Have the Maloofs threatened the NBA’s billion dollar arena subsidy industry?

15 Comments

What do Faye Vincent, George Steinbrenner, and David Stern have in common?

They’re each relevant characters in the relocation saga of the Maloof family, owners of the Sacramento Kings, who are increasingly becoming a liability for the NBA.

That’s because Chris Lehane, executive director of arena group Think Big Sacramento and big-time political consultant to be played by Rob Lowe in the upcoming film Knife Fight – mashed those characters together when he sent a scathing letter to U.S. Attorney General Eric Holder on Monday. In that letter, he described the Maloofs’ harassment of at least one Sacramento business owner using an ex-FBI agent and asks for a federal investigation into the matter.

On Friday night, CBS13, the local CBS News affiliate, reported that the Maloof Family is employing a former FBI Agent whose purported activities appear designed to intimidate citizens of the Sacramento region who in recent weeks have expressed their concerns about the Maloof Family’s ownership of the Sacramento Kings.

If accurate, the report that the Maloof Family is potentially party to such unscrupulous conduct shocks the conscience at any number of levels.

First, in an era where professional sports organizations have been heavily punished for engaging in “spying” on opposing teams and putting “bounties” on opposing players – the idea that a professional sports team’s ownership group would target its own fans, including prominent and respected local business leaders who are financial supporters of the team, is simply unconscionable.

Lehane then goes in on what happened when Steinbrenner got caught paying Howie Spira, a man with an extremely questionable background, $40,000 to dig up dirt on then Yankee Dave Winfield.

Second, given the history of professional sports owners being severely sanctioned for the use of private detectives involved in comparable activities, it would appear that the Maloofs are possibly exposing themselves to sanctions. Former New York Yankee owner George Steinbrenner was permanently suspended by Major League Baseball for hiring a private detective to dig up dirt on Dave Winfield.

And for the cherry on top, Lehane asks for the federal investigation:

And, third, in deploying a former FBI Agent to engage in what was reported to be acts of intimidation and harassment, various federal criminal statutes are potentially implicated.

The complete text of the letter can be found here. It goes on to identify federal harassment statutes that could apply to the use of a private investigator, it poses the question of whether or not a federal law enforcement official was impersonated, and to tie a bow on things Lehane points out that the act occurred in Sacramento and the Maloofs reside in Las Vegas – creating a jurisdictional argument to be made in favor of federal prosecution.

Even though this seems jarring when taken at face value, unless there is a real smoking gun that could translate into serious charges against the Maloofs this is just a way to shine a light on their behavior. It’s more likely the audience here was really Stern and the other 29 NBA owners.

Furthermore, the real reason why Lehane brought the Steinbrenner incident into focus is the “best interest of the league” clause found in each of the major sports’ constitutions and by-laws. Vincent used the clause to give Steinbrenner a lifetime ban for the Spira incident (among other factors), though Steinbrenner later exerted enough pressure to be reinstated after two years of riding the pine.

There has already been some talk, some published and most of it unpublished, that Stern could or should use the NBA’s version of the best interest clause to force the sale of the team or nicely encourage ‘the boys’ to negotiate in good faith with Sacramento. The motivation is simple. The Maloofs don’t appear to have the money to run an NBA team, the NBA doesn’t need another Sonicsgate, and the NBA itself has gone to great lengths to preserve the Sacramento market.

The questions (in order) are, however, can he do it, will he do it, and at some point does he have to do it?

According to the Marquette Sports Law Review, the commissioner’s office is installed within the framework of a “monopolistic business association,” shielding the NBA from being bogged down by litigation so long as the commissioner’s office provides “due process” for disputes between players, owners, and the league itself. The office is supposed to act as a disinterested reviewing body with the power and independence to sanction players and owners alike. This body gives the owners the ability to ‘obviate judicial interference,’ which is a fancy way of saying the courts stay out of their business on a multitude of legal issues. From the league and owners’ perspectives, a commissioner can resolve certain conflicts faster and more effectively (read: cheaper) than the courts can.

