Kevin Johnson to Maloofs: There will be no negotiations during critical Friday meeting

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I wrote on Thursday about the recent developments in the Sacramento Kings arena situation, and namely the Maloofs’ recent actions that amount to a legal full court press designed to land the franchise in Anaheim. The quick and dirty to catch you up is this – the Maloofs, Sacramento, AEG, and the NBA came to an agreement in principle on a $391 million Entertainment and Sports Complex during All Star weekend. A few weeks ago, the Maloofs publicly refused to pay for pre-development costs totaling $3.26 million that were agreed upon during that time. The Maloofs are the only party that disputes that they agreed to the amount, and the dispute has landed at the NBA Board of Governors meeting, which is where we pick up.

The Maloofs pitched at the BOG meeting for about 90 minutes yesterday, and afterwards they disappeared through a side exit not to be found by reporters guarding the various orifices of the St. Regis Hotel in Manhattan.

Dale Kasler of the Sacramento Bee provided this report following the meeting:

In particular, the Maloofs have said they never agreed to contribute $3.26 million toward environmental studies and other “pre-development” costs, as the term sheet says. Spokesman (Harvey) Englander declined to elaborate on the Maloofs’ presentation, other than to say the topic of relocation didn’t come up. “They asked good questions and it was a very good meeting.”

Earlier, Englander said the family would present a “historical analysis of the transaction” to owners, and hoped to have a clear path set toward a deal by the time the meetings end on Friday. Englander said it could take days or weeks, however, to come to a resolution.

On one hand, if you take the statement at face value, it’s encouraging for Kings fans that the topic of relocation didn’t come up.  But the last part about ‘days or weeks’ is where the rub lies, as it reflects the Maloofs’ position that there is still more to discuss about a deal that was already supposed to be done. During this departure from the handshake agreement, the Maloofs’ actions have become increasingly adversarial and this has culminated in Sacramento business leaders asking commissioner David Stern to remove them as owners. From the city-side, nothing is up for grabs, and the parties opposite the Maloofs have stood united in maintaining that the major elements of the deal aren’t going to change.

So what exactly transpired during the closed door session at the BOG meetings on Thursday? We’re still flushing that information out, but David Stern apparently setup a meeting between mayor Kevin Johnson and the embattled family. This was announced mid-day Thursday after the meeting had concluded, by Maloof family spokesman Englander, no less:

“The commissioner said the mayor (Kevin Johnson is) flying out, taking the red eye, (and) suggested we meet with him. And we are,” said Englander.

Questions swirled once the vague itinerary of events was disclosed to the public. What did Stern and the owners tell the Maloofs? Did they tell them to go kick rocks, to take the deal that they had already negotiated? Did they tell the Maloofs that they could indeed try to make a change to the main elements of the deal after the fact? And under what pretenses would Johnson and the Maloofs be meeting?

Clearly, there had to be a plan other than to stick the two parties in a room only to see them storm out 20 minutes later.

After about six hours of radio silence, Kevin Johnson’s office released to PBT a letter they sent to the Maloofs regarding Friday’s meeting. In the letter, Johnson made it entirely clear that he does not plan on negotiating when the sides meet up. Here are selected excerpts and the entire text:

I understand that during today’s NBA Relocation Committee you and your team made a presentation. During the discussion, it was suggested that a meeting with me tomorrow might be beneficial. As has been my commitment throughout this process, I am always happy to meet in the spirit of open communication and partnership. However, in advance of our conversation, I believe it important to make clear several key points:

First, all parties agreed to a deal in Orlando on February 27th, codified in the term sheet subsequently approved by our City Council. At the time, George Maloof explained the Maloof Family’s reason for agreeing to the deal, saying to the Sacramento Bee that it is a “fair deal…worth taking.”

Any representation that a deal was not reached is simply not consistent with the perspective of every other party to the negotiation nor the actual statements of the family.

Second, throughout this process, we have worked closely with the NBA as a valued partner at your request, as documented by the following Kings’ public statements that the “NBA take the lead on this” while remaining “in very close contact with the league” and being “apprised of everything that’s going on.”

