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).

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.

Report: NBA could resume with group stage

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A fundamental conflict for the NBA:

  • The more traditional of a season – all 30 teams playing 82 games, four rounds of best-of-seven series – the league completes, the more more money it will make.
  • The more teams involved in a resumed season, the higher risk of coronavirus spreading throughout the league.

That’s why the NBA is considering a middle ground – resuming without teams far outside playoff position.

But how would the league structure a format for 20 teams?

Maybe a group stage to replace the first round of the playoffs.

Kevin O’Connor of The Ringer:

The 16 current playoff teams would qualify for the group stage, plus the four teams with the next-best records (Trail Blazers, Pelicans, Kings, and Spurs). The remaining 10 teams would be done for the season. The survey sent to each general manager noted that “tiers” would first be created using the regular-season standings to ensure competitive balance between the groups.

Groups could then be randomly drawn, with one team from each tier going into each group. The NBA is working on approaches to fairly balance the groupings, such as limiting each group to only three Western Conference teams, according to multiple front office sources. Drawings for the group stage could be televised, league sources say.

As an alternative to having groups randomly selected, multiple league sources say the league has considered allowing Tier 1 teams—the Bucks, Lakers, Raptors, Clippers—to draft their own groups.

Teams would play opponents within their own groups twice, meaning every team would play eight games. The two teams in each group with the best record would move on.

Based on the current standings, the tiers would be:

  • Tier 1: Bucks, Lakers, Raptors, Clippers
  • Tier 2: Celtics, Nuggets, Jazz, Heat
  • Tier 3: Thunder, Rockets, Pacers, 76ers
  • Tier 4: Mavericks, Grizzlies, Nets, Magic
  • Tier 5: Trail Blazers, Pelicans, Kings, Spurs

As far as ways to resume with 20 teams, this isn’t bad. The draw – whether random or top-team choice – alone would be a revenue-drawing TV event.

The ninth-place (Wizards) and 10th-place (Hornets) teams in the Eastern Conference might argue they should be included over the 11th-place (Kings) and 12th-place (Spurs) teams in the Western Conference. But Sacramento and San Antonio have better records than Washington and Charlotte. If there were ever a time not to stress conference affiliations, it’s now with the league preparing to resume in a single location.

There would be increased risk for top teams getting knocked out early if their group is challenging. They’ve already lost home-court advantage. But there’s also chance of upset in a regular playoff series. Besides, downside could be mitigated by allowing the top teams to draft their groups* and using regular-season record as a tiebreaker.

*This could even be done in reverse – i.e., the top teams selecting which lower-tier teams not to put in their own group.

The Bucks, Lakers, Raptors and Clippers could rotate selecting lower-tier teams to avoid. Once three top-tier teams have nixed a team, that lower-tier team would be placed in the fourth top-tier team’s group. Each group would still be required to have one team from each tier.

Or maybe the top-tier teams could even rotate sticking lower-tier teams into a specific top-tier team’s group. The Bucks could use their first selection on placing the 76ers into the Lakers’ group, for example.

There are many possibilities how to structure a group draft.

If the NBA locks into resuming with 20 teams, the other 10 teams would be incentivized to vote for whatever system generates the most revenue. Those 10 votes could boost any proposal that would otherwise be doomed by teams trying to clear their own path deep into the playoffs.

This system would satisfy players on marginal teams – like Trail Blazers star Damian Lillard – who want to play only if the games are meaningful. It’d also allow the worst teams just to be done.

The draft order and lottery odds would have to be re-considered with a 20-team group phase. Though that’s a minor issue, it’d involve every team. Again, self-interest would creep in.

This idea has some rough precedent. In 1954, the playoffs began with three-team round robins in each the East and West.

The bigger question is how many NBA teams should resume? But if the best answer is 20, this is the best format I’ve seen.

Lakers’ Jeanie Buss talks steps that led to brother Jim’s removal

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Late Lakers’ owner Jerry Buss set up a very detailed trust and succession plan for his beloved franchise. His daughter Jeanie Buss would be the team’s governor, and his son Jim Buss would run basketball operations. If there was an issue, Jeanie had the ultimate power.

