ProposedKingsArena

Sacramento Kings arena funding plan to be released Sept. 8

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We don’t know the specifics of how the city of Sacramento plans to pay for the proposed $387 million Entertainment and Sports Complex (ESC), but we do know when they plan to announce those plans.

According to Ryan Lillis of the Sacramento Bee, a menu of funding options will be presented to the public on September 8, with a more detailed report being released on September 13 to both the public and City Council.

According to Lillis:

While precise details of the financing plan are still unknown, Chris Lehane, the chair of the task force, said in a new release this morning that it will include “contributions from both the public and private sectors, including the Kings ownership group, arena developers and operators.”

He also added:

It’s also expected that an arena operator – a company such as AEG – will be approached to help with the construction costs.

While the city of Sacramento’s efforts to keep the Kings have appeared at times to be as desperate as a 55-foot game-winner, the framework for the proposed funding options has been a relative constant, and has always been envisioned to be a mix of private and public funds.

Hotel and airport taxes have been discussed, but more recently the pencil has been sharpened to include user fees such as ticket surcharges and parking fees, in addition to the sale of city-owned properties, corporate sponsorships, and revenues originating from cell phone towers and electronic billboards placed on the ESC.

In short, every dollar will count as they tally up the funds, and the inclusion of a company like AEG to both fund the project and operate the arena sounds like a must at this point. That their name continues to come up in on-the-record and off-the-record discussion is a great sign for Kings fans.

And as we posted in June, the Maloofs liquidated most of their interest in the Palms to enhance their financial flexibility. While they could have done that simply to free up money for their continued involvement in the Palms, as George Maloof said was the case at the time, it stands to reason that being relieved on a $400 million note will help them be able to pitch in.

So where does the rubber meet the road here?

First, the Think Big Sacramento coalition, which includes 70-some odd politicians, businesses, community leaders, and the original grassroots leaders such as Carmichael Dave and Here We Stay — they will need to procure support within the Sacramento City Council, and then also have enough public support to marginalize attacks from any opposition groups. Attacks could come in the form of lawsuits seeking injunctive relief, most likely on the grounds that the use of public funds will require a public vote. The Kings arena effort would likely come up short if a vote is needed, so avoiding such a challenge will depend on the exact nature of the public funds being used and the appetite for opposition groups to go through a costly legal and political fight.

A lot of that appetite will be derived from what the folks in the Sacramento region actually think about this public subsidy. Losing the Kings will necessarily be a blow to the area, and most believe they will not be able to get an NBA team back should they lose this one. In the battle to attract businesses and the new-age worker that values a city’s identity, this could be a defining moment for the entire region.

And that is where the battle for public opinion is taking place. The Think Big Sacramento group is doing a commendable public relations job, with interactive campaigns targeting not just Kings fans, but folks that may be more inclined to see Disney on Ice than five shooting guards and one basketball. Between the town hall meetings, the dominant social media work they’re doing, and local events featuring non-basketball types such as world-renowned artist David Garibaldi (seriously, check out his work) – it’s safe to say that they’re not making the mistakes of the ill-fated arena tax campaign from 2006 that was easily rejected by the voters.

But as with anything else, you have to follow the money, as public funds come with questions about tax allocations, economics, and the like. Today, I spoke with leading sports economist Brad Humphreys (and expert witness in the Sonics vs. Seattle case no less), who has been outspoken about the problems with sports stadium subsidies (as are most of his colleagues), and the takeaway is that this isn’t just a Sacramento issue – it’s a United States issue.

Due to the artificial lack of supply (teams) in the major sports leagues, a De facto monopoly, teams have the leverage to demand public subsidies. If the city of Sacramento wants to belabor the point, the Kings will have a new address in Orange County – and that scenario has played itself out a number of times.

I’ll be scratching together another post about my conversation with this economist, which covered everything from sports subsidies to the Kings to the lockout. Interestingly, he said he wasn’t against the Kings’ arena subsidy, and in one (not yet peer-reviewed) white paper he wrote,

A new state of the art facility integrated in a comprehensive urban redevelopment program and located in the heart of a large city might be expected to generate increases in residential property values in the vicinity of hundreds of millions of dollars within a mile of the facility, if the location, planning, construction, and development are carried out carefully.

While most economists are mostly aligned in saying that no empirical evidence has been found to show that the presence of sports teams and so-called big sporting events (i.e. the Super Bowl) actually bring in additional tax revenue, let alone to cover the cost of the subsidy — it doesn’t mean that the proof doesn’t exist.

Sacramento County had a $40 million reduction in budgetary revenue this year due to the drop in property values in the area, which is money that they’re not getting back. That loss of revenue comes from the fact that people aren’t willing to pay as much to live in the Sacramento region.

