Tag:NBA business
Posted on: May 2, 2011 11:47 am
Edited on: May 2, 2011 12:28 pm

Kings staying, won't file for relocation

Posted by Royce Young

There they stayed. The Kings aren't moving. At least for now.

According to numerous outlets, the Kings have ended their relocation bid to Anaheim and will remain in Sacramento, at least for another year.

The Maloofs, in a press release said:
Out of respect to Kings fans and the regional business community, we have decided to remain in Sacramento for the 2011-12 season. The fans’ spirit and energy, specifically our season ticket holders, has been remarkable and we are truly thankful for their loyalty. We also are greatly appreciative of the support from our corporate sponsors as well as other local businesses that have come forward in recent weeks.

Additionally, we would like to take this opportunity to send a heartfelt thank you to the loyal and hardworking team members within our organization. From the game night staff to the front office, coaches, and players, we are grateful for their professionalism and devotion.
Also, the release thanked Sacramento mayor Kevin Johnson but also mentioned the ominous future for the city as well. "However, if an arena plan cannot be finalized in a timely fashion, the NBA¹s relocation committee has assured Maloof Sports and Entertainment that it will support an application to move the franchise to another market starting in 2012-13."


It really shouldn't come as a huge surprise as the NBA had recommended the team stay in Sacramento to go along with about 50 other signs and reasons the Kings should remain in town. Of course that didn't stop the Maloofs from pursuing every available option to continue the relocation process. But in the end, without the league's support and a sketchy plan, they decided to withdraw.

Good move. Er, I guess good non-move. You know what I mean.

Still, at the heart of this is the arena. While the Kings bought themselves another year in Sacramento, the franchise needs to move ground (literally or at the least figuratively) on a new arena otherwise we'll be watching this same scenario unfold next year. The interesting part then will be if Sacramento still doesn't make progress and the team seeks relocation, is Anaheim the choice? Something tells me no because of all the blowback there was from that.

(This would be a pretty good time to start building your own new arena, Seattle. That is, if you want a new team.)

I don't know enough about the current situation in Sacremento to say whether or not a new arena is likely, but obviously that's the issue going forward. Get that built and the team is there for at least another 20 years. Don't, and this whole thing will come back and the NBA might not be willing to step in next time. The threat of relocation is real and the Maloofs are serious. No business owner wants to lose money. That's not the point of owning a business. So if things don't progress, they'll look at their options.
Posted on: April 12, 2011 8:51 pm
Edited on: April 12, 2011 8:56 pm

Maloofs owe the NBA $75 million, might lack votes

Posted by Royce Young

According to KFBK in Sacramento, the Kings have taken out a line of credit worth $75 million from the NBA. The report says that Kings spokesman Mitch Germann said the team used the line of credit but wouldn't say specifically on what.

This is something I did not know about, this line of credit thing. Evidently, the NBA has $2.3 billion available to every team in its line of credit program. The report says this: "NBA Spokesman Mike Bass says 19 teams have borrowed money through the league Line of Credit program. The max any team can borrow according to Bass is $125-million." News to me. And the Kings didn't hesitate in using it.

I think most people's first thought was that the number has something to do with relocation, which is very expensive. Just to relocate, you have to pay $30 million to the league as a fee. And that's just the start of it.

Obviously the franchise is struggling financially, hence the relocation talks. The Maloofs have seen their various business ventures sag a bit during the recession and the Kings are not immune as their value has dropped (according to Forbes) by almost $100 million.

Here's something interesting mentioned in this report though -- the Kings might not have the league support needed to relocate to Anaheim:
Sources have told KFBK that an approximately 200-page document outlining the Kings move to Anaheim currently sits on NHL Ducks Owner and Honda Center operator, Henry Samueli's desk. Just last week lawyers were combing through the finer details of the deal. Honda Center officials would not confirm if Samueli had signed off on the agreement.