This “due process” is also an important mechanism required for the league to avoid antitrust suits in relocation disputes. If you recall during Stern’s press conference just hours after George Maloof and his antitrust attorneys torched the Sacramento deal, he said “I am very sensitive of the rights of the Maloofs to do what they did.” That’s because in past relocation disputes, leagues have lost cases because they did not give owners, such as Al Davis and Donald Sterling, an appropriate forum and process to apply for their relocation requests. As distasteful as the Maloof’s actions were, honoring the application and due process of a relocation request is paramount and the likely motivation behind Stern’s comments.

This doesn’t mean, however, that the Maloofs get to unilaterally hurt other NBA owners or the league as it considers their relocation request. Moreover, the ‘best interest’ clause sits side by side with antitrust law to determine how much, if at all, the Maloofs can hurt the NBA and its other owners with their relocation activities. While all of this gets fleshed out inside of Stern’s due process, not to mention outside of the due process with all of the various arm-twisting that goes on behind the scenes, it’s the due process itself that upholds the commissioner’s office as a viable mechanism to obviate judicial interference.

And none of that interference may be as important to obviate as the monopolistic protection the NBA receives as it leverages limited supply (teams) against tremendous demand when it threatens to leave cities if public subsidies are not provided for owners.

These subsidies are a billion dollar item on the balance sheet over multiple years, and it is in the best interest of the league to ensure that it places its best foot forward in how it markets its product to municipalities and their taxpayers.

Should any NBA owners be found to be negotiating in bad faith during arena discussions, as it appears the Maloofs may have, the association could be found liable for losses derived from a failed negotiation – in this case over $500,000 for Sacramento and thousands of hours of time by its city staff and representatives. And because of the tax dollars at play nationwide, both lawmakers and the courts will look to the commissioner’s office to see that due process is being carried out on behalf of all parties, from owner to taxpayer.

As if the overall issue of the Maloof’s relocation wasn’t enough, it was learned earlier this week that the proprietor of a Sacramento website called Ransacked Media both personally met with the Maloof’s private detective and later released confidential emails between NBA attorney Harvey Benjamin and George Maloof. While all leaks are not created equally, if it is found that the Maloofs materially harmed the league’s ability to negotiate with future municipalities because they leaked this information it is just more trouble for Stern and the 29 other owners to consider right now. And it can’t reflect well that discussion of the team’s television deal with Comcast was made available for the masses, as Benjamin put it “We agree regarding Comcast, but no one thought it would be wise as a public matter to put this in a public document.”

Well, it’s public now.

Clearly, there are questions surrounding the Maloofs’ end-game strategy and why they would want to own a basketball team amidst serious concerns about their finances. The NBA’s owners told us repeatedly over the summer that very few teams are making money. As the Kings have been among the league’s lowest spending teams for years, they’ve shown that they can’t or won’t spend the money needed to be a title contender. By some reports the Kings are enjoying an approximate $10 million revenue sharing stream and while ticket sales and sponsorships may hold steady for now, the chance for another PR blunder to destroy whatever goodwill is left in Sacramento remains high. As for that revenue sharing, Stern alluded to the fact that the owners could always vote to change their mind about the Maloofs’ continued receipt of their share.

Politically, the Maloofs have all-but destroyed any chance of getting a publicly-funded arena in Sacramento that would meet the needs of the NBA and the city. Their solution to renovate the current arena is an obvious attempt to produce evidence in an antitrust lawsuit, as they will likely seek public funds that will be denied because the current arena is nearing the end of its useful life. Putting any money into it, let alone public money, has been decried as ludicrous by every third-party that’s not a puppet for the Kings. But the family will say they did all they could to make a deal work in Sacramento and that everybody else let them down.

So after burning every bridge in California’s capitol, the only option on the table for the Maloofs that doesn’t include them financing their own facility is to move and/or sell the team. And none of the options to keep the team present the Maloofs with a tremendous financial advantage over this last deal that the NBA negotiated alongside them.