In 2017, after the Lakers missed the playoffs for a fifth straight year and were floundering as an organization, Jeanie used that power to oust Jim and bring in a new front office (Magic Johnson and Rob Pelinka, of which only Pelinka remains). Recently, Jeanie appeared on the “Daddy Issues with Joe Buck and Oliver Hudson” podcast and laid out the philosophy behind removing her brother. (Hat tip Lakers Nation)

“When my brother wasn’t going with the way my dad did things, it was a little distressing for me…

“You’re down and losing, and then my brother was changing coaches every 18 months. Sometimes you have to make coaching changes, I get that. But when you go from a coach like Mike Brown, whose emphasis was defense, to a coach like Mike D’Antoni, who really doesn’t worry so much about defense, that’s two different rosters that you need. Then the outside world thinks, ‘They don’t know what direction they’re going in.’

“You should be able to see a pathway as you hire a coach, you give him the players for his style of basketball and you make decisions that follow ones before it. You follow the path and what the person is thinking. But I couldn’t see what was going on, where he was trying to go and what our identity was going to be as a team.”

The path was clearer with Magic and Pelinka because they quickly landed LeBron James as a free agent (how much they had to do with LeBron’s decision is up for debate). The Lakers instantly became a win-now team and, a year later, traded a lot of the young players and picks to put Anthony Davis next to LeBron. The result has been the team with the best record in the West heading into the playoffs (whatever they look like).

Jim Buss swung and missed plenty, but he had a few hits as well. From the outside looking in, the biggest challenge seemed to be he operated with a mindset of “Laker exceptionalism” — that the very best players would always flock to the Lakers because they are the Lakers. The NBA doesn’t work that way anymore. No doubt, the Lakers have advantages few franchises can match. But from Jerry Buss to Jerry West and Mitch Kupchak, all through the Lakers’ successful runs, they didn’t approach things with a mindset of exceptionalism. The Lakers’ front office was bold, but it was grounded and smart — they identified and developed talent, they always had a strong core, and they had strong relationships with players. It wasn’t exceptionalism, it was hard work.

On top of that, Jim had become the scapegoat of Lakers’ fans, the focus of their blame for the years not in the playoffs. Fair or not, it became a public relations issue, not just a management issue.

Jeanie made the right move. And it may even lead to another ring soon.

Damian Lillard: I won’t play if Trail Blazers have no shot at playoffs

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Most players on lottery-bound teams reportedly prefer to be finished rather than return as the NBA attempts to finish its season amid the coronavirus pandemic.

Someone finally put his name behind that sentiment.

Trail Blazers star Damian Lillard, via Chris Haynes of Yahoo Sports:

“If we come back and they’re just like, ‘We’re adding a few games to finish the regular season,’ and they’re throwing us out there for meaningless games and we don’t have a true opportunity to get into the playoffs, I’m going to be with my team because I’m a part of the team. But I’m not going to be participating. I’m telling you that right now. And you can put that [expletive] in there,” Lillard told Yahoo Sports on Tuesday morning via phone.

I do feel like if we do come back and our mind is right, we can beat anyone. It’s going to be hard to get going with no fans, you’ve been off all this time and some people are just ready for summer like, ‘[Expletive] it, I haven’t played in a long time and the season is basically over to me. Do I really care like I cared before?’ It’s going to be a lot of those factors going on and that presents a lot of room for a team to sneak some [expletive]. Like, really mess around and knock some teams off and then, ‘Oh, they’re in the Western Conference finals.’ It’s room for that with this situation. So the fact that it’s possible and we wouldn’t get an opportunity at that, that’s weak to me. I ain’t getting no younger.”

In ninth place, Portland is 3.5 games behind the eighth-place Grizzlies. The Trail Blazers might still have a chance to reach the playoffs. It depends on the NBA’s format for resumption.

There’s consideration to bringing back only teams with a postseason chance, anyway. But there’s also talk of all 30 teams playing in order to fulfill local TV contracts.

Lillard is a tremendous leader. If he doesn’t play, that would cast such a negative feeling onto his Portland teammates – and beyond. Lillard’s voice could affect how the entire league handles its return.

With a super-max extension already signed, Lillard has the luxury of being able to afford risking his paycheck by not playing. Not everyone can do that. There are major complications in determining how much money, if any, non-returning players should earn.

This also gets into an issue even in normal times: There are too many games late in the season involving at least one team incentivized to lose. The Trail Blazers have made the playoffs every season after Lillard’s rookie year. He has never had to worry about this since becoming a star. But players and teams annually grapple with games that, at best, don’t really matter. It creates a horrible product.

The concern is just magnified now because of the heightened risk of playing.

The NBA should listen to Lillard’s apprehension, realize he’s not alone and take it seriously. Then, whenever normal play resumes, the league should also realize this type of situation comes up – admittedly, with lower stakes – every year.