So assuming, annually, the county gets the 1% property tax revenue on a theoretical ‘hundreds of millions of dollars (of increased property value) within a mile of the facility,’ this unexplored area of sports economics could answer the question as to why cities continue to ignore economists’ clamoring. While people may spend their entertainment dollars elsewhere (the substitution effect) if the Kings are not in town, they won’t necessarily pay as much to live there. The intangible benefits of living by your favorite sports team or having the option to go to an A-list show – those benefits may be being capitalized in ways economists have yet to find (or in this case, may be on the precipice of finding).

Humphreys took great care to point out that the case of Sacramento is unique, and that cities with downtown revitalization projects have had both success and failure. But in the world of data that economists live by, one thing is clear – they’re simply not ready to buy the economic impact reports that teams are selling, but they’re also not ready to rule out that the sports subsidy could be a good thing.

After all, everybody is doing it.

Ticket prices for Thunder/Warriors Game 7 like Finals; someone paid $29,000 per courtside seat

OAKLAND, CA - MAY 18:  A fan waits in the stands prior to game two of the Western Conference Finals during the 2016 NBA Playoffs at ORACLE Arena on May 18, 2016 in Oakland, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Christian Petersen/Getty Images)
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If you want to see Game 7 at Oracle Arena Monday night, hopefully you just sold your tech startup for a lot of cash. Or you run a hedge fund.

Just how hot a ticket is Game 7 between the Oklahoma City Thunder visit the Golden State Warriors? These are hotter than recent NBA Finals tickets. The only game recently selling for more was Kobe Bryant‘s final game at Staples Center.

At secondary ticket seller StubHub, the cheapest tickets start $360 per seat — that’s for behind the basket at the top of the arena. Lower bowl behind the baskets is more like $850-$900 per seat, and if you want good seats near the floor the price is north of $5,000 per seat. Seatgeek.com

Over at Seatgeek.com the prices are in the same ballpark, if you want to be in the lower bowl on the side of the court the seats start at $2,300 and climb quickly.

The Warriors’ official ticket resale site is run by Ticketmaster — the idea is for the Warriors have more control over the secondary ticket market for their games, something StubHub sued over and is appealing a lower court decision to dismiss the case — had an even bigger sale, according to Darren Rovell of ESPN.

The Warriors put the few remaining tickets on sale Sunday night, with prices ranging from $230 to $2,150. They sold out in less than five minutes.

Those prices did not include any floor seats, which were sold out. But someone did go to the Warriors’ resale site, run by Ticketmaster, and purchased two floor seats for $29,000 each.

TNT will broadcast the game for free (well, free if you have cable), and they will do monster numbers. Game 6 on Saturday night averaged 10.8 million viewers, the most of any playoff game this season, and this should crush that number.

 

Report: P.J. Carlesimo not joining Sixers staff despite mutual interest

CHICAGO, IL - MAY 02:  Head coach P.J. Carlesimo of the Brooklyn Nets watches as his team take on the Chicago Bulls in Game Six of the Eastern Conference Quarterfinals during the 2013 NBA Playoffs at the United Center on May 2, 2013 in Chicago, Illinois. The Nets defeated the Bulls 95-92. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Jonathan Daniel/Getty Images)
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This week, the Rockets hired Mike D’Antoni as their new head coach, opening up a spot for a lead assistant on Brett Brown’s bench in Philadelphia. Reports indicated that veteran coach P.J. Carlesimo was the frontrunner for the job, but ESPN.com’s Marc Stein reports that that isn’t happening.

So the Sixers’ search continues, and one would have to imagine that the Colangelos will be looking for a veteran, only fueling speculation that they aren’t quite sold on Brown long-term. It’s worth keeping an eye on the situation.

Warriors know Game 7 back home for Finals trip won’t be easy

OKLAHOMA CITY, OK - MAY 22:  Stephen Curry #30 and Klay Thompson #11 of the Golden State Warriors react in the second quarter against the Oklahoma City Thunder in game three of the Western Conference Finals during the 2016 NBA Playoffs at Chesapeake Energy Arena on May 22, 2016 in Oklahoma City, Oklahoma. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Ronald Martinez/Getty Images)
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OAKLAND, Calif. (AP) After a record 73 wins and a memorable Game 6 comeback on the road, the Golden State Warriors’ goal of getting back to the NBA Finals and defending their title comes down to Game 7 at home against the powerful Oklahoma City Thunder.

All along, the Warriors have said the numerous team milestones and personal accomplishments they set during this special season won’t matter a bit unless they repeat as champions.

They need one more victory to become the 10th team to rally from a 3-1 postseason deficit.

“I’ve learned that our players are tough, they’re mentally tough,” Coach of the Year Steve Kerr said Sunday, when his team took a day off from film and practice. “I don’t know if I really learned that. I already knew that. But they’ve firmly confirmed that. It’s been a great comeback. Now we still have to play. We still have another game.”

Kerr just wanted his Warriors to grab back some momentum from Kevin Durant and the Thunder. Now, they have it, all right, heading into the decisive game of the Western Conference finals Monday night after winning two straight.

When his team won Game 5 on Thursday night, MVP Stephen Curry hollered “We ain’t going home!” – and Golden State wants no part of the Thunder having the last say in the Warriors’ summer plans.