Those close to the negotiations say Samueli and the Maloofs are not sure they have enough support from the rest of the league's owners to approve the move. Kings officials have said all four Maloof brothers will be attending the NBA Board of Governors' meetings this week in New York City to try and convince at least 15 other teams to allow the Kings to relocate.
It's already been made clear that both Laker owner Jerry Buss and Clipper owner Donald Sterling are not really in favor of making a new bedfellow in the Los Angeles area, but they Maloofs have a lot of convincing to do to get a majority of owners on their side.

With the last NBA relocation, the Sonics moving to Oklahoma City, 28 owners voted in favor of it. The only two that didn't were Mark Cuban and Paul Allen.

Relocation is a mess. It's not easy on anyone, especially fans. The Kings are clearly losing money and want to try and find greener, as in money-making, pastures. It's hard to keep up with this thing but maybe it's a little too early to etch the move in stone.
Posted on: March 24, 2011 4:26 pm
Edited on: March 24, 2011 6:49 pm

Report: Plan to keep Kings in Sacto 'laughable'

Posted by Royce Young

Earlier, there was a story out with a reported new plan to keep the Kings home in Sacramento. There weren't any specifics, just the word that the money was "in place" to keep the team in California's capital city.

Except that report might not be right. According to Marc Spears of Yahoo! Sports on Twitter, a source found the television report "laughable" and called the chances of the team staying "remote."

Darn. Not good.

All signs point to the Kings exiting Sacramento unless something drastic happens. The earlier report was encouraging, but with the way it sounds now, it's back to the drawing board. Money is at the heart of the issue, so if there was a way to come up with funding, it certainly would change things. But that might not be the case anymore. Which means someone else will have to step up.
Posted on: February 2, 2011 10:43 am

Ratings way up for the NBA

Posted by Royce Young

The NBA is really popular right now. It's not where the NFL is, but it's actually gaining ground. Because of a resurgence in talent, the league really is at one of its best places in years.

And the numbers back it all up. Via Sports Media Watch, TNT averaged a 1.5 U.S. rating and 2.325 million viewers for 32 NBA games through January 27, up 25 percent in ratings and 31 percent in viewership from the same point last year (29 games: 1.2, 1.774M).

Also, NBA TV averaged a 0.3 U.S. rating and 383,000 viewers for its first 13 Fan Night telecasts. Which really isn't bad at all considering NBA TV isn't a standard cable option.

Attendance is moving up, ratings are up, revenue is up, but then again David Stern and the owners are saying the league is losing money and needs to scale back contracts. You can see the problem here for the players and owners.

That's why it's so crucial to avoid an extended lockout and any sort of work stoppage. The league is rolling along right now. It appeals to a younger audience and is building a core base of fans. Because of Dwight Howard, Kevin Durant, LeBron James, Dwyane Wade, Chris Paul, Blake Griffin and every other young talented player out there, the NBA really is at one of its best places talent wise in a long time.

Some of this really has to do with LeBron's decision and the Heat. It drew up serious interest in the NBA. Some has to do with the return of good basketball in New York and Amar'e Stoudemire. And a lot has to do with the league in general and how strong it is. Let's just hope we don't see a step taken back this summer.
Category: NBA
Posted on: January 14, 2011 8:55 pm

Anaheim making a strong push for the Kings?

Posted by Royce Young

It's no secret that the Sacramento Kings are looking at potentially relocating. The Maloof brothers even pulled out the deadly, "We'll look at our options" phrase. 

The early candidates that have been mentioned for Sacramento? San Diego, Seattle, Las Vegas or a return to Kansas City. You know, the same list that always pops up. But the real candidate might be just down the road a bit. Anaheim.

According to KFBK/1530 in Sacramento via the Orange Country Register, the Maloofs met recently with Ducks owner Henry Samueli to talk about his proposal to bring the Kings to Anaheim. 

Reportedly, Samueli offered the Maloofs a $100 million loan as part of the proposal to help cover the extra costs that come with relocation and territorial rights fees and also offered to help the Kings owners manage their debt.

That has to be an intriguing offer to the Maloofs. They're having some financial issues, but they don't want to sell. They want to keep the Kings franchise breathing and in their hands, but also get them somewhere that they can make money. 

