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

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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).

CJ McCollum on Carmelo, Kanter trade: “Stay woke, it’s a business”

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The most insane NBA offseason in recent memory got weirder this week when Carmelo Anthony was traded from the New York Knicks to the Oklahoma City Thunder in exchange for Enes Kanter, Doug McDermott, and a first round draft pick.

The trade has made many of us wonder just what the on the court play will look like in Oklahoma City this season with a high usage set of players in Russell Westbrook, Paul George, and now Carmelo.

Meanwhile, Kanter had made comments earlier in the week about expressing his appreciation for the fans in Oklahoma City. Having been traded just a few days later, that apparently didn’t sit right for some people. Or at the very least, it appeared to be a teaching moment.

Via Twitter:

There’s no doubt about this fact, and it is hard to try to refute McCollum here. This is the nature of the league and there is no such thing as complete loyalty — at least in the sense of how most people understand it interpersonally — between employers and their employees in the NBA.

Teams are going to trade players to make sure they can win the most games and maximize their profits. Likewise, players should take the biggest contract they can get if they feel that is in their best interest.

In any case, we are all excited to see what kind of shenanigans happen in Oklahoma City next year.

Paul George on Thunder: “This feels like a championship team”

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They have an MVP, top-five NBA player. They have another All-NBA player who is a strong wing defender. They now have an aging all-star who still can get buckets with the best of them. There is a strong collection of role players who can help form a solid defense.

On paper, there’s a lot to like with the Oklahoma City Thunder.

Paul George realizes that, as he said to Sam Amick of the USA Today.

“This feels like a championship team,” George told USA TODAY Sports. “I’m in a good place. I know Russ (Westbrook) is in a good place. Melo is motivated more than ever…You put us three together, who all have something to prove still, (and) we’re going to be a special team. We have a young group, a lot of talent here, an unbelievable coach (in Billy Donovan), (and) as you see, a front office that’s willing to do whatever it takes to improve the team. It just has all the makeups to be a great organization and a chance to put championships together.”

Championships? Plural? That implies the team would stay together, and sorry Thunder fans, but that is far from a sure thing. First, financially there is no realistic way Oklahoma City can afford to sign Russell Westbrook and Paul George max deals (which they both will get) and keep Anthony if he opts into the final year of his contract for just shy of $28 million.

OKC is a small market team that simply would lose a lot of money to keep the band together, and this ownership group traded James Harden out of fear of a massive luxury tax bill. (They will pay a tax bill of about $24 million for this season if the roster stays as is.)

Also, George’s camp made it very clear during the run-up to his trade he plans to test free agency and has a strong lean to the Lakers next season. He may be more likely to stay in OKC now after the trade, but how much more?

However, George is right, this team does look like a roster that could contend for a title most years — and maybe be in the mix this year. We will put aside the Warriors challenge for a moment (they are still the clear favorites if they stay healthy) and get to the big question for the Thunder:

Will their big three learn to sacrifice, learn to mesh, learn to play together as a team as a championship team does fast enough? The 2008 Celtics did, but that team of veterans has been the exception. It took LeBron’s Miami Heat two seasons to learn how to win, and the same when he came back to Cleveland. OKC doesn’t have two seasons, they have to do it fast. It’s possible, but not easy.

George is right, this is an excellent Oklahoma City team. The Thunder are now right in the middle of that second tier in the West with Houston (another team that has to learn to mesh and sacrifice) and the Spurs. That’s a great place to be.

Is it a place George wants to stay? That question will hang over the Thunder all season.

 

Mark Cuban: Trump has “got to be able to take the blowback” from comments

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President Donald Trump used the bully pulpit of his office to, well, bully — he fired shots at the NFL over its concussion protocols and players kneeling during the national anthem. Then he rescinded his invite to the White House to the Warriors after Stephen Curry said he would vote not to go.

