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Kings Arena Update: Kevin Johnson working with Ron Burkle’s right hand man


The Sacramento Kings arena saga took an interesting turn on Wednesday when it was announced that the Maloof family had given up majority ownership of the Palms Casino after a “recapitalization agreement” with their main creditors, TPG Capital and Leonard Green and Partners. The deal reduces the Maloof’s ownership from about 80 percent to 10-20 percent, but the Maloofs will continue to operate the casino.

The recapitalization agreement doesn’t come out of nowhere, however, as Bloomberg News and many Las Vegas outlets reported in January that there was a strong chance that this would happen, though the Maloofs refused to acknowledge that they would sell or that the Palms was in trouble.

Meanwhile, on Monday, Mayor Kevin Johnson announced the identities of the 70-person Here We Build committee, named after the grassroots movements created by Blake Ellington of #HereWeStay, and modified into #HereWeBuild when local radio personality Carmichael Dave created a pledge drive for the ages.

And if you’re a fan of political and financial All Star teams, you probably want to stand in line to get your briefcase autographed.

Headlining the committee as co-chairs are California Senate President pro Tempore Darrell Steinberg and California State Senator Ted Gaines, though the big heavy hitters here include the guy whose feasibility study is being used as Sacramento’s blueprint, David Taylor, and political heavyweight Darius Anderson, who presented to the NBA Board of Governors back in April when the Maloofs applied their full court press to move the Kings down to Anaheim.

As for Taylor, his ICON Venue Group is partially owned by sports facility giant Anschultz Entertainment Group (AEG), who has the money and wherewithal to quickly implement a time-sensitive, politically driven arena project, though there have been no public statements made to the effect that they are on board in an official capacity for now.

Anderson’s inclusion is the largest elephant in the room, however, since he is a close advisor to none other than billionaire Ron Burkle, who was reportedly interested in buying the Kings back in April.

It was this interest that created the most quotable moment in the saga to date, when NBA insider Sam Amick reported that Commissioner David Stern made a wise crack saying K.J. was bringing him a “used car dealer,” but upon learning that the billionaire was interested in buying the Kings he grew quiet and then said, “You’ve got Burkle?”

Burkle was recently ranked No. 347 by Forbes among the world’s richest billionaires, and he built his empire in the grocery industry, parlaying several successful deals into a massive financial empire across many industries.

When the Maloofs were confronted with news of Burkle’s interest in buying the Kings at the NBA Board of Governors meetings in April (a move they claimed to have rebuffed a month earlier), they were outwardly angry and they insisted that their team was not for sale. Stern would eventually echo those sentiments by downplaying a potential purchase by Burkle, and since then Burkle’s name has fallen out of the Kings’ news cycle.

But that doesn’t necessarily mean he has stopped flirting with professional sports. Burkle, also a part owner of the Pittsburgh Penguins, has reportedly joined up with Dodger great Steve Garvey to form a group interested in purchasing the struggling Dodgers franchise. This follows his attempts to buy the Pittsburgh Pirates and Washington Nationals, and if you go back to 1999, his failed attempt to bring football to L.A. with, wait for it, AEG’s Tom Leiweke.

Incidentally (or not), AEG attempted to lure Burkle’s Penguins from Pittsburgh to Kansas City, and after that failed, AEG would later help Kansas City pass a public-private ballot measure to build the now-thriving Sprint Center that returns the city significant revenue based solely on concerts and events.

And just when it appeared that Burkle was falling off the Kings’ radar, a May 18 report came out of Las Vegas from none other than Lifestyles of the Rich and Famous host Robin Leach, who wrote that Burkle “insists on re-entering the Las Vegas market.” After the company Burkle bought shares in, the Morgan Hotel Group (MHG), failed to turn around their struggling Hard Rock Café property – it was sold off to creditors in March, much to the chagrin of Burkle, apparently.

Afterward, Burkle upped his ownership stake in MHB to approximately 30 percent and installed his guy, Michael Gross, as CEO.

At least one investment banking group, Jeffries, believes they intend to grow the company rather than sell it. Leach, who may not appear on the outset to be the best source of financial news, has spent the last 10 years on the Las Vegas industry news beat, and goes on to write that Burkle and his Morgan Hotel Group have “been actively kicking the tires, examining facilities and asking tough questions of a hotel group (in Las Vegas) willing to sell off one of its properties.”

