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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).

Goran Dragic’s teeth went through his lip last night (video)

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Goran Dragic has a habit of losing teeth, but not usually through his lip.

Cringe.

Report: Jeremy Lin indicates he’ll opt out, says he wants to re-sign with Hornets

Charlotte Hornets guard Jeremy Lin reacts after scoring against the New York Knicks during the second half of an NBA basketball game Saturday, Jan. 23, 2016, in Charlotte, N.C. Charlotte won  97-84. (AP Photo/Nell Redmond)
AP Photo/Nell Redmond
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Jeremy Lin said the Hornets “came out of nowhere” to sign him last summer.

His salary shows it.

With the market for Lin depressed following a dismal season with the Lakers, Charlotte snagged Lin for just the bi-annual exception. At least Lin – who bounced back with a solid year – got a player option for next season, when he’s due to make just $2,235,255.

Rick Bonnell of The Charlotte Observer:

Lin indicated he plans to opt out of his contract

Lin, who can opt out of next season on his contract, says he’d very much like to re-sign with the franchise this summer.

“I would love to,” Lin said Monday. “I don’t like moving every year, I don’t like packing and unpacking boxes. So we’ll see. But I’m definitely interested in coming back.”

“This is the most fun I’ve had in my six years” in the NBA, Lin said. “Being around a great group of guys and a coaching staff that really cares. I’ve learned so much about the game of basketball, particularly at the defensive end.”

The Hornets face a summer of tough choices after relying on so many players with expiring contracts.

Let’s say Charlotte renounces Troy Daniels, Jorge Gutierrez and Tyler Hansbrough and waives Aaron Harrison, whose salary is unguaranteed. The Hornets might not drop those low-cost players, but if it makes the difference between retaining a rotation player or not, they probably would. So, for these purposes, they’re out.

Counting cap holds for Nicolas Batum and Courtney Lee, Charlotte would project to have just more than $12 million in cap space. The Hornets could spend that money then exceed the cap to re-sign Batum and Lee, whose 2016-17 are likely to top their cap holds ($19,687,961 for Batum, $10,782,500 for Lee).

But that leaves just about $12 million to re-sign Lin, Marvin Williams and Al Jefferson.

Charlotte has Lin’s Non-Bird Rights (technically a form of Bird Rights), but because his cap would match the match the Non-Bird Exception ($2,682,306), that doesn’t matter here. It also doesn’t matter because Lin will command far more than that. So, cap space will be needed to re-sign him.

Ditto Williams and effectively Jefferson. The Hornets could pay Williams $12.25 million next season with the Early Bird Exception, but that likely won’t be enough to keep him. Charlotte has Jefferson’s full Bird Rights, but his 2016-17 salary is likely to fall short of his cap hold ($20,250,000). So, re-signing him or renouncing him creates more room than keeping his hold on the books.

With the salary cap projected to reach $92 million, giving most teams max cap space, $12 million might allow the Hornets to keep one of Lin, Williams or Jefferson. Maybe. Lin and Williams could probably get more elsewhere, and Jefferson would have an outside chance.

Now, Charlotte would clear more room if Batum and/or Lee walk. But the Hornets have called Batum their top priority, and he sounds like he wants to re-sign. Lee has also proven valuable, and I’d be surprised if there’s not also a major effort to retain him.

Charlotte could clear extra room by trading Spencer Hawes ($6,348,759) and/or Jeremy Lamb ($6,511,628), two players whose salaries will look decent in the new cap environment. But that still might not open enough space to keep two of Lin/Williams/Jefferson if Batum and Lee stay.

Williams, a starter, would probably be the top priority. But he could also probably draw the largest offers elsewhere, so he might price himself out of the Hornets’ range.

Lin holds more value than Jefferson, even as Kemba Walker‘s backup. Jefferson has ceded the starting center spot to Cody Zeller, and Jefferson’s low-post style might not fit Charlotte anymore.

But Lin might have also priced himself out of the Hornets’ range. It’s a thin free-agent class at point guard, and teams that strike out on Mike Conley (and maybe Rajon Rondo) could extend a huge offer to Lin.

He clearly likes it in Charlotte. The question might become: How much of a discount would he take to stay?

Byron Scott says he wants to coach again, should have played his veterans even more

Los Angeles Lakers head coach Byron Scott watches the action against the Oklahoma City Thunder during the first half of an NBA basketball game in Oklahoma City, Saturday, Dec. 19, 2015. (AP Photo/J Pat Carter)
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Deposed Lakers’ coach Byron Scott did a media tour on Thursday — radio interviews up and down the dial, plus speaking to some members of the Los Angeles media.

It was a tour d’ force of all the things that had Lakers’ fans shaking their heads all season long. Take this quote given to Mark Medina of the Los Angeles Daily News.

“If I knew this was coming, I would have played Lou [Williams], Brandon [Bass] and guys like that a whole lot more,” Scott said, referring to his veterans in an interview with this newspaper. “They gave me the best chance to win.”

He didn’t know his job was in danger? That would make one.

Scott was asked to do two contradictory things as Lakers coach: Put Kobe Bryant in the spotlight his final couple seasons while also developing the Lakers’ young talent. That was never going to lead to many wins — and Lakers’ brass understood that.

However, if your team is one of the two worst defensive teams in the league in consecutive years, that’s also not all about the roster. That’s about not getting buy-in from the players and effort to play whatever system he put in place. These Lakers teams didn’t hustle for Scott.

Scott admitted he was old school, but told Rich Eisen on the Rich Eisen Show (hat tip Eye on Basketball) that so is Gregg Popovich, and he’s doing just fine. Which shows a lack of understanding of the nuance with which Popovich works. Unlike the coach with a touch for praise at the right time in San Antonio, Scott’s old-school, tough-love ways turned off the young Lakers — it wasn’t just having them come off the bench, it was what was seen by the young players as a lack of communication as to why. A lack of coaching them up.

But Scott took credit on ESPN’s “The Jump” for the improved play and development of D'Angelo Russell and Julius Randle last season. He said he needed to rein in Russell’s ego and get him to be professional, and he said his plan “worked.” Whether Russell’s development happened because of or in spite of Scott depends on who you ask, but the young potential star’s relationship with his coach was not good. That’s one thing Luke Walton was brought in to change.

Scott said multiple times over the course of the day he wants to coach again. His last two jobs — Cleveland post LeBron and with the Lakers — were about developing young talent and none of those five teams finished better than 12 games under .500. I’d say that would damage future job prospects, but this is the NBA so who knows. He may get another chance in a few years.

Erik Spoelstra starts to lose it on Luol Deng inbounds attempt (VIDEO)

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There were just 20.7 seconds left in overtime and the Miami Heat were down six — they needed a quick bucket.

Luol Deng was inbounding the ball near halfcourt and was looking for a way to get the ball deep down by the basket for a quick bucket — he seemed willing to take a risk rather than make the safe play to a wide open Josh Richardson in the backcourt.

After a couple of seconds of watching this, Heat coach Erik Spoelstra almost loses it on Deng, and the pass goes to Richardson. Enjoy the video.

Toronto hung on and won the game, evening the series at 1-1 headed back to Miami.