Best strategy for getting the Maloof family to sell?

jcassio

jcassio

Starter
#1
#1
I'm tired of the Maloofs as the King's owners. They're an embarrassment to Sacramento. They can't be trusted. So what's the best strategy for getting the Maloof family to sell?
Boycotting the Kings may be the surest way to relocation. But supporting the Kings puts dollars in the Maloof's pockets, which may encourage them to keep milking the cow - as long as it produces for them. I want new owners who can see far beyond the old milk cow and I want strategies for achieving that goal!!!
 
Capt. Factorial

Capt. Factorial

trifolium contra tempestatem subrigere certum est
Staff member
#2
#2
Honestly, the most effective strategy to get the Maloofs to sell right now would probably be to lobby Congress to give the NBA an anti-trust exemption.

I don't believe they have any intention of selling when they can simply threaten a lawsuit against the NBA and try to get their way.
 
J

JB_kings

Starter
#3
#3
The most direct and effective way is the good old fashioned way... make them an offer they can't refuse. Not in the Godfather sense, I mean in the Jerry McGuire sense. Show them the money. Make an offer on the team that they can't ignore. We have to get past wishing they would be forced into selling. It doesn't appear to be in the cards. I think waiting them out is a bad idea as well. Stern himself is going to press for the highest price he can get. No hometown discounts are going to be offered. So if it's Burkle or some other group, the starting offer better begin where the Hornets price left off.
 
ParniValjak

ParniValjak

All-Star
#4
#4
JB_kings said:
The most direct and effective way is the good old fashioned way... make them an offer they can't refuse. Not in the Godfather sense, I mean in the Jerry McGuire sense. Show them the money. Make an offer on the team that they can't ignore. We have to get past wishing they would be forced into selling. It doesn't appear to be in the cards. I think waiting them out is a bad idea as well. Stern himself is going to press for the highest price he can get. No hometown discounts are going to be offered. So if it's Burkle or some other group, the starting offer better begin where the Hornets price left off.
Click to expand...
Good luck with that considering that their ownership is around 52% and there is ~ $170 million in debt. So in other words, you would want the owner to offer Maloofs around $200 million for their share and take on the ~$170 million in debt AND take on the $74 million in arena construction costs. Before you know it, that's around $450 million which is a heck of a lot of money for 52% of the team and that's even assuming Maloofs would want to sell their share for $200 million.
 
Glenn

Glenn

Hall of Famer
#5
#5
I don't think anything needs to be done. As soon as the Maloofs saw the concrete details of the "terms" and the reality it meant to them, I suspect they finally were hit smack in the face that they don't have enough money to run an NBA team. I'm going to sit back and wait. They know what needs to be done. Let's not distract them. The family is not all George and perhaps calmer heads will eventually prevail.

Maloof money or the lack thereof is what we are talking about and that's it. The rest is smoke and mirrors. The Maloofs don't have enough money to field a competitive team, to move, to file a law suit, or just about anything and I think George's behavior is as much likely to be a reflection of panic than drug use. How many people here cover fear with anger? Most all of us have at one time or another.

In the mean time support the City Council as it looks for other tenants for the new arena. A new tenant or two or three will take away just about every bit of leverage the Maloofs have over us all. There are many small time sports that could fill some of the dates although none that can come up with the $73 mil which is the sticking point now. The City has fulfilled it's duty. The pressure is now elsewhere.
 
L

LWP777

Guest
#6
#6
Just out of curiosity, does anybody know how much they purchased the Kings for? I would assume that they would have to pay capital gains tax on any gain they have made on the team? That may be another reason they are hesitant to sell.
 
Spike

Spike

Subsidiary Intermediary
Staff member
#7
#7
Glenn's right.

My gut tells me though we can starve them out, though, symbolically. They'll see the fans pack the games, but wonder why they're not generating revenue from parking/concessions, and it'll start to wear on them. It'll get ugly, but I think Sacramento can win this one. Everyone has to be united, though.
 