The Kings have been pushing for a new arena and it's looking more and more like that will fail, even with the support of mayor Kevin Johnson. Without a new arena, the Maloofs may have their hands forced if they want to keep the franchise.

In Anaheim, there's a new arena in the Honda Center and the Kings could just slide in and be co-tenants with the Ducks there. Anaheim has also been mentioned as a potential landing spot for the Hornets, especially with the word about Larry Ellison trying to buy the team. I would bet if Ellison got his hands on the Hornets he would look to move them West as fast as possible. And Anaheim would likely near the top of his list.

But it's not a done deal that the Kings will move anyway. I'm sure the Maloofs would prefer to keep the team in Sacramento and just start making money there. And while they've got a new deal with Power Balance for naming rights, they need real money. That comes with new sponsorships, better attendance and a new arena. Unless they get that last one, they may have to, well, look at their options.

Posted on: December 8, 2010 10:23 pm
Edited on: December 8, 2010 10:46 pm

The NBA's NOLA dilemma: PR versus profit

As the NBA zeroes in on its acquisition of the Hornets, a moral versus business conundrum awaits the league and its owners over the future of basketball in New Orleans. 
Posted by Matt Moore

Let's start here: No one wants to move the New Orleans Hornets. You can't have watched footage of people dying in the Superdome and not have a soft spot in your heart for the Crescent City. The issue for the NBA as it takes ownership of the team is not one of what would make them and the rest of the world feel good. They know what that is. Find a local owner, keep the team in New Orleans, and everyone lives happily ever after. 

The question is whether that's a viable option and if they really feel that they're not just throwing money down a hole. The financial documents that came out Tuesday from Deadspin outlining the massive financial woes in New Orleans present a significant dilemma for the NBA and its owners as they try and determine the future of this franchise. There were questions about the viability of New Orleans as a market well before a hurricane overwhelmed the levies, and the questions extend not just to attendance and fan interest, but to market economics, sponsorship revenue, and the complete financial situation in New Orleans. This is all before we start to look at the relationship with the city's mayor and Louisiana's governor, both of whom have been very clear about one thing. They hope the NBA commits to keeping the Hornets in the city, but they will not be providing financial handouts in the form of tax breaks or anything else in order to make that happen. Not in this economy, not during the city's continued recovery, and not for a franchise that is a distant third in sports within the wards. (The other two being football and drinking.)

That's where things get tricky. If the NBA is pursuing its due diligence and trying to find the situation that yields the most promise financially within a decent time frame, it's difficult to see New Orleans as the answer to the riddle. Kansas City offers the building ready for attendance now, but has its own set of market questions. Anaheim offers the market and the building. Seattle offers the market and ownership. If David Stern is correct and this issue won't be resolved until after the CBA is resolved, that gives Seattle time to finance a new building as well as for Las Vegas to get approval for a new arena. Other cities waiting for the right situation might be in a better position by then to create an actual bidding war, which would only make it more difficult for the owners to select a bid from New Orleans. 

And yet, at the end of it, there are many positive signs towards New Orleans. Several owners are starting to make noise about being interested in offers. The goodwill of keeping the Hornets in New Orleans is something the league could use after ripping the Sonics away from Seattle under similar (though less emotional circumstances). Keeping the team local is the easy solution. But it also may be viewed as the impossible dream by owners. When the vote to move Seattle to OKC was made, only two owners voted against the measure, Paul Allen in the same area, and Mark Cuban, who questioned moving a big market team to a small market. Similar thoughts could be in play as the owners who voted for the most financially viable option follow suit and owners who question failing markets like New Orleans may not be moved enough to keep the team there. 