Wait. Didn’t the Maloofs just sell? Yes they did – to two separate private equity firms in Leonard Green and TPG Capital. TPG owns Caesars Entertainment and would theoretically take over the Palms, but Leonard Green has also been trying to buy up gambling entities while the gambling industry is bottoming out – so it’s still anybody’s guess what the end-game is over at the Palms.

Let’s be clear – Leonard Green isn’t Burkle, and Burkle isn’t Leonard Green, but maybe Burkle is Finkle and Einhorn is a man.

Leonard Green and Burkle’s investment firm, Yucaipa Companies, both bought large portions of the grocer Whole Foods in 2009. And in 1991, Burkle sold his Almac’s grocery stores to Leonard Green for $75 million. All the while, both have been extremely active investing funds for the California Public Employees Retirement System over the last two decades. Surely it’s possible that in the elite rungs of society, where the billionaires play Kevin Bacon’s Six Degrees of Separation game with themselves all the time, that any interaction between the two entities is purely coincidental.

But just to be sure, I may have to go down to the Palms this Wednesday when Burkle will reportedly be there to celebrate the NHL awards and ask him about it myself.

The Maloofs, for their part, are not publicly tipping their hand regarding the involvement of Darius Anderson. George Maloof recently told Dale Kasler (via Ryan Lillis) of the Sacramento Bee that Anderson’s involvement in the committee “doesn’t give me any thoughts or concerns.”

As for the state of the funding hunt taking place in Sacramento, the jury is still out whether the $400 million wiped off the books at the Palms will allow the Maloofs to bring more money to the table for a new Entertainment and Sports Complex (ESC), though that doesn’t mean they should have to. After all, as reported yesterday, Anaheim is going forward with improvements on the Honda Center and is welcoming the Kings with a shiny new credit card. Besides, it’s entirely possible the new financial flexibility could be funneled back into the Palms, though pumping up your newly divested asset with freed up funds doesn’t sound like ‘Plan A’ for cash-strapped NBA owners looking to fund an arena.

Regardless, the Maloofs have said that they would contribute toward funding the ESC, so this would appear on the surface to give them better flexibility in doing so.

The 70-person Here We Build committee, meanwhile, consists of every expert, partner, planner, lawyer, community leader, and politician that would be needed to complete an endeavor of such magnitude. According to a source close to the situation, the NBA has also “firmly planted their feet in Sacramento,” and has “sent their best lieutenants to work day and night to get an arena built.”

Numbers-wise, the commission has enlisted the services of at least three well-respected consultancies to review the economic impact of the undertaking, which according to well-placed sources will show enough tax revenue and job creation to not just justify the new Entertainment and Sports Center – but also give political cover to the various bodies that will need to approve the proposal.

What this means, the source says, is that the tenor of the discussion in Sacramento has changed from ‘we don’t want to pay for this’ to ‘we need to pay for this, as it may very well be the difference between economic revival and economic disaster.’ And while there will certainly be skeptics and opposition groups that may choose to latch onto the issue, they could be committing political suicide as the Here We Build committee continues to release positive economic findings.

What does it all mean? It’s hard to say anything definitive right now. But while Kevin Johnson orchestrates his regional dream team, the powerful triad of Darius Anderson, the ICON-David Taylor group, and the NBA are knee deep in the fight to keep the team in Sacramento. And whether or not AEG or Ron Burkle can come along for the ride, the amount of firepower in Sacramento right now is big news for Kings fans.

Update (Saturday, June 18, 2011): The Sacramento Bee reports that the Maloofs will own just two percent of the Palms, according to regulatory documents.  They could have the option to buy back a significant share, up to 20 percent, and in the meantime TPG and Leonard Green will each own a 49 percent of the company.

On the surface, this would strengthen the chance that the Maloofs are freeing up funds to contribute toward Sacramento’s proposed Entertainment and Sports Center.  As for TPG and Leonard Green, the fact that the pair would have matching 49 percent shares creates an interesting dynamic, whereby each company could have the same voting rights (with the Maloofs holding a tie-breaking vote).

Stephen Curry abuses Sun’s Price with behind-the-back, pull-up three (VIDEO)

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That is just cruel.

An on-fire Warriors team dropped 44 on the Suns in the first quarter Saturday, and Curry had 19 of those points going 5-of-6 from three. The Suns’ had no defender who could begin to hang with him. Certainly not Ronnie Price, who came in off the bench and got abused for his efforts.

Curry finished with 41 points, never had to set foot on the court in the fourth quarter, and the Warriors improved to 17-0 on the season. Just another day at the office for them.

Philadelphia has dropped record 27 in a row dating back to last season

Brett Brown

We tend to think of record streaks having to be in one season, not broken up across two.

