Mayors vs. the Maloofs – now there’s a spectator sport.
The mayor of Virginia Beach, Va., Will Sessoms, said the city must know by today whether the NBA team targeted to anchor a proposed arena has reached an agreement with the company that would operate the facility. Otherwise, he may drop the arena plan.
The Sacramento Kings are rumored to be the team that Comcast-Spectacor, a sports and entertainment company, is trying to lure to Virginia Beach in return for a free arena.
Sessoms said he wanted a commitment before he goes to the state General Assembly and asks for $150 million to help build an 18,500-seat arena estimated to cost $426 million. The deal calls for the city to put up $241 million and Comcast to add $35 million. The team would fork over little to nothing.
The governor of Virginia has called the expenditure of public funds a waste of money because an arena would provide little economic return to the state. He refused to include $150 million in his budget plan.
I assume the deadline-demanding Sessoms is familiar with Sacramento Mayor Kevin Johnson’s embarrassing failure to wring a deadline deal out of the Maloofs. Although Johnson has accused the co-owners of the Kings of backing out a deal last March to build a downtown arena, it’s pretty clear there never was a deal. Even the Sacramento Bee, which has adopted Johnson’ spin on the negotiations, ran a story in April headlined “a deal that really wasn’t.”
In my view, Johnson announced a deal because he thought he could use public pressure to get the Maloofs to accept an agreement that didn’t give them every penny they wanted. Alas, he was painfully wrong. He was dealing with astute businessmen with an eye on their bottom line.
Sessoms must know the Maloofs won’t commit to an arena plan in Virginia Beach before a financing plan is established. Why would they give up their leverage?
No, Sessoms went out on a limb with his arena plan and is looking for a face-saving escape. Neil deMause, co-author of Field of Schemes and a blog of that name, sounds right in theorizing that Sessoms set a ridiculous deadline “so that when the arena deal crashes and burns even more than it has already, he can blame Comcast for not getting a team instead of himself for not having any idea how to pay for the damn thing.”
The Maloofs won’t commit to anything until they get exactly what they want. They’re skilled at playing the public financing game. Too bad their team doesn’t play basketball at the same level.
With all the rumors swirling about a Kings sale to a Seattle group, it looks like this story is about to take another turn. If the Maloofs get the $500M to $600M they are asking for, are they bad businesspeople after all?
Hi Jason, I think the Maloofs have outfoxed a lot of folks and are playing the owner game rather well.
Paul,
Just want to point out that your so called astute business men (The Maloofs) are a financial shell compared to what they used to be. They basically defaulted on their Casino deal which left them with 1% ownership, had to sell of their beer distribution line to pay bills and slashed all the salary within the Kings to keep it going. I am not sure where the “astute” part of the statement is based on fact or reality.
Unfortunately, you seem just as clueless as the unfortunate owners of the Kings. It is obvious The Bee has given you a forum based on something other then your ability to use google or facts!
Jordan, the Maloofs almost got $255 million of Sacramento-taxpayer money, and they still have a mayor ready to dance to their tune.
I’m confused, the Maloofs are skilled because they can’t complete a deal?
Astute businessmen?
Sold their beer distributorship cash cow
Lost complete control of the Palms – now own 2%
Owe upwards of $200M to the city/NBA so the actual net value of the Kings is minimal
If this is what you classify as astute, then what do you classify as incompetent?
If they knocked on the doors at the NBA today, the league would not open it.
Paul, Be thankful for little victories!!!! Your terrible Kings beat our terrible Cavs last week!! No one knows how to shoot very well anymore! JCC
I’m sorry, but did you actually refer to the Maloofs as being “astute businessmen with an eye on their bottom line”?
Well, SierraSpartan, they have the upper-hand on two mayors.
Do they? Really? seems like they are pretty boxed in. If BOTH mayors did nothing from here on out how do the Maloofs win AND keep the team?
In what way do they have the upper hand? They have been unable to reach their goals of moving the team and getting a new arena. Walking away from the negotiating table doesn’t mean you have the edge.