Third, and most critically, under no circumstances will the City make material adjustments to the current terms of the deal. Put simply, we have done our part. And there should be no expectation in tomorrow’s conversation that this deal is subject to further negotiation.

We take you at your word that you are committed to Sacramento as you’ve said repeatedly in recent weeks. The best – and only – way to demonstrate that commitment is to honor the “fair deal” as all other parties have done. Your handshake is your handshake. Your promise is your promise.

So let the games begin. The Maloofs’ statement that it could take days or weeks to come to a resolution reeks of haggling over the price of clear coat, and it remains to be seen how much negotiating the NBA is going to actually permit here. For example, negotiating over a small stipulated clause involving little to no dollar value is probably on the up-and-up. On the other hand, should the Maloofs say they want to pay $25 million and not the $73 million they’ve already committed – that would definitely be a non-starter.

Right now, the argument is over $3.26 million in pre-development costs, or one year of Travis Outlaw’s salary. Before the Maloofs’ legal maneuverings started to resemble that of a family that wanted to get out of Dodge, I had surmised that the family’s argument over pre-development costs was really designed to extract a concession down the road.

And now it doesn’t matter if it’s up-front costs or back-end revenues, though, because Johnson is not negotiating. Sources in several different arena camps have made this much clear, and if it wasn’t clear Johnson’s letter was loud and clear. The only real question is – how much juice does Johnson have?

This is one of two things for him. One less settling possibility for Kings fans is that this is Johnson’s line in the sand, a way for him to say to his constituents that he wouldn’t back down. In this case Johnson believes (and he is right) that the city of Sacramento has done enough, and for better or worse he’s going to stand on that principle at least for now. So he draws the line in the sand with the hopes that the odds are in his favor, that the NBA and other owners will recognize that the city has done their part, and not allow the Maloofs to exit stage right.

Then there’s possibility No. 2, which is much more likely in my opinion, and that is that Johnson has already taken his cues from commissioner Stern. He isn’t gambling with the years of work completed by all of the various stakeholders. He isn’t gambling with all of the political capital he has spent on getting an arena deal done. He isn’t gambling with the political capital spent by all of his colleagues and he certainly isn’t putting the entire project on the line with a take-it-or-leave-it demand that isn’t rooted in reality.

In other words he knows that his price is firm, and he’s not buying the clear coat.

We’ll see later Friday who had the juice and for the Maloofs, if the juice of owning an NBA franchise is worth the squeeze.

Paul Allen, long-time owner of Portland Trail Blazers, dies after battle with cancer

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This is a painful loss, not just for the Portland Trail Blazers, but for the NBA.

Paul Allen, who made his money as one of the founders of Microsoft and went on to start Vulcan enterprises, which owns the Trail Blazers as well as the NFL’s Seattle Seahawks, has passed away from his battle with cancer. He was just 65 years old.

“Paul Allen was the ultimate trail blazer – in business, philanthropy and in sports,” NBA Commissioner Adam Silver said. “As one of the longest-tenured owners in the NBA, Paul brought a sense of discovery and vision to every league matter large and small.  He was generous with his time on committee work, and his expertise helped lay the foundation for the league’s growth internationally and our embrace of new technologies.  He was a valued voice who challenged assumptions and conventional wisdom and one we will deeply miss as we start a new season without him.  Our condolences go to his family, friends and the entire Trail Blazers organization.”

Just a couple of weeks ago, Allen had announced his non-Hodgkins lymphoma had returned. It was his third round with the disease, but it was not known that it was already at a life-threatening stage.

After his first battle with the disease, Allen left Microsoft to pursue other interests, which included philanthropy and owning the Trail Blazers and Seahawks. Allen bought the Trail Blazers in 1988 for $70 million from real estate developer Larry Weinberg. Forbes currently estimates the value of the franchise at $1.3 billion.

It is possible this will lead to a sale of the Trail Blazers in not too distant future.

(Do not think this means another owner can swoop in like a vulture and move the team. Aside the fact Commissioner Adam Silver and the league would push back against moving a healthy franchise, the Blazers’ lease at the Moda runs through 2025, with explicit language to keep the team in Portland through 2023 at least.)