But if you can suspend that, the Philadelphia 76ers are now the owners of the longest losing streak in NBA — and major professional sports — history.

With their tough two-points loss to Houston Friday night, the Sixers have lost 27 in a row. The Sixers dropped their final 10 last season and with the loss to the Rockets are 0-17 to start this one.

That bests the 26-game losing streaks of the 2010-11 Cleveland Cavaliers and these same Sixers from 2013-14. Looking across sports, the Tampa Bay Buccaneers of 1976-1977 also lost 26 in a row, which when you consider the length of the NFL season is pretty embarrassing.

The Sixers struggles are born from a plan by GM Sam Hinkie (and approved by ownership) to get better long-term by being bad now and hoarding draft picks. It’s a strategy that can work if Hinkie nails the draft picks (the book is out on how Hinkie is doing on that front). And they are committed to it through at least this draft.

But don’t think for a second the players and coach are trying to lose.

If you have watched the Sixers play their last few games you know the players are trying hard to get that victory (and almost have a couple of times). The effort is there, they are just outmatched and lack the kind of presence at the end of games to execute under pressure (something a couple of quality, regularly-playing veterans might help, but that’s another discussion). They have the point differential of a team that should have a couple wins; they just haven’t been fortunate. It happens. Go ahead and blame management if you think this plan is an abomination. Just don’t question the desire or effort of the players or coaches, that is not in doubt.

The Sixers play at the Grizzlies Sunday, then have maybe their best shot at a win for a while when they host the Lakers on Tuesday.



Byron Scott, is it time to bench Kobe Bryant? “That’s not an option.”

Kobe Bryant, D'Angelo Russell, Byron Scott

Kobe Bryant‘s shooting woes this season have been well documented. Let me explain… no, there is too much. Let me sum up. Kobe is shooting 31.1 percent overall and 19.5 percent from three, all while jacking up more threes than ever before. He was 1-of-14 shooting against Cleveland, and that’s as many shots as rookies D'Angelo Russell and Julius Randle got combined.

If Kobe keeps shooting like this while dominating the ball, is it time to bench Kobe? Coach Byron Scott laughed at the idea, as reported by Baxter Holmes at ESPN.

“I would never, never, never do that,” Scott said after practice at the Lakers’ facility. “That’s not an option whatsoever. No, that’s not an option.”

It’s not an option because this is the guy the fans have paid to see, at home and on the road (the Lakers have still sold out every road game this season, the only team to have done so). Kobe is the draw, he’s going to play.

That doesn’t mean Scott is handling all this well, Kobe has no repercussions for his actions.

Byron Scott is an enabler with Kobe. In his mind Kobe has earned the right to play poorly because of his career, which is just hard to watch.

The real issue I have with Scott enabling Kobe is the double standard — minutes for Russell and the other young players get jerked around when they make mistakes. Scott sounds and acts like a guy with a couple rookies on a veteran team where the objective is to win as many games as possible.

This can’t be emphasized enough: the primary goal for the Lakers this season is to develop Russell, Randle, and Jordan Clarkson (and Larry Nance Jr., who has impressed). But Russell has sat a lot of fourth quarters, and when Scott is asked if playing in those blowout minutes might help develop the young point guard faster, he says, “Nah.” Scott has benched Clarkson at points and called him out in the media.

Reduction of minutes can be a valuable teaching tool with young players — if the conditions of them getting those minutes are precisely laid out. Clear rules with rewards and consequences. That is not the case in Los Angeles, where Russell has said Scott has not spoken to him much about what he’s doing wrong and why he’s spending the ends of games benched. That’s not coaching a guy up; that’s not player development. There need to be clear guidelines and structures for young players to follow.

The only guideline in LA seems to be “Kobe has carte blanche.”

Boston police now probing fight involving 76ers center Okafor

Jahlil Okafor

BOSTON (AP) — Boston police say a man has come forward saying he’s the victim in a fight involving Philadelphia 76ers center Jahlil Okafor that was recorded and posted online.

Authorities say a man filed a police report Friday saying the fight outside a nightclub left him with stitches over his eye.

Police say the alleged victim reported the fight began after some of his female friends refused the advances of two men, including one believed to be Okafor. The man told police Okafor punched him and knocked him to the ground.

Okafor says he’s embarrassed about the scuffle and is dealing with the team and league on possible discipline.

The confrontation happened early Thursday morning after the 76ers fell to 0-16 on the season. The Sixers rookie said he was being heckled.

Previously, the police had said they were not investigating the incident.