any area. We appreciate his work.
“Everybody’s trying hard. At the end of the day we hope we can find a solution and get a new arena built. There’s still a lot of work to be done.”
Stern has his legacy to consider. He doesn’t want a series of shifting franchises to mar a departure he keeps saying will be sooner than later. It’s too late for Seattle. The NBA took the extraordinary step of buying the Hornets – leading to awkward moments such as the vetoed Chris Paul trade to the Lakers – in order to keep them in New Orleans. Now he’s trying to save Sacramento so there are, as Leiweke put it, “No leaks in the dam that he’s trying to plug up.”
“After moving a team from Seattle, David found a will and a drive where he didn’t want to go through it again with Sacramento,” Leiweke said.
There’s a little bit of sentiment involved for Leiweke as well.
He remembers going with the Lakers to Arco Arena for playoff games in those memorable meetings that started the last decade, when the noise reached eardrum-shattering decibels.
“I always thought it was the best environment in the NBA,” Leiweke said. “I remember going up there when it was good and the Lakers having to compete in that environment. As much as we hated it, we admired the hell out of that environment and the way they supported the city.”
The goal is to bring that roar back in a new arena…an arena that AEG can profit from.