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).

Steve Kerr on Chris Paul: ‘More than anything, I feel bad for Chris’

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Houston Rockets guard Chris Paul didn’t play in Game 6 on Saturday night. The Rockets failed to eliminate the Golden State Warriors, who forced a Game 7 with a 115-86 win in Oakland.

Paul’s status for Game 7 is still unclear, although things aren’t looking good. Paul’s hamstring injury will be hard to heal in such a short amount of time, even with round the clock treatment and the power of will the veteran point guard brings to the table.

The Point God has a tendency to get hurt at just the wrong time. Paul famously broke his hand in April of 2016, and along with Blake Griffin‘s quad injury, allowed the Portland Trail Blazers to get the better of the Los Angeles Clippers in the playoffs that year. Paul also missed two games against the Rockets in the playoffs with a sore hamstring in 2015, a series the Clippers and Paul lost in seven games.

The NBA is not blind to Paul’s bad luck, either. Opposing head coach Steve Kerr commented on it to reporters, outlining not only what he thought they might do rotationally but his feelings about Paul’s injury history.

Via ESPN:

“More than anything, I feel bad for Chris,” Kerr said before the Warriors’ 115-86 rout of the Rockets at Oracle Arena. “The guy’s a phenomenal player and competitor and pretty much willed his team the last two games. He’s just been haunted by these types of injuries in his career, and it’s a shame. I hate when anybody gets hurt.”

Kerr mentioned that he knew the reality of the situation is that by the end of the season, not everyone is going to be healthy. No doubt it’s a good thing for Kerr and the Warriors that Paul will likely miss Game 7. It’s unfortunate for a veteran like Paul, whose stellar career is dogged by unfair narratives of playoff failures.

Maybe Houston can try again next year when they have LeBron James?

Rockets doctors to evaluate Chris Paul Sunday then make Game 7 call

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Officially, Chris Paul is questionable for Monday’s Game 7 against Golden State.

Mike D’Antoni said the call on whether he can play will be made by team doctors on Sunday.

“The team doctors will check him out tomorrow morning and see how far he’s got (in his rehab) and what the possibilities are,” the Rockets’ coach said, adding that the doctors will make the call, not him.

Sources suggest there is pessimism about if Paul can play around the team, but with his competitive nature nobody wants to rule it out. Nobody is quite sure where things stand.

“I don’t think he’s tested it at all, so he’s just getting treatment and trying to make sure it calms down and everything,” D’Antoni said. “And I would think our doctors and trainers are working on him 24 hours a day almost, and they will tomorrow morning re-evaluate it again.

“If I get a nod from Chris and the doctors he’s good to go. Probably if any of those disagree he’s probably not going. I think it’s a game-time decision.”

The Rockets got off to a fast start without Paul in Game 6, led by Eric Gordon raining threes. However, the Rockets missed Paul’s defense and steadying influence when he has the ball as things started to go sideways in the second half — the tempo got up, the Rockets missed shots and turned the ball over, and Stephen Curry and Klay Thompson got hot. Paul may well have not been able to stop this run, but the Rockets would have had a better chance with him.

Without him, even with the Rockets at home, Vegas opened the Warriors as five-point favorites.

 

Friends raise more than $20,000 for LGBTQ youth to honor memory of Bo Churney

via @byjanehammond on Twitter
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The name Bo Churney might sound familiar to you if you’re a member of NBA Twitter. A leading online voice around the Atlanta Hawks and a former writer for various outlets — including ESPN, Turner Sports, and Hardwood Paroxysm — Churney sadly took his own life last week.

The outpouring around Churney’s untimely passing has been significant. After his death, friends of Churney quickly decided to organize a fundraiser in his name, and in less than a week had $20,000 in donations from the online community.

The fundraiser will donate the money to Lost N Found Youth, an organization that helps at-risk LGBTQ youth in the Atlanta area. Churney had come out of the closet a few years before his death.

Via EverydayHero:

A lot of people have reached out asking if there’s anything they can do or help with after the death of our dear friend Bo Churney. We wanted to do something in memory of Bo in the Atlanta community that he loved and helped make a better, more fun place. Lost N Found Youth is an organization that provides outreach, crisis support, services, clothes, food, and safe shelter for homeless and at-risk LGBTQ youth between 13-25 in the Atlanta area. Anything you can give would be tremendous or even sharing and spreading the word. Thank you.

As of writing there have been 473 donations in Churney’s memory, with people leaving messages and sums large and small. Churney’s impact was vast, and the fundraiser has been mentioned everywhere around NBA media including TV, newsletters, and articles like this one.

You can click the links above to donate to the Bo Churney Memorial Fund or directly to Lost N Found Youth.

If you need to speak to someone, contact the Suicide Prevention Lifeline here.

Report: Mavericks employee looked at porn at work, created hostile environment

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The Dallas Mavericks were at the center of a Sports Illustrated investigation into their alleged corporate culture of that included an “Animal House” atmosphere, including sexual harassment.

The blowback from the report and subsequent investigations was severe, with former Mavericks CEO Terdema Ussery and former Mavs.com reporter Earl K. Sneed at the center of the story in Dallas.

Now a report from the Dallas Morning News says another employee was known for creating a hostile work environment in the ticketing office. That employee, Chris Hyde, was a senior account executive in charge of selling tickets for the team. According to the report from the Morning News, Hyde continually showed explicit photos to co-workers, rubbed himself while at work, and did so even after being warned to stop by Mavericks owner Mark Cuban.

Via Dallas Morning News:

His co-workers called him “Pants DJ.” He would sit at his desk in the Dallas Mavericks ticket sales office, stare at pornographic images on his cellphone or computer and rub himself below his belt line.

He’d often call co-workers over to show them pictures on his phone that he’d taken of women in lingerie, topless or naked. He once dropped a used condom onto the office floor.

This pattern of behavior, described by seven current and former Mavericks employees who spoke to The Dallas Morning News on the condition of anonymity, continued for six years despite a warning from owner Mark Cuban that he stop viewing pornography on his office computer.

Hyde worked for the Mavericks for 15 years, leaving the team in 2014. According to the Morning News sources, Hyde was not let go for his workplace behavior, and apparently was one the team’s top salesmen.

Read the full report in detail, as it gives even more insight into what has allegedly been going on inside the Mavericks organization for some time.

Cuban has said that he is open to any kind of cooperation he and the team need to have as an investigation into their corporate culture is ongoing. Meanwhile, Dallas has hired several HR executives as a means to turn things around in the front office.