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).

Mark Cuban’s plan for a restart, “I don’t think we can go the old tried and true way”

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Wild, fanciful ideas for restarting the NBA that would never fly in a typical year — 1-16 seeding, or maybe a soccer World Cup-style group stage — are getting an airing this season because everything is on the table. As the NBA moves closer to a restart plan, countless ideas are being floated.

Mavericks owner Mark Cuban has his own plan.

Shocking, I know. But it’s interesting.

“What I proposed is that we extend the playoff format to 10 teams from each conference, and play at least five games prior to going into playoffs,” Cuban said laying out is plan to NBC’s Mike Tirico on “Lunch Talk Live.” And if we do that, every team in the Eastern Conference would have a chance to make the playoffs, and all but two in the Western Conference would do it [Ed. note: Golden State and Minnesota].

“Then, what I would do, once we got 10 and 10, I would reseed them, and 17 would play 20, and 18 would play 19, in a one-game series. The winner then would take on the eighth-place seed in a five-game series, while the No. 1 seed in each conference would get a bye. Then you go ahead normally from there.

“That gives us a chance to have more meaningful games, it gives almost every team a chance when we come back for whatever is left of our regular season. I think we’ve got to change it up some, I don’t think we can go the old tried and true way.”

Cuban later added, speaking to ESPN’s Tim MacMahon, that he wants to see all 30 teams come to Orlando for regular season games, building excitement for the NBA’s return in every market. This dream, however, seems a long shot, and Damian Lillard spoke for a lot of players when he said he’s not playing if there is not a path to the playoffs for Portland.

Cuban’s point that this is the year to try something different, not to play it safe, has real validity. This season is already upside down due to the corona

Cuban’s plan is a long shot, but is it any longer a shot than any of the other ones out there?

 

Wizards’ Bradley Beal: Thunder considered trading James Harden for me on draft day 2012

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The first three picks of the 2012 NBA Draft, which was held in June:

1. New Orleans Hornets (now Pelicans): Anthony Davis

2. Charlotte Bobcats (now Hornets): Michael Kidd-Gilchrist

3. Washington Wizards: Bradley Beal

That August, the Thunder reportedly offered to trade James Harden to Washington for Beal. Washington reportedly rejected the offer due to Harden’s desire for a max contract extension (which Wizards owner Ted Leonsis denied). The Rockets were more than willing to pay Harden, and Oklahoma City dealt him to Houston that October.

Apparently, Washington had a chance to land Harden earlier that offseason.

Beal on “All The Smoke:”

We’re sitting in the draft room. Sure enough, my agent is tapping me. He’s like, “It’s possible you might go to OKC.” I said, “Damn, how am I going to go there? I ain’t even worked out for OKC.” I only worked out for three teams – Washington, Cleveland and Charlotte.

So, the deal was to trade James to Washington, right? OKC gets the third pick. It was either the second or third pick. They were going to trade up to 2 or 3, get me, trade James to Washington.

I would have been in OKC with KD and Russ.

That was a last-minute decision. It was almost done.

I can’t tell whether Beal is also revealing a Harden-to-Charlotte offer or just got mixed up on which teams held the Nos. 2 and 3 picks. Obviously, if Beal was the main prize to the Thunder, they would’ve cared only minimally whether they got him with the No. 2 or No. 3 pick. So, there might have been trade talks with Charlotte, too.

But I’m not convinced Oklahoma City valued Beal that way.

The Thunder were a championship contender. They had just lost in the 2012 NBA Finals to the Heat. Oklahoma City couldn’t have depended on a rookie Beal to contribute on that level.

That’s why – in addition to picks/young player acquired from the Rockets for Harden – the Thunder also got Kevin Martin. The veteran Martin was much better than Beal in 2012-13. (Ironically, the open title window was also a strong argument for just keeping Harden, whatever his contract status).

But the 2012-13 season didn’t go as planned for Oklahoma City. Russell Westbrook got hurt early in the playoffs, and the Thunder lost to the Grizzlies in the second round. Martin left for a lucrative contract with the Timberwolves the following summer.

Even with the long runway Kevin Durant and Westbrook provided, Oklahoma City never got back to the Finals. Beal could have grown into a third star whose shooting complemented the duo. The Thunder might have won a championship with this trade (or, again, just keeping Harden).

The Wizards almost certainly would have won more. Harden has perennially gotten the Rockets to the playoff. (They’ve gone further in years he has had more help.) Beal hasn’t singlehandedly carried Washington like that.

So, this is an interesting “what if?” – if you take it at face value.

Beal’s agent warning him of a trade possibility means something. But we don’t know which other pieces were involved.

The Thunder didn’t trade Harden until just before the rookie-scale-extension deadline, suggesting they wanted to give themselves time to extend him themselves before taking the drastic step of trading him. Would Beal have been enough of a return to give up in June (or even August) on keeping Harden? Maybe. Harden didn’t fully blossom until reaching Houston. But I’m skeptical. At minimum, Harden had already established himself as young and good. Beal was young, promising and under greater team control. There’s significant value in the certainty of a player being at least a near-star, and Harden – not Beal – had that.

Even in hindsight, we’re still revisiting the situation with only limited information.

Report: NBA games could resume in August, not July

Bucks center Brook Lopez and Raptors center Marc Gasol
Steve Russell/Toronto Star via Getty Images
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A week ago, the NBA was looking to resume games in July at Disney World.

Adrian Wojnarowski of ESPN:

In fact, there’s a possibility the first games played in Orlando could be in August, not July, sources said.

It’s good the NBA is being flexible on a start date. The coronavirus presents so much uncertainty.

The league is approaching its most lucrative time – the playoffs. The NBA should make every effort to play the postseason, whenever that can be done safely.

Everyone can figure out next season later, especially because there’s a willingness to delay the start.

Report: Pistons searching for new general manager

Pistons executive Ed Stefanski
Chris Schwegler/NBAE via Getty Images
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The Pistons hired Ed Stefanski as a senior advisor to owner Tom Gores in 2018. Among Stefanski’s duties: Assist in the ongoing search for a new head of basketball operations. But it quickly became clear Stefanski would just run the front office himself.

Now, two years later, Detroit is finally getting around to that general-manager search.

Adrian Wojnarowski of ESPN:

The Detroit Pistons are opening a search to hire a general manager to work with senior advisor Ed Stefanski, sources tell ESPN.

Stefanski will be working with Pistons and Palace Sports Vice Chairman Arn Tellem on the process to hire a GM, sources said.

Rod Beard of The Detroit News:

If Stefanski is still running the front office, a new general manager would be the No. 2 – equivalent to assistant general manager on many teams.

After taking over an inflexible roster left by Stan Van Gundy, Stefanski couldn’t do much. Stefanski’s big move was trading Andre Drummond to the Cavaliers just before the trade deadline. That positioned Detroit to have major cap space next offseason, but it’s unclear how much will actually materialize. The salary cap could drop due to the coronavirus pandemic.

The Pistons must determine whether they’re still building around Blake Griffin, the 31-year-old due $36,810,996 and $38,957,028 the next two years. Last season, he returned to stardom and carried Detroit into the playoffs. This season, he missed most of the year due to injury.

If they’re trying to win now with Griffin, the Pistons are short on quality complementary players. If Detroit is ready to rebuild, its pool of young talent – Luke Kennard, Sekou Doumbouya, Bruce Brown, impending free agent Christian Wood, its own first-round pick – is hardly assured of success.

After years of being stuck on a path charted under the Van Gundy regime, the Pistons can soon pick a new course. This is the time get the front office up to full staffing.