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.

Deandre Ayton misses coronavirus test, arrives late to underway Suns-Thunder game

Suns center Deandre Ayton
Kevin C. Cox/Getty Images
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Another testing issue for Deandre Ayton.

This one comes at a terrible time for the Suns.

Phoenix is trying to complete a longshot run to the playoffs and playing the Thunder in a key game today. But Ayton arrived late to the arena after missing a coronavirus test yesterday.

Shams Charania of The Athletic:

Like many Suns, Ayton has played well in the resumption. Phoenix doesn’t have another big-man option like him, especially with Aron Baynes sidelined. The Suns started Dario Saric in a small lineup today.

Ayton arrived to the arena and is warming up on an exercise bike. He could still get into the game and make a difference.

Already locked into the 4-6 range in the Western Conference and perhaps trying to keep its top-20-protected first-round pick, Oklahoma City is playing without Shai Gilgeous-Alexander, Danilo Gallinari, Steven Adams, Nerlens Noel and Dennis Schroder. None of those will players will make a late entrance into the game.

Also: It’s ridiculous this wasn’t publicly disclosed sooner. The NBA continues to tout transparency while trying to draw more gambling revenue. Yet, a major lineup issue like this remains secret? That opens the door for some bettors to get inside information, which would be so damaging to the league’s integrity.

Kings now sole owners of second-longest playoff drought in NBA history

Sacramento Kings
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The Kings’ 2018-19 season ended with optimism.

Facing a meager over/under of 25.5 wins, Sacramento surged to 39 wins – its best record in 13 years. Under Dave Joerger, the Kings played a fast and fun style. De'Aaron Fox made historic improvements. Buddy Hield broke out. Several other young players showed promise.

Sure, the Kings missed the playoffs for a 13th straight season – matching the second-longest playoff drought in NBA history. But they were on track to end the skid soon enough.

Except, of course that’s not how it went in Sacramento.

The Kings were eliminated from the postseason chase yesterday, ensuring a 14th straight season outside the playoffs. That alone is now NBA’s the second-longest-ever postseason drought, breaking a tie with the Timberwolves (2005-17). Only the Buffalo Braves/San Diego/Los Angeles Clippers’ 15-year non-playoff streak (1977-91) is longer.

Here are the longest postseason droughts in NBA history:

The Suns could still reach 10 straight years outside the playoffs, but they’re still in the race this season.

The Kings might not be far from climbing this list, either.

Their future looks far bleaker than a year ago. Sacramento fired Joerger to hire Luke Walton, who has underwhelmed. Buddy Hield signed a lucrative contract extension then had a rough season. Fox progressed, though he didn’t make the desired leap into stardom. Other young players had ups and downs. Luka Doncic casts an even larger shadow from Dallas. The Kings’ organizational turmoil continues.

This was a feel-bad season in Sacramento, anyway. All the preceding losing only adds to the misery.

The Kings enter next season with one last chance to avoid the longest playoff drought in NBA history, and they do have a chance. But there’s only pessimism now.

Damian Lillard throws pass away from basket, off Tobias Harris, into hoop (video)

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Damian Lillard was making everything yesterday.

EVERYTHING.

Lillard, who scored 51 points in the Trail Blazers’ win over the 76ers, even got a bucket on this wild pass off Tobias Harris.

Sometimes, it’s better to be lucky than good. It’s even better to be both.

LeBron James admits he’s still adjusting to playing without fans

LeBron James
Jesse D. Garrabrant/NBAE via Getty Images
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LeBron James has played to overflowing gyms and arenas since he was a sophomore in high school. There is always a crowd around him to watch him play. Or a massive crowd of reporters around him after the game. Or throngs of fans when he travels through China on a shoe tour. LeBron has always packed the house.

Until now. There are no crowds, no fans at the NBA’s restart at the Walt Disney World Resort in Orlando. It’s now games in a stripped-down, made-for-television gym. And LeBron admitted to reporters after the latest Lakers’ loss he is still adjusting. Via Mark Medina of the USA Today.

“I am getting more and more used to being out there. It’s a very weird dynamic. I haven’t played in an empty gym in a very, very long time,” James said following the Lakers’ 116-111 loss to the Indiana Pacers on Saturday. “It’s been a very long time since no one has been watching me play the game. I’m just trying to find that rhythm and lock in…

“I’m getting more and more comfortable playing in an empty gym,” James said. “Just having the backdrop here is a lot different from playing in a high school gym or a college arena where you’re playing in the summer time, whatever the case may be. It’s very dark, extremely dark. You can literally hear a feather hit the ground. I’m just getting more and more comfortable playing with my game here in the bubble.”

LeBron has still been very good in the bubble — 21.6 points, 9.6 rebounds, 6.4 assists a game — but he has not been quite the otherworldly, MVP candidate level player he was before the shutdown. His true shooting percentage of 51.9 at the restart is down from 57.7 before the break (and it has been below the league average since the restart). The Laker offense overall has scored less than a point per possession in the bubble and has been the worst offense in Orlando (leading to a 2-4 record so far). It’s not all LeBron, the Lakers as a team have struggled to get their pre-hiatus traction back, the chemistry is not quite right. But we know who leads this team.

LeBron and company also know they need to find that rhythm soon. They will enter the playoffs as the No. 1 seed and face and eight seed — likely Portland or Memphis — that had to battle its way into the postseason. That team, whoever it is, will come in battle-tested and motivated.

The fans will not be there to pick up LeBron and the Lakers.

“I definitely love playing in front of the fans. The fans are what make the game,” James said. “Without the fans, I wouldn’t be who I am today. To all the fans out there that come watch me play, I miss you guys and hopefully someday I can get back to that interaction.”

Someday we all hope for that.

In the short term, LeBron and the Lakers need to find their groove in a fanless world.