Sports stars fired back. LeBron James called Trump a bum, Chris Paul asked if he didn’t have better things to worry about, and the Warriors said as a team they would use their time in Washington this season to “celebrate equality, diversity and inclusion — the values that we embrace as an organization.” Even supporters of the President, such as Patriots owner Robert Craft, rebuked the president for his comments.

Dallas Mavericks owner Mark Cuban told NBC News in an exclusive interview for Meet the Press Trump has to be a big enough man to handle people standing up to him.

“If the president’s going to say something condemning a person, an industry, a sport, then he’s got to be able to take the blowback that’s going to come back,” Cuban told NBC News in an exclusive interview for “Meet the Press.”

“So LeBron [James] and Steph and any athlete, any owner, it’s an open door now, and so they have every right for the same reasons to be able to say whatever’s on their mind,” he said. “Now we’ll be able to see if he can take it.”

Unlike previous presidents of both parties, Trump is not good at letting criticism of him and his administration roll off his back to stay focused on his agenda. It’s more personal with him, and that is something Warriors coach Steve Kerr said is a problem for him, and the nation.

Bottom line, NBA players are not going to back off — their base isn’t going to push back against them for their comments. Most are going to nod their heads in agreement. The NBA fan demographic is not the NFL’s. This storyline is far from over.

Three questions the Indiana Pacers must answer this season

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The NBC/ProBasketballTalk season previews will ask the questions each of the 30 NBA teams must answer to make their season a success. We are looking at one team a day until the start of the season, and it begins with a look back at the team’s offseason moves.

Last Season: 42-40, swept in the first round

I know what you did last summer: Larry Bird resigned then the Pacers traded Paul George for Victor Oladipo and Domantas Sabonis, a horrible deal that got the summer off on the wrong track. Indiana also swapped Jeff Teague, C.J. Miles and Monta Ellis for Bojan Bogdanovic, Darren Collison and Cory Joseph in order to prevent bottoming out. The Pacers picked T.J. Leaf (No. 18), Ike Anigbogu (No. 47) and Edmond Sumner (No. 52) in the draft.

THREE QUESTIONS THE PACERS MUST ANSWER:

1) Will Indiana escape its unsatisfying track? The Pacers are headed toward winning 30-something games, missing the playoffs and picking in the bottom of the lottery. It’s a miserable place to be.

Be just a little better, and they could make the playoffs in the lowly Eastern Conference. Be just a little worse, and they could land a premier draft pick.

Either direction is preferable to the apparent status quo.

The Pacers clearly don’t want to tank. Hence, their offseason strategy. But if the season goes south quickly, they could embrace losing by trading veterans and/or giving more minutes to young players.

Competing for the playoffs is a little trickier, but Indiana has enough veterans where that could take care of itself. The odds are against it, but this team is capable of sneaking in with the right breaks.

2) Can Victor Oladipo handle the expectations thrust upon him? Oladipo didn’t choose to return to the basketball-crazed state where he starred in college. He didn’t ask to be the Pacers’ main return for Paul George.

But here he is.

Oladipo is a solid player, and at 25, he might still be improving. He’ll have to in order to justify the George trade (and maybe even his four-year, $84 million contract extension that kicks in this season).

No longer playing with Russell Westbrook should help. Oladipo regressed while trying to play a spot-up role next to the Oklahoma City superstar last season. Indiana needs Oladipo to be more aggressive with the ball, a role that better suits him. Whether he’s good enough to handle those responsibilities on a good team is another question entirely, though.

3) Will Myles Turner break out? With George gone, Turner is now the Pacers’ franchise player (ignoring how the team might market Oladipo, who returns after starring with the Hoosiers).

Turner has all the potential to be a modern rim-protecting, 3-point-shooting center. He can get more comfortable beyond the arc. He must fine-tune his defense. But all the future looks bright for the 21-year-old.

He was intriguing as a rookie then even better last year. How steeply Turner continues to ascend will play a major role in whether Indiana exceeds expectations this season – and how its rebuild looks beyond.