Seriously, you haven’t been following the Maloofs saga for very long if you think they’re astute businessmen. They inherited their fortune, then proceeded to lose it in a series of ill-advised real estate deals. Their financial downfall has meant that, unlike most NBA owners, the Maloofs *do* depend on their team as a source of income. They’re waiting for some city to essentially give them a $400 million-plus arena and all the profits to be derived from it because they view that as their means to renewed wealth. But such a deal has proven politically impossible in Sacramento and Virginia Beach, and for good reason. It’s not a wise expenditure of public funds.
Stay tuned, Joe. There’s a limited supply of pro basketball franchises and the Maloofs have one. That’s why mayors dance to their tune.
Not at all Paul. How does two blown deals benefit w win for an ownership group with a team that is losing money, losing fans and losing games at astronomical rates? The Maloofs have not received the sweat-heart deal they are clearly seeking and Mayor Johnson clearly won the battle of public opinion as polls and his election (after the Arena fiasco) prove.
Really? They’ve pissed off the commissioner of the league, completely alienated themselves from the city in which they are trying to sell tickets and a city that was trying to secure them a completely free arena and an $80 million gift, wasted millions of dollars in taxpayer-funded studies, and gotten zero new arenas for their troubles. If that’s what it means to be a good businessman these days, who will save society from the businessmen?
If there is anyone people should be pissed at it is David Stern, the piss ant dictator of the league. There is simply not enough bad things that can be said about the man. Conniving, weaselly liar is just the a start.
“Well, SierraSpartan, they have the upper-hand on two mayors”
Not to mention 2% of a Vegas Casino (that they used to own outright), and awesome interests in OMG! phone covers and Zing Vodka. I hear they got a decent price for their liquor distributorship as well.
Gotta be real astute to get to where the Maloofs are. /sarc
Paul, I think that’s going a little far, considering that the end game simply perpetuating the default scenario. The Maloofs have nothing to lose (except for public support, which seems like a bit of a lost cause), so they, by default, have the upper hand. The Maloofs have no reason to accept any plan that they perceive to be worse than the “best alternative to a negotiated agreement”, which, in this case, is the status quo.
I have said all along it is a dumb idea. My concern was/is — do they really think people are going to pay tolls? Virginia Beach is an ” end of the road ” destination. Much to far for a one night stand. Cleveland Ohio had a beautiful arena built halfway between them and Akron. It did well until gas prices went up to $1.00 or so per gallon. Was torn down. Now it is a beautiful meadow in The Cuyahoga National Park.
Umm…there was a deal. The Maloofs and KJ and the NBA put one together during the All-Star Break. This said deal was celebrated on the floor at a Kings game by the Mayor AND the Maloofs. It was days later that the Maloofs backed out. Please get your facts straight! Even David Stern was ticked with the Maloofs for backing out! The fact is this – the Maloofs have no money to support a NBA team. Everyone knows this.
The Maloofs let NBA executives know of their unhappiness with the proposed deal well before our mayor tried to outfox them. Check the email trail.
D. Sims is right, though, that at least some of the Maloofs thought there was a done deal. Someone decided it would be a good idea to stage a big celebratory show at a Kings home game (Gavin’s famous “It’s all about this (Sacramento)”/”shining beacon of light” moment), produced a whole “thank you Mayor Johnson, etc.” video montage that they played on that night’s telecast, and Gavin thanked the city council and the mayor in person at the meeting at which the term sheet was approved. Maybe George had his fingers crossed behind his back when he said “I think it’s a fair deal” to the cameras in Orlando, but he clearly never communicated that to his brothers.
Unfortunately for the Maloofs, they present themselves as a single entity that runs things, so the fact that some of the Maloofs were treating things as a done deal means that when George subsequently killed the deal and trashed the city of Sacramento in his Friday the 13th press conference, it absolutely represented the Maloofs reneging on their commitment and backing out of the deal. I can’t say “I love you”, then smack you in the face and claim that clearly I never loved you because I smacked you in the face. Well, I could, but that would make me no better than a Maloof. By the way, there is video of all of this readily available if you missed any of it. The Maloofs can’t hide from their words and actions, no matter what George’s email trail says.
skill at the public finance game? how many arena deals have the actually completed?