Moving a team to Anaheim, for example, will return at least a $300 million relocation fee as the result of infringing upon the Lakers and Clippers’ markets and render the family upside-down in their investment without some serious help. Seattle just reached a Memorandum of Understanding agreement on Wednesday with investor Chris Hansen that is pending, and the city’s investment of up to $120 million for an NBA-only arena will need to clear all the red tape that Sacramento’s did. Regardless, Hansen isn’t spending over $500 million to roll out the red carpet for the Maloofs. Otherwise, you can add Vancouver, Louisville, Columbus, and Kansas City to the list of cities whose names have landed on the radar, and none of them provide the Maloofs a path to improve their financial standing or support their entertainment holdings. All they provide is a lukewarm bidding war to raise the sales price of the team.

Talking with sources close to the negotiations, it’s clear that many of them are done trying to understand what the Maloofs are doing right now. Exasperated would be the appropriate word. Did the Maloofs threaten an antitrust suit and did the NBA respond by threatening a relocation fee in Orlando? Did the Maloofs leave Orlando with an agreement in principal only to decide days later to leverage their antitrust rights? Are they buying time in hopes that a game-changer comes through the pipeline? Has all of this simply been an exercise in selling the team? Does it even matter at this point? The damage is done. Sacramento has spun its wheels for a family with all questions and no answers, and could very well be left without a team if nothing is done about it.

Now, in their apparent pursuit of evidence for an antitrust case, it appears they may have crossed more lines and bitten off more than they can chew. Whatever their motives may be – they continue to encumber the league’s standing with customers, cities, its own owners, and eventually with lawmakers and the courts.

The appropriate question for the league and its owners is – at what point does the behavior become a recognized liability and at what point do they figure out that holding the line isn’t the smartest play.

Ultimately, it’s in the best interest of the league that they figure this out quickly. Billion dollar subsidies don’t grow on trees.

Watch Portland’s Jusuf Nurkic dunk all over Bol Bol

Leave a comment

Bol Bol had some impressive blocked shots during exhibition games at the NBA’s restart, but he hadn’t gotten one in his 16 limited minutes since the seeding games started. He wanted one.

So Bol tried to get in front of Jusuf Nurkic of Denver on Thursday and… that did not go well.

Bol did later get a blocked shot on Hassan Whiteside.

Nurkic, however, ended the night with 22 points, seven rebounds, and the Trail Blazers got a 125-115 win that has Portland comfortably as the ninth seed, just half-a-game back of eight-seed Memphis. Portland is setting itself up with a better-than-average chance make the playoffs

Kawhi Leonard’s 29 leads Clippers past Mavericks in potential first-round preview

Leave a comment

LAKE BUENA VISTA, Fla. — Kawhi Leonard scored 29 points to help the Los Angeles Clippers beat the Dallas Mavericks 126-111 on Thursday night in a possible playoff preview.

Paul George scored 24 points and Ivica Zubac added 21 points on 10-for-10 shooting and 15 rebounds for the Clippers, who strengthened their hold on the No. 2 spot in the Western Conference standings.

The Clippers entered the night a just half game ahead of Denver, but they shot 54% against the Mavericks to improve to 2-2 in the restart.

Kristaps Porzingis scored 30 points and Luka Doncic added 29 for Dallas, which fell to 1-3 in the restart.

Dallas likely will finish as the No. 7 seed, making a first-round matchup with the Clippers a strong possibility.

“That’s obviously going to be a tough matchup,” Porzingis said. “They’re one of the favorites to win it all. They have multiple guys that have been there already. But we’re looking forward to the challenge and getting experience in that.”

Doncic was coming off a monster game — 34 points, 20 rebounds and 12 assists against the Sacramento Kings on Tuesday. He made 10 of 21 shots against the Clippers, including 6 of 13 3-pointers.