Allen’s sister, Ms. Jody Allen, released the following statement:

“Paul’s family and friends were blessed to experience his wit, warmth, his generosity and deep concern. For all the demands on his schedule, there was always time for family and friends. At this time of loss and grief for us – and so many others – we are profoundly grateful for the care and concern he demonstrated every day.”

Our thoughts and condolences go out to Allen’s family and friends.

Larry Nance Jr., Cavaliers reportedly agree to four-year, $45 million contract extension

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Cleveland wanted this to happen, he’s the son of a Cavaliers’ legend who showed last playoffs he can have a role in whatever is next for this team post-LeBron.

Larry Nance Jr. wanted this to happen — he was born in Akron and was raised in the area, Cleveland is where he wants to be.

So as had been expected, the Cavaliers and Nance were able to work out an extension to his rookie contract before the deadline, as reported by Chris Haynes of Yahoo Sports.

Joe Varden of the Athletic said the final numbers were four-years, $44.8 million.

That seems about a fair price. Nance was a steal in the draft by the Lakers 27th back in 2015 and was a fan favorite in L.A., but was sent to Cleveland in the Isaiah Thomas trade. Nance is a quality rotation player on both ends, a guy who averaged 8.7 points per game last season (expect that to go up) and shot 58.1 percent overall (and a 58.5 true shooting percentage, above the league average). He had a PER of 21.5 while with the Cavaliers last season (and a 20.2 PER with a 68.5 true shooting percentage in a smaller playoff role), showing the kind of versatility prized in today’s NBA.

This contract is a win for both sides.

Jodie Meeks set to dodge nearly $600K in suspension penalty with trade from Wizards to Bucks

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Jodie Meeks was set to forfeit $596,686 this season due to his performance-enhancing-drug suspension.

Instead, he could receive his his entire $3,454,500 salary.

Adrian Wojnarowski of ESPN:

The Wizards are in line to save $6,146,794 in luxury tax with this move. Subtract the amount paid to the Bucks, which surely includes at least Meeks’ full salary. But that’s still at least $ 2,692,294 in savings, which is why Washington also sent a draft pick.

Milwaukee was in the right place at the right time – with the Greg Monroe trade exception (from the Eric Bledsoe deal) just large enough to absorb Meeks – to extract an extra draft pick.

But the big winner is Meeks, who can’t serve a suspension while not on a roster and therefore can’t have his pay docked. If he signs again in the NBA, he’d still have to sit 19 games, but his lost salary would almost certainly be based on a minimum salary, not the higher amount he’s due this year.

Report: Pacers, Myles Turner agree to four-year, $80 million extension

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Update: There’s the not unexpected wrinkle:

 

The Pacers’ identification and development of young players stagnated in the Paul George era and might have contributed to his exit. Indiana’s kept first-round picks in the seven years between drafting and trading George: Miles Plumlee, Solomon Hill, Myles Turner, T.J. Leaf.

Turner is the lone hope to emerge as a secondary star, and though now it’d be next Victor Oladipo rather than George, the Pacers will pay Turner as such.

Shams Charania of The Athletic:

That’s a sizable deal, not just in terms of dollars but also opportunity cost. This will unnecessarily cut into Indiana’s cap space next summer.

Turner will begin the offseason counting against the cap at his 2019-20 salary, which based on the reported terms, will be between $17,857,143 and $22,727,273. If the Pacers didn’t extend him and let him become a restricted free agent, they could have held him at $10,230,852, used their other cap space first then exceeded the cap to re-sign him with Bird Rights.

So, why lock him up now? Indiana clearly believes his production will outpace his salary. This prevents another team from signing him to an even larger offer sheet next summer.

The 22-year-old Turner can live up to this deal. He’s a good 3-point shooter and shot-blocker. He must play with more force inside and either improve his foot speed or defensive recognition, ideally both. But he has plenty of tools for a modern center.

That said, if the extension is fully guaranteed, this is too much of a gamble on Turner for me. For sacrificing so much cap flexibility next summer, the Pacers should have gotten more of a discount. Of course, if this deal is heavy on incentives and short on guarantees, that could swing the analysis.