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

2 Comments

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).

Devin Booker forces OT with deep turnaround buzzer-beating 3-pointer, but Bucks beat Suns (video)

Leave a comment

I’m not sure who benefited from Devin Booker‘s buzzer-beating, overtime-forcing 3-pointer. The Suns still lost to the Bucks, 113-107. The extra five minutes featured more of the same relatively bad basketball we’d seen between Phoenix (bad) and Milwaukee (shorthanded) through 48 minutes.

But darn if this shot wasn’t really cool and clutch.

Three Things to Know: Angry Russell Westbrook sparks Thunder against Warriors

Associated Press
3 Comments

Every day in the NBA there is a lot to unpack, so every weekday morning throughout the season we will give you the three things you need to know from the last 24 hours in the NBA. As a matter of housekeeping, this will be the last Three Things of this week, as we take a holiday break. Happy Thanksgiving!

1) Angry Russell Westbrook sparks Thunder we’ve been waiting for. Don’t make Russell Westbrook angry. You wouldn’t like him when he’s angry.

Unless you’re a Thunder fan, then you’ll love him. Westbrook came out with an edge we haven’t seen from him this season as he has tried to play nice and integrate Paul George and Carmelo Anthony. Not Wednesday night. Wednesday night Kevin Durant and his Warriors came to town, and Westbrook was not taking it from anyone.

That sparked the Thunder team we have been waiting for all season. Westbrook finished with 34 points, 10 rebounds, 9 assists, and he was joined by Anthony with 22 points, and George with 20 points, 11 rebounds, and 4 steals. The Thunder used a 22-10 first-quarter run to take the lead and never looked back, leading by 26 at one point and going on to win 108-91. This was by far the best the Thunder have looked all season as they have stumbled to a 7-9 start before Wednesday. Maybe this game was the spark they needed to start playing well at the end of games — they closed out well against Golden State. Maybe this was what the Thunder needed to find themselves and become the playoff threat to the Warriors we expected.

As for the Warriors… ¯_(ツ)_/¯. We haven’t said this about them this season (only the Cavaliers), but they looked disinterested much of the night (outside of Durant). Give credit to the Thunder, physical and aggressive defenses that can overplay the Warriors (and recover) give them trouble, and OKC did that. The Warriors just didn’t care to counter. They looked like a team coasting through a road trip (2-2 in their last 4), and when they ran into a quality, motivated team they didn’t have the gear. That doesn’t mean anything long-term, but it means they may be vulnerable during the season until they find their edge again. Whenever they flip the switch.

2) Miami ends Boston’s win streak at 16. For a couple of weeks now the Celtics had been living dangerously — they had to come back from double-digits to win four of their last five games heading into Wednesday night.

Their luck ran out against the Miami Heat.

Miami raced out to a double-digit first-quarter lead, pushed that lead to 19 and were comfortably ahead most of the game, and we kept waiting for the Boston run. It came in the fourth, a 13-0 push that made it a game again. However, Miami responded with a 5-0 run of their own, Dion Waiters seemed especially motivated to take on Kyrie Irving, and the Heat held on for the 104-98 win. Goran Dragic had 27 points, Waiters 26 and 6 assists.

Boston’s streak was bound to end, but they established themselves as a strong defensive team during that run, and the squad in the East best poised to knock off LeBron James and the Cavaliers. We’re a long way from the games that matter in that push — the Cavs have won six in a row, and are playing defense again — but we know the pecking order for who gets a shot at the champs. Boston will get their shot, and early on they look like they will be ready.

3) Patrick Beverley is out for the season and the Los Angeles Clippers have some hard questions to answer. For the first four games of the season, we saw the potential of what this Clipper roster could be — four head-turning wins. Then the injuries started to pile up — Milos Teodosic, Danilo Gallinari, and starting point guard Patrick Beverley — and so did the losses. Nine in a row, until they picked up a road win in Atlanta Wednesday.

Now comes a brutal blow — the Clippers have lost point guard Patrick Beverley for the season. He had microfracture surgery on his knee and will be out until next season.

That’s a real blow to the Clippers, and it means they may need to answer some harsh questions. If the losses continue to pile up and this is clearly not a playoff team by the time we get to Christmas — a reality that became a more possible on Wednesday — do they need to trade free agent to be DeAndre Jordan? Other teams are already calling and asking if he is available in a trade, if the Clippers think they can’t resign him this summer (or at least the odds are lower than they like) they have to consider the move. Los Angeles wouldn’t get a lot back for a rental, but they would get something to help the rebuild they need to consider.

The other question: How much longer is Doc Rivers the coach. The sense from many around the league is the reason he wasn’t let go when he was stripped of his GM powers this summer was he is making more than $10 million a year and had a couple of years left on his deal, and that was too much for even Steve Ballmer to just eat. Plus Rivers has shown he can coach. Whether he can coach this team still is a different question entirely. Right now, this team is not responding to him, and the sense around the league is the question is when, not if, he will be let go.

Kevin Durant and Russell Westbrook go head-to-head, literally (video)

11 Comments

This sure didn’t look like just another game for Kevin Durant – and not only because the Thunder beat the Warriors for the first time since he left.

The 108-91 Oklahoma City victory didn’t look like just another game for Russell Westbrook (34 points, 10 rebounds, nine assists and four steals), either.

Harrison Barnes banks in game-winning, buzzer-beating 3-pointer (video)

1 Comment

With the shot clock off in the fourth quarter and the game tied, Grizzlies big JaMychal Green put back Tyreke Evans‘ miss with a clutch flush. There’s a very fine line between ensuring the last shot and leaving time for an offensive rebound, and Memphis threated it almost perfectly.

Emphasis on “almost.”

The Grizzlies left the Mavericks 0.5 seconds, which Harrison Barnes used to bank in a 3-pointer – off a pinpoint bounce pass by Dennis Smith Jr. – to give Dallas a 95-94 win.