At the end of the day, the NBA seems very much in place to make a real "good faith" effort to keep the team in New Orleans. But the realities of the situation may force their hand in a direction no one wants to see. 
In unrelated news, the Hornets drew just a little over 10,000 for their game against the Pistons Wednesday night. 
Posted on: December 6, 2010 1:21 pm
Edited on: December 7, 2010 1:50 pm

The Hornets' potential relocation future examined

Should the Hornets not remain in New Orleans, where might they end up? We look at the options.  Posted by Matt Moore

With the NBA expected to take hold of the New Orleans Hornets without a locked on buyer in place, the next question will come immediately. What if a non-NOLA buyer comes through with the best offer? It's the money of the league and the owners that's being invested in removing George Shinn once and for all from the ranks of NBA ownership (see ya, George, don't let the luxury tax hit you on the way out), and the league will have a responsibility to both pursue and accept the best offer available. Should that offer come from someone outside the greater New Orleans area, it's entirely possible that the Hornets could be playing somewhere else in the near future. 

We've been down this road before. And while New Orleans lacks the great and storied history of the Sonics franchise, no one wants to see a city that fought back from the greatest natural disaster to hit a major metropolitan area in United States history lose its team. But this isn't about PR or kids with jerseys or history or anything else. It's about money. And other cities not only have incentive to bring in the team, but the most important assets to convince the NBA to abandon New Orleans: the buildings. 

New Orleans arena was built in 1999 for $114 million. It has a capacity of 18,000, 44 luxury suites, and has been described as "bland." It does not receive rave reviews from sponsors, guests, or media. The other cities in play have both newer arenas, as well as arenas fit more ably for modern NBA economics (luxury suites), etc. Others who do not have such arenas have the awesome draw of the almighty large market. 

So who are the prospective scavengers who might be circling while the Hornets continue to fill ... well, kind of fill New Orleans Arena? Here are the names being floated. (All arena information courtesy of Ballparks.com )

Kansas City: Kansas City once had an NBA team, the Kansas City Kings, now the Sacramento Kings, formerly the Cincinnati Kings, formerly the Rochester Royals, and briefly the Kansas City-Omaha Kings. But the team was terrible, management was terrible, and soon the team was off to Sacramento and the welcome bosom of cowbells. Kansas City is most often criticized as being a "college town," "a baseball town," "a football town" (what isn't?) and unable to support three major pro teams. The last of these criticisms ring most true as both the Royals and Chiefs struggle to fill their stadiums to reasonable capacities during down years (or as we Kansas Citizens like to call them, "the last ten years."

The "college town" aspect is a double-edged sword. While it's true that nearby KU and two-hour-neighbor MU hold the town's attention during basketball season, many of their players wind up in the pros. And at its heart, it's easy to argue that KC is a basketball town. It held the Big 12 tournament for years and the Big 8 before that. (And by "before that" I mean "before Texas used its influence to rob any other school in the Big 12 of any influence"). When the Heat and Thunder played a preseason game this fall, a packed house was in place. Then again, that's the Heat. Some towns simply aren't built for the pro game, and that's the argument of some in regards to KC. 

That said, the jewel in their crown is pretty simple. It's the building. Sprint Center, built in 2005 and opened in 2007, has a capacity of 18,555 with a considerably higher number of available luxury suites and club seating due to how the building was constructed. Specifically, the arena was built to capitalize on how current arena economics work. Tickets are valuable, to be sure, but the money is made with sponsorships, and luxury seating. 

What's missing? A buyer. AEG who owns the Sprint Center, made noise early on about pursuing either a hockey or basketball team to fill the arena. But with the Pittsburgh Penguins using them as a straw man to get a new arena in Pittsburgh, there has been no team to arrive. Furthermore, it turns out the arena is making more money as a concert venue than it may with a regular tenant. With the recession having hit Kansas City well before the rest of the country and a lack of progressive technology firms in the area, finding a prospective owner outside of AEG is going to be a hard sell. Kansas City remains a viable candidate but it remains to be seen if either AEG or the city will commit to making a serious inquiry toward the Hornets. 

St. Louis: Two Show-Me cities with an interest in basketball. Many of the same concerns with Kansas City pop up with St. Louis, only their baseball team pretty much guarantees a significant dropoff of attendance right when the playoffs would start. St. Louis has the population, and has the building (the Scottrade Center where the Blues play). 