“We got a big one last night to stay alive, and now we’ve got some momentum. But it can work in reverse,” Kerr said. “One game changes everything, and we’ve got to come out and play our game and play well to finish the series out.”

Golden State hardly considers this a gimmee just because the team is playing at deafening Oracle Arena, where the Warriors have lost just three times this season. They have had their problems against Durant, Russell Westbrook and the towering Thunder.

Oklahoma City is fueled by trying to reach its first NBA Finals since losing to LeBron James and the Miami Heat in 2012. James and Cleveland are waiting on Monday’s winner.

“It’s going to be a hard game. If we thought tonight was hard, Game 7’s going to be even tougher,” Curry said. “Everybody on both sides of the ball is going to leave it all out on the floor. It’s win or go home. So we can’t expect just because we’re at home that we can just show up and win.”

As has been the case all playoffs with Curry ailing, Golden State got a huge performance from Klay Thompson. He made a playoff-record 11 3-pointers and scored 41 points in a 108-101 win at Oklahoma City on Saturday night, and will need an encore Monday.

“Lot of people probably counted us out,” Thompson said.

Kerr said last week that his group might be different than the all the other teams that have tried to come back from 3-1 down: because the Warriors won it all last year.

The Thunder certainly would have preferred to close out the series at home over traveling back across the country to the Bay Area for the deciding game.

Yet they never expected it to be easy against the 2015 champs.

“This is what you dream about, getting this opportunity. We’ve got to take advantage of it,” Durant said Sunday. “Go up into their building, and it’s going to be great atmosphere. … No matter where you play, you’ve still got to play. That’s how we look at it.”

That’s partly because first-year Thunder coach Billy Donovan has talked to his team about the mentality it takes to win in a hostile venue like raucous, sold-out Oracle Arena, and Oklahoma City came in and did it in Game 1.

“We lost Game 6, and it was a tough, hard-fought game,” Donovan said. “We’re disappointed about not having a different outcome. But we haven’t lost the series, and we have an opportunity again. I think just being around these guys, they’re a resilient group.”

Curry and the Warriors expect another entertaining, great game.

From an ankle injury that sidelined him in the first round against Houston to a sprained right knee and puffy elbow, Curry has dealt with his share of pain this postseason. He has to push that aside for what he hopes is one more game this series and then a second straight trip to the Finals and another championship.

“I actually kind of like it, because you understand the moment of the playoffs and just kind of gets you going,” he said. “I’ll be ready to go and give it everything I’ve got for Game 7.”

Adam Silver on integrity of NBA: ‘It’s the most sensitive issue for me’

LOS ANGELES, CA - MARCH 22:  Adam Silver, commissioner of the National Basketball Association announces that the 2018 NBA All-Star game will be held in Los Angeles at Staples Center during a press conference at Staples Center on March 22, 2016 in Los Angeles, California.  (Photo by Sean M. Haffey/Getty Images)
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The NBA’s decision not to suspend Draymond Green for his kick to the groin of Steven Adams in Game 3 of the Western Conference Finals was a controversial one. The league reviewed video evidence and interviewed people involved and determined the kick was not intentional, but upgraded it from a Flagrant 1 to a Flagrant 2, giving Green enough flagrant foul points that his next flagrant foul of any kind will result in a suspension.

The lack of a suspension in this case, though, led to questioning from fans about the NBA’s motivations, something commissioner Adam Silver acknowledged on Sunday in an ESPN radio interview. Silver took exception to the idea lobbed at the league by some fans that they would prefer the Warriors to advance to the Finals over the Thunder, and reiterated (rightly) that that isn’t a motivation for the NBA.

Here’s a transcription of Silver’s comments, via the Bay Area News Group:

Silver acknowledged he has heard the conspiracy theory that the league prefers Golden State reach the Finals instead of Oklahoma City.

“I hear it, and it’s the most sensitive issue for me, and it goes to the core integrity of the league and frankly to my integrity,” Silver said.

“Even from a business standpoint, it would be impossible to predict which Finals would have a greater following. It depends on how many games, how close the games are. I can only thus sort of swear to the world that we do the best we can and that we don’t prefer one market or one team over another.”

The truth is, as popular as the Warriors are, there’s no bad matchup here for the league in terms of ratings. If the Warriors win on Monday, the Finals will be a rematch of last year as Golden State tries to cap off their record-setting regular season with a second straight title against a version of the Cavs with Kevin Love and Kyrie Irving healthy, unlike last season. If the Thunder win, the league gets a second Finals duel between LeBron James and Kevin Durant, which hasn’t happened since 2012, when James was in Miami. The Warriors play in a bigger market than the Thunder, but market size doesn’t matter nearly as much as it used to. James and Durant do just fine, popularity-wise, playing in the 18th and 43rd largest media markets in the United States, respectively. A lot of people are going to watch the Finals no matter which team wins the Western Conference Finals. And Silver knows that.