“Luka’s just a handful,” Clippers coach Doc Rivers said. “It takes a whole team to guard him. I thought our guys did a pretty good job overall. We lost him a couple times, which you can never do. So there’s a lot of room for improvement.”

The Clippers led Dallas by 12 in the third quarter before the Mavericks rallied and tied the game at 101 midway through the fourth. Los Angeles responded with a 9-0 run to regain control. The Clippers shot 62% in the fourth quarter to pull away.

“I just liked how we played overall,” Rivers said. “We played like a team tonight, on both ends.”

Though the Mavericks fell to 1-3 in the restart, Doncic remained confident.

“We’re a great team,” he said. “We’ve always got chances, no matter what. I think some people count us out, but we’re not out. We’ll give our max.”

Devin Booker says after latest Suns’ win ‘Kobe’s with me every day’

Devin Booker Kobe
Kevin C. Cox/Getty Images
Leave a comment

Devin Booker grew up a huge Kobe Bryant fan. When Booker made the league in 2016 he got to play against his idol and threw up 28 points on the night. Kobe was impressed. The two talked after the game and Kobe gave him an autographed pair of shoes with an inspirational message:

“Be Legendary.”

Booker took that to heart. He got the phrase as a tattoo. He’s been writing “Be Legendary” on his Nike’s before every game in the bubble. And after he scored 20 against the Pacers Thursday, helping the Suns remain undefeated for the restart, he said Kobe is still inspiring him every day.

“Kobe’s with me every day. You guys see what I put on my shoes with the ‘Be Legendary.’ It’s a reminder.”

Whatever he’s doing, it is working. Booker hit a Kobe-like turnaround game-winner to beat the Clippers. He’s averaging 28 points and 6.5 assists a game for the restart, and shooting 40% from three. Defenses are keying on him, but with a healthy Deandre Ayton and other players stepping up — Cameron Johnson has been a surprise standout in Orlando — the Suns look sharp and keep on winning.

Kobe would be proud.

Giannis Antetokounmpo drops 33 on Heat, Bucks secure No. 1 seed

Leave a comment

LAKE BUENA VISTA, Fla. — Giannis Antetokounmpo and Khris Middleton scored 33 points each, and the Milwaukee Bucks overcame a huge early deficit to get a 130-116 win over the Miami Heat on Thursday to clinch the top seed in the Eastern Conference.

The Heat led by as many as 23 points in a first half where the team piled up 73 points despite playing without Jimmy Butler and Goran Dragic. Miami cooled off after the break and the Bucks took the lead in the third quarter but were down by 6 to start the fourth.

Antetokounmpo, the favorite to win his second MVP award, sat out about five minutes of the fourth quarter after collecting his fifth foul with 11 minutes to go. Milwaukee trailed by 1 with about five minutes remaining before using a 20-0 run, with three dunks from Antetokounmpo, to make it 130-111 with less than a minute to go and cruise to the victory.

Antetokounmpo and Middleton played 30 and 34 minutes respectively after the stars both sat out the entire second half of their last game on Tuesday.

Duncan Robinson had 21 points for the Heat, who lost to Milwaukee for the first time this season after winning the first two meetings.

The Heat led by 6 with about 11 minutes left in the fourth quarter when Antetokounmpo picked up his fifth foul on a charge and headed to the bench. Andre Iguodala made a 3 for Miami before the Bucks scored the next 13 points, capped by a 3 from Bledsoe, to take a 107-103 lead with about seven minutes remaining.

Robinson made a 3-pointer to end a scoring drought of almost four minutes for Miami with about 6 ½ minutes to go and Antetokounmpo re-entered the game soon after that.

The Heat led by 12 with about 10 minutes left in third quarter before Milwaukee used a 16-3 run to take an 82-81 lead with five minutes left in the quarter. Antetokounmpo and Wesley Matthews each had five points each in that span to help close the gap.

The Bucks cut the lead to 3 with a dunk by Antetokounmpo late in the third. But the Heat wrapped up the quarter with a 5-2 spurt to take a 98-92 lead into the fourth.