The talks of St. Louis have never been as discussed as some of the other cities on this list, but with the Hornets being in such a unique position, it's possible a group could develop to push for a new team under the arch. 

Anaheim: Ah, California. Fun, sun, beaches, and lots and lots of sports teams. With the Los Angeles Lakers and Los Angeles Clippers turning such a huge profit (despite the Clippers being, well, the Clippers) it's no wonder the NBA would be interested in another California team. Anaheim's done well with the Angels and Ducks, and though the market would no doubt be over-saturated should the Hornets relocate to the nearby neighbor of the City of Angels, the high cost of living would bring ticket prices to a point where profit is a near-given. 

As for the arena? They've already got one in place. The Honda Center, home of the Anaheim Ducks, has a capacity of 17,174, with 84 luxury seats and 1,716 club seats. That's a lot of dough in a place ripe with firms looking to purchase such tickets for clients and as perks. It would make the fifth California team along with the Kings (should the Kings stick around in Sacramento) and Warriors, and the area has been invested in looking for a team for a few years. 

In truth, Anaheim is a low-risk move, but could also backfire if the city simply can't sustain three franchises, regardless of its proximity to LA. Additionally, it's unknown if Jerry Buss, who runs the league about as much as anyone who isn't David Stern, would be amiable to another competitor near his market. He brought in Donald Sterling to own and move the San Diego Clippers, but an outsider honing in on his territory may not go over well, despite the massive, all-encompassing popularity and profitability of the Lakers. 

Las Vegas : Long story short, there's no arena, but they're willing to build one if a team is relocated. It's a PR disaster for the league, but a financial windfall for the owners. While the fanbase is sure to be fickle, every high priced mogul and entertainer would have seats, and good ones, for a high price. Sponsorships would be easier to sell than lemonade in hell, and attracting free agents would be a snap. Nice weather, fun city, profitability, and the draw of having the city all to itself in professional sports? What's stopping them?

They still don't have the building. 

There's a group in place pushing for it who even said they had a team lined up . And petitions are being gathered in order to get a vote before the state legislature, but no word has come if they have received enough. The situation remains in flux. 

Seattle: As tempted as I am to scream "Back of the line!" considering Seattle voters had multiple chances to pressure their representatives to save the Sonics and chose to make their stand against corporate greed in the form of publicly funded arenas for privately held teams, it's hard to argue with the fact that Seattle got outright screwed in the Clay Bennett relocation of the Sonics to Oklahoma City as the Thunder. The fanbase is passionate, it's a large market, renewing basketball there would be seen as a good PR move that could dampen the outrage of taking a team away from the city that survived Katrina, and all that merchandise has already been manufactured with the Sonics logo.

The problem?

You guessed it. They still  don't have the building. Key Arena simply isn't up to snuff, built in 1962. But with a capacity of 17,072, it does hold 58 suites and 1,702 club seats. It can make money, but not nearly in the way some of the other newer arenas can, and renovation costs would be high (hence Bennett's ability to squeeze out). Seattle fans have been clamoring for public officials to finance a new stadium, knowing the presence of an open building would bring a team back like moths to a flame. No dice, so far. 

The biggest thing Seattle has going for it? Rich people. With Microsoft CEO Steve Ballmer vocal about the possibility of reacquiring a team, and with enough tech money in the area to finance a new arena in part, Seattle simply has the dough. While Seattle gets off more than it should for its complicity in the relocation of the Sonics, the fans were screwed, and this would go a long way with repairing national damage to the NBA's image in that event. Because moving New Orleans is fine, but Seattle really needs a team, apparently. 

Chicago : This one was brought up by Sports Illustrated  this week and it's an interesting question. Could Chicago support a sixth sports team, and a second basketball team? The Bulls undoubtedly would always be the favorite, the Yankees to the other team's Mets, as it were, but the market is indeed large enough to support a second team. Chicago has some of the best sports fans in the country, and attendance is almost always at stable league measures across sports. There are certainly enough investors to drum up an ownership group if someone was interested in a majority share, and sponsorships wouldn't be an issue, either. 

