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).

Stephen Curry, Danilo Gallinari trade halfcourt buzzer-beaters (video)

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Warriors star Stephen Curry drained a halfcourt shot to end the first quarter. Not to be outdone, Clippers forward Danilo Gallinari hit a halfcourt shot to end the second quarter.

I’m just marveling how much less of a heave Curry’s shot was, even if it was slightly closer. His range is incredible.

Golden State won, 134-127, behind 44 points from Curry.

Report: Markelle Fultz, Kyle Kuzma among NBA players who received agency money while in school

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Details are emerging in the FBI’s probe into college basketball – specifically how former NBA agent Andy Miller distributed money (through college coaches) to players, i.e., potential clients.

Pat Forde and Pete Thamel of Yahoo Sports:

An ASM balance sheet in the hands of federal investigators shows accounts through Dec. 31, 2015, with the subheading, “Loan to Players.” It listed several who were in high school or college as receiving four-figure and five-figure payments from ASM Sports. Among the largest listed loans:

  • Dennis Smith, who would go on to play at North Carolina State in 2016-17, received $43,500 according to the documents. Another document headed “Pina,” for ASM agent Stephen Pina, says Smith received a total of $73,500 in loans, and includes notes about “options to recoup the money” when Smith did not sign with ASM.
  • Isaiah Whitehead, at the time a freshman at Seton Hall, received $26,136 according to the documents. The “Pina” document says Whitehead received $37,657 and was “setting up payment plan.” Whitehead signed with ASM but later left the agency for Roc Nation.
  • Tim Quarterman, at the time a junior at LSU, received at least $16,000 according to the balance sheet.
  • Diamond Stone, at the time a freshman at Maryland, received $14,303 according to the documents.
  • A listing that refers to “BAM” for $12,000 is later identified in the documents as Edrice “Bam” Adebayo, who would go on to play at Kentucky in 2016-17. He did not sign with ASM. There’s a later reference to Adebayo that says he received $36,500. “Bad loan,” reads the document.
  • Markelle Fultz, who would go on to play at Washington and become the No. 1 pick in the 2017 draft, received $10,000 according to the documents. He did not sign with ASM.

Former Utah star Kyle Kuzma received at least $9,500 while in school, according to the documents.

Former Wichita State player Fred VanVleet. Documents show he received at least $1,000.

Apples Jones, the mother of former Kansas player Josh Jackson, received $2,700 according to documents.

Images attached to the article also show more NBA players, dating quite far back.

My simple reaction: Good for these players. They have a marketable skill, and they deserved to be compensated by the open market for it. It’s a shame the NCAA’s cartel system prevented that.

As Kevin Pelton of ESPN put so well:

Big nights for Ben Simmons (32 points), Joel Embiid good sign for Sixers

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It was a dramatic win — because Philadelphia’s two best players stepped up.

Down one with eight seconds left and Chicago having the ball, Joel Embiid forced a turnover, Ben Simmons scooped up the ball and was fouled, then drained a pair of free throws with 5.6 seconds to play and the Sixers got their sixth straight victory, 116-115.

It wasn’t just that play. Simmons had a career-high 32 points, along with 11 assists and eight rebounds, while Joel Embiid had 30 points and 13 rebounds. Coach Brett Brown said after the game the pair carried Philly on the night — and the Sixers are going to need more of that to end their playoff drought.

Check out their highlights above.

Three Things to Know: Russell Westbrook was clutch; Curry was vintage Curry

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The NBA is back, and every day around the league 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.

1) Russell Westbrook rescues Thunder with game-winner vs. Kings. It wasn’t just averaging a triple-double for a season, when it came time to vote for MVP last season one of the reasons Russell Westbrook came out on top was how clutch he had been. He hadn’t just willed his team into games they probably should have lost, he got them the wins — in the final three minutes of games within three points last season (something that happened 32 times for the Thunder), Westbrook averaged 4.4 points scored (best in the NBA of anyone who played in more than five such games) and shot 38.7 percent from three.

That Westbrook was back on Thursday. With the game tied 107-107 and one second left, the Thunder ran an out-of-bounds play where Westbrook got surprisingly open coming off a double screen and had room for a clean look catch-and-shoot three. Do we need to tell you what happened?

OKC needs the wins for playoff seeding through its final 22 games — the Thunder are now just 1.5 games out of being the three seed in the West, or 2.5 games away from falling out of the playoffs entirely. The West is that bunched up. They should make the playoffs (fivethirtyeight.com gives them an 89 percent chance of being in) but where they fall will determine how tough a run through the playoffs they will face.

2) Stephen Curry was hitting Stephen Curry shots, drops 44 on Clippers. If Stephen Curry’s shot chart looks like this, it’s going to be a long night for the opposition.

Curry had 44 points on 19 shots and just could not seem to miss, even nailing a buzzer-beater from the center-court logo.

Credit the Clippers here, who put up points (22 from Tobias Harris) and made this a contest, falling 134-127. Los Angeles is fighting for a spot in the playoffs (they are currently one game back of New Orleans for the eight spot) and have found ways all season despite a rash of injuries and Blake Griffin being traded. They should be appreciated for their play this season. There’s just not much you can do when Curry and the Warriors are going off.

3) New look Cavaliers suffer first loss, fall to Wizards. The newfound energy was there in Cleveland. LeBron James was playing at an MVP level. The versatility of the new-look Cavaliers roster was on full display.

Cleveland just couldn’t shoot Thursday night. To be more specific, Cavaliers not named LeBron James (32 points on 18 shots) couldn’t buy a bucket. Cleveland was 8-of-35 from three and in the final nine minutes of the game the non-LeBrons were 0-of-10 shooting. The Wizards went small and were +17 with that lineup as the Cavs had no answers (the lineup was Bradley Beal, Tomas Satoransky, Otto Porter, Kelly Oubre, Markieff Morris). The Wizards got the win 110-103.

Cleveland can chalk this up to an off night, and it was. It was also a reminder of why this Cleveland team isn’t as good as a year ago — they don’t have a reliable second shot creator and scorer who can just get buckets and lift the team up. Kyrie Irving is an elite scorer, but he’s in Boston. George Hill, Jordan Clarkson and the new guys are not on that level. Some nights that will be an issue.

The Wizards are now 8-2 since John Wall went down and are scoring 4.2 points per 100 possessions above their season average in that stretch. The ball is moving and the players are moving off it, Beal has been brilliant, Satoransky has stepped up, and the Wizards are securing their spot in the top half of the East. When Wall returns he has to figure out how to fit in with this offensive style, not come in and dominate it with the ball in his hands.

The Wizards need more wins like this as they enter a tough stretch of their schedule (14 of the next 16 are against teams currently in the playoffs).