Kingster

Kingster

Hall of Famer
#8
#8
I'm curious where we are in about three weeks or so. After all this incredible trauma, it's going to take a while for reality to settle in for the Maloofs. They obviously are not dealing with reality now ("renovate" the Arena my a**). Let's see what happens after the children have taken a long nap after their mega-tantrum.
 
macadocious

macadocious

Starter
#9
#9
Čarolija said:
Good luck with that considering that their ownership is around 52% and there is ~ $170 million in debt. So in other words, you would want the owner to offer Maloofs around $200 million for their share and take on the ~$170 million in debt AND take on the $74 million in arena construction costs. Before you know it, that's around $450 million which is a heck of a lot of money for 52% of the team and that's even assuming Maloofs would want to sell their share for $200 million.
Click to expand...
Well that debt is not the Maloofs debt, it's the teams debt. So there burden would be 52% of the debt.so it would be more like 200 Million - 90 Million. Netting 110 Million (using these numbers).
 
J

JB_kings

Starter
#10
#10
You still might have to overpay them some amount. Because they can just sit on the team as they claim they will do. Then suppose we get lucky and win the lottery next month and the agent for Anthony Davis makes demands the Kings trade the pick because of their unstable situation here? Sure you can ignore that and make him play here anyway. But the point is that these guys are going to poison everything with the franchise until they are gone.
 
T

The Hammer

All-Star
#14
#14
Hoovtrain said:
Lovely,NBA is entertaining the idea of corporate sponsorships on jerseys.
Click to expand...
They are halfway there with the addidas logo on all the warmups now. You could have guessed as much after Stern said they had looked at the model of soccer leagues as far as jerseys go. Honestly there's a lot of money to be made with that, a lot "left on the table".
 
pdxKingsFan

pdxKingsFan

So Ordinary That It's Truly Quite Extraordinary
Staff member
#15
#15
Because soccer teams don't place a huge emphasis on team nicknames on their kits it seems to work better than in an American league where the team nickname is the brand and is heavily incorporated into the jersey. It would seem really odd in the NBA to have corporate jersey sponsors where in MLS the few teams that don't have kit sponsors look naked (or downright stupid).
 
J

JB_kings

Starter
#16
#16
Getting back on track. Getting rid of the Maloofs is going to take more that just wishing they would sell. It's going to have to put money in their pockets to make them go away. I think the city is going to have to be creative. Some of the debt is controlled by the city. If the city could work the Kings loan into a transaction so that the Arco property went over to the city in exchange for the wiping the loan free, in exchange the Kings would sell to a local ownership group free of the 77 million debt. Once the city owned Arco and the debt was off the books for the new Kings owners. Then the city would have to figure out how to refinance that loan and get it away from the general fund as it is exposed today. Could using the parking as a city concession instead of monetization hold a solution there for both? Remember that taking the old arena land has been part of the plan all along. If they got 30 million for the sale of that land, then the refinance debt would only be about 40 million or so.
 
Section 101

Section 101

All-Star
#17
#17
JB_kings said:
Getting back on track. Getting rid of the Maloofs is going to take more that just wishing they would sell. It's going to have to put money in their pockets to make them go away. I think the city is going to have to be creative. Some of the debt is controlled by the city. If the city could work the Kings loan into a transaction so that the Arco property went over to the city in exchange for the wiping the loan free, in exchange the Kings would sell to a local ownership group free of the 77 million debt. Once the city owned Arco and the debt was off the books for the new Kings owners. Then the city would have to figure out how to refinance that loan and get it away from the general fund as it is exposed today. Could using the parking as a city concession instead of monetization hold a solution there for both? Remember that taking the old arena land has been part of the plan all along. If they got 30 million for the sale of that land, then the refinance debt would only be about 40 million or so.
Click to expand...
Not going to happen. That was a point I made about taking over the current arco land. The maloofs would have to be willing to sell it in a bad market.
 
J

JB_kings

Starter
#18
#18
Section 101 said:
Not going to happen. That was a point I made about taking over the current arco land. The maloofs would have to be willing to sell it in a bad market.
Click to expand...
They don't have to sell it. The city technically owns the Arco property now and the Kings are paying the loan back. Once paid off, the ownership then goes back to the Kings. But the sticky part is that they have only paid interest up to this point and the balloon payments are kicking in a few years. Given what we know about the Maloofs, they are probably ok with walking out on this loan and letting the property default back to the city. Sorry, but there will be no loan payback if they leave. There is the sticking point of the 25 million in team ownership due to the city which also causes the team some problems.