But what about the building? It already exists. 

The Los Angeles Lakers, Los Angeles Clippers, and Los Angeles Kings all occupy the Staples Center. While Staples is newer than Chicago's United Center which currently hosts the Bulls and defending Stanley Cup champion Blackhawks, the United Center is bigger, and you can make the dates work. The question would be if it would make financial sense for the United Center to give up the free nights for eight months of the year (geez the NBA season is long) in exchange for the tenant, and whether logistics costs would skyrocket too much with having to handle the demands of three teams. 

A second Chicago team would satisfy the NBA owners contingent's interest in a stable, big-market location. An at least temporary arena is in place should the team's owners decide they want their own digs in another part of town, and it's hard to see there being no interest in the club given how rabid Chicago sports fans are.  But that's a whole lot of teams in one market, and even New York has not had more than the Knicks in several decades (though they're due for a new neighbor in 2012). It would simultaneously be the easy way out and a bold move for the league to approve and push for a second team in the Windy City. 

New Orleans : If Gary Chouest is out, a new owner in New Orleans is going to have to come out of left field. The fact that the franchise now looks like a garage sale isn't probably going to bring owners out, at least not the ones the NBA would want. But hey, there's a blog of fans looking for investors to make the $17,000 investment so that the city could own the team. Imagine a blog running an NBA team. We're pretty sure that's about three steps from the apocalypse. 

All kidding aside, the NBA is right to pursue local ownership. We saw with Seattle how traumatic losing a team can be. And while Hornets fans certainly don't have the history or passion of those Sonics fans in number, there's no reason they don't have that quality of investment. Kids still love going to Hornets games with their families, and guys still go Hornets games and yell about Emeka Okafor after the game like any city. The right thing to do would be to keep the Hornets in New Orleans. 

The problem is that these days, the right thing to do is almost never the right business decision to make. 

We'll keep you updated as the Hornets' ownership situation develops.
Posted on: November 12, 2010 6:25 pm

Bucks move to trademark "Fear the Deer"

Posted by Royce Young

It was a catchy line that not only caught fire in Milwaukee around playoff time last season, but league-wide. Everyone was saying it, tweeting it and writing it. At this point, "Fear the Deer" is basically the Bucks' team slogan.

So of course someone needs to make some money off it. That's the way things work around here, right? Via the Milwaukee Journal-Sentinel:
The slogan is thought to have originated with ESPN's Scott Van Pelt on a SportsCenter broadcast, but other versions of how it came to be have surfaced. In any event, the phrase has become a hashtag on Twitter, gets mentioned often on Facebook and generally is the go-to rallying cry for Bucks fans.

The NBA and the Milwaukee Bucks have taken notice, too. Late last season, the NBA, at the request of the Bucks, filed for trademark rights with the U.S. Patent Office. This is routine, according to Mike Bass, senior vice president for marketing and communications at the NBA. Other teams have made similar requests.

That application is pending, Bass said.

Having taken that step, Bass said no one can use the phrase for commercial purposes without the permission of the Bucks and the NBA. If they did, it would be infringing on trademark rights, he said.

Now I don't know about you, but something certainly seems off with that to me. Nobody can really nail down where the phrase comes from, but it's obviously a fan rallying cry. And for the team to make money off of that feels weird. Obviously we shouldn't expect anything less from the big business owners of professional franchises and the NBA, but still.

Like what if the Red Sox decided to try and trademark "Yankees Suck!" as their slogan? Or "How 'Bout Then Cowboys" for the Dallas Cowboys? Or "F You LeBron" for the Cavs? Some things are better left for the fans. It's what makes all a little more fun. We have our saying. It's for us . If you're a real Bucks fan, you know about "Fear the Deer." I'm just not a fan of business folks swooping in and immediately trying to take over something organic like a fan slogan. Doesn't sit well.

But then again, if there's big money to be made here, maybe it'll prevent a lockout. If we're to believe David Stern and the league, the owners need every penny they can get.

Category: NBA
The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com