So the city has a vested interest in seeing this gets addressed before it ever comes to a default situation. In fact they would best serve the public interest to protect the general fund and cut a deal. So if they have to go this route, why not refinance the loan using the parking concession idea and terminate the 25 million in ownership claim in exchange, the Maloofs would have to sell the team to a local ownership group. Free of 77 million in debt obligation to the city now and free of the 25 million in possible city ownership. Their only debt would be the NBA line of credit. And that is out of the cities hand.

Sure it's a win for the Maloofs and they get a much bigger check in the sale of the team. But I think it's in the cities best interest to take care of this no matter what.
 
bajaden

bajaden

Hall of Famer
#19
#19
JB_kings said:
They don't have to sell it. The city technically owns the Arco property now and the Kings are paying the loan back. Once paid off, the ownership then goes back to the Kings. But the sticky part is that they have only paid interest up to this point and the balloon payments are kicking in a few years. Given what we know about the Maloofs, they are probably ok with walking out on this loan and letting the property default back to the city. Sorry, but there will be no loan payback if they leave. There is the sticking point of the 25 million in team ownership due to the city which also causes the team some problems.

So the city has a vested interest in seeing this gets addressed before it ever comes to a default situation. In fact they would best serve the public interest to protect the general fund and cut a deal. So if they have to go this route, why not refinance the loan using the parking concession idea and terminate the 25 million in ownership claim in exchange, the Maloofs would have to sell the team to a local ownership group. Free of 77 million in debt obligation to the city now and free of the 25 million in possible city ownership. Their only debt would be the NBA line of credit. And that is out of the cities hand.

Sure it's a win for the Maloofs and they get a much bigger check in the sale of the team. But I think it's in the cities best interest to take care of this no matter what.
Click to expand...
I don't think the money owed to the league is just a passing car. At least if your trying to get another player to invest his or her money in buying the team. Problem is, we don't know what that debt is. Its rumored to be as much as 100 million dollars, and if so, thats as big a stumbling block as the money owed the city. Someone like Burkle would have to want a team badly to assume all that debt on top of whatever he had to pay for 52% of the team. Not saying it couldn't happen, but I wouldn't hold my breath.
 
Section 101

Section 101

All-Star
#20
#20
JB_kings said:
They don't have to sell it. The city technically owns the Arco property now and the Kings are paying the loan back. Once paid off, the ownership then goes back to the Kings. But the sticky part is that they have only paid interest up to this point and the balloon payments are kicking in a few years. Given what we know about the Maloofs, they are probably ok with walking out on this loan and letting the property default back to the city. Sorry, but there will be no loan payback if they leave. There is the sticking point of the 25 million in team ownership due to the city which also causes the team some problems.

So the city has a vested interest in seeing this gets addressed before it ever comes to a default situation. In fact they would best serve the public interest to protect the general fund and cut a deal. So if they have to go this route, why not refinance the loan using the parking concession idea and terminate the 25 million in ownership claim in exchange, the Maloofs would have to sell the team to a local ownership group. Free of 77 million in debt obligation to the city now and free of the 25 million in possible city ownership. Their only debt would be the NBA line of credit. And that is out of the cities hand.

Sure it's a win for the Maloofs and they get a much bigger check in the sale of the team. But I think it's in the cities best interest to take care of this no matter what.
Click to expand...
There is no balloon payment. They are in year 15 of a 30 year bond.

Here is the principal amount owed from the bond document.

Date Amount
07119/00 $ 125,000
07118/01 200,000
07/17/02 295,000
07/16/03 395,000
07/21/04 420,000
07/20/05 615,000
07/19/06 745,000
07118/07 885,000
07116/08 1,040,000
07115/09 1,195,000
07/21110 1,280,000
07/20/11 1,550,000
07118112 1,750,000
07/17/13 1,960,000
07116/14 2,195,000
07/15115 2,440,000
07/20116 2,630,000
07/19/17 2,985,000
07/18/18 3,295,000
07/17119 3,625,000
07/15/20 3,980,000
07/21121 4,305,000
07/20/22 4,765,000
07/19/23 5,205,000
07/17/24 5,670,000
07116/25 6,175,000
07/15/26 6,715,000
07/15/27t 7,285,000
Click to expand...
so they had to pay the principal plus the floating interest rate. If the city takes it over now they still have the majority of the principal to deal with.
 
Section 101

Section 101

All-Star
#21
#21
bajaden said:
I don't think the money owed to the league is just a passing car. At least if your trying to get another player to invest his or her money in buying the team. Problem is, we don't know what that debt is. Its rumored to be as much as 100 million dollars, and if so, thats as big a stumbling block as the money owed the city. Someone like Burkle would have to want a team badly to assume all that debt on top of whatever he had to pay for 52% of the team. Not saying it couldn't happen, but I wouldn't hold my breath.
Click to expand...
Like I said in another post, that debt is part of the value of the team. It would be part of the purchase price.
 
sidney

sidney

Starter
#22
#22
Section 101 said:
Like I said in another post, that debt is part of the value of the team. It would be part of the purchase price.
Click to expand...
Sure, but the debt is certainly not figured into the 350M-400M ish number. That's market value for the team. Take 52% of that for the Maloof's share and subtract the amount of debt the Maloofs are fully responsible for (which is not completely clear) and then you have the sale price. That's going to be a small number, which is likely why they won't sell.
 
Section 101

Section 101

All-Star
#23
#23
sidney said:
Sure, but the debt is certainly not figured into the 350M-400M ish number. That's market value for the team. Take 52% of that for the Maloof's share and subtract the amount of debt the Maloofs are fully responsible for (which is not completely clear) and then you have the sale price. That's going to be a small number, which is likely why they won't sell.
Click to expand...
Actually we are both right and wrong.

http://www.forbes.com/nba-valuations/

The Arena debt is included in the value so the city bonds would be included. But it doesn't look like the NBA loan is included in the valuation.
 
kingjatt

kingjatt

Starter
#24
#24
does this mean the kings weren't used as collateral with the NBA loan? which would mean the NBA doesn't have the leverage we thought it had over Magoofs.
 
sidney

sidney

Starter
#25
#25
Section 101 said:
Actually we are both right and wrong.

http://www.forbes.com/nba-valuations/

The Arena debt is included in the value so the city bonds would be included. But it doesn't look like the NBA loan is included in the valuation.
Click to expand...
Thanks for posting. They do list debt there but that doesn't appear to be factored into the "current value" column. Otherwise the value of New Orleans would be MUCH different than it is listed there considering their debt at the time.
 
D

Dreamtiger

G-League
#26
#26
NBA buys 50% from the Maloofs for whatever figure would pay off their debt plus give them about 20 million cash. They keep 2% ownership, and as a sign of goodwille, George is allowed to manage one of the snack bars (the one with the garlic fries).
 
M

mr. moustache

Bench
#28
#28
Boycotting MSE with the lone exception for seats to see the game live is the best way to keep the team in Sacramento and force them to sell. The city needs to show the NBA it remains a viable market, even after the intentional sabotage by the idiots. Outside that, Kings fans need MSE to start missing payments. Money in their coffers only delays the inevitable.
 
Section 101

Section 101

All-Star
#29
#29
mr. moustache said:
Boycotting MSE with the lone exception for seats to see the game live is the best way to keep the team in Sacramento and force them to sell. The city needs to show the NBA it remains a viable market, even after the intentional sabotage by the idiots. Outside that, Kings fans need MSE to start missing payments. Money in their coffers only delays the inevitable.
Click to expand...
Can I use the rest of the voucher money I got with my tickets?
 
Spike

Spike

Subsidiary Intermediary
Staff member
#30
#30
Dreamtiger said:
NBA buys 50% from the Maloofs for whatever figure would pay off their debt plus give them about 20 million cash. They keep 2% ownership, and as a sign of goodwille, George is allowed to manage one of the snack bars (the one with the garlic fries).
Click to expand...
Are you kidding? The garlic fries are my favorite. George would probably try to relocate the garlic to somewhere near the second concourse bathroom, then cry about nobody liking his fries. I'm not letting him mess up those babies.
 
You must log in or register to reply here.