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Maloof press conference a how-to-guide for burning bridges in Sacramento

Apr 13, 2012, 2:51 PM EDT

worried george

That press conference was so George Maloof.

The nearly 90-minute presser was everything a good old fashion PR nightmare should be. It started as a PowerPoint presentation delivered in monotone prose by Maloof attorney Barry McNeil, and ended in a classic George Maloof back-and-forth with media members that bordered somewhere between ‘desperate’ and ‘tirade.’

The purpose of the press conference was masked as a battle for the hearts and minds of the viewer, as the attorney McNeil took the audience through a chronology that was most likely presented at the Board of Governors meeting the day before. This chronology, of course, presented the Maloofs as victims in the arena ordeal.

But in reality, the presentation was littered with legal markers that both attacked the city of Sacramento and the NBA for its handling of the arena situation. They attacked the NBA and city of Sacramento for being complicit in its refusal to address the Maloofs’ problems with the now-infamous term sheet, and said that it wasn’t Gavin Maloofs’ responsibility to raise concerns when he spoke at the Sacramento City Council meeting in support of the term sheet that was approved 7-2 by the council on March 6.

Aside from several burn-every-bridge-in-sight-with-kerosene moments, George and his team of economists and attorneys brought the case against a Sacramento arena into focus. They specifically discussed the risks to the city and cited a disastrous, but 100 percent different city-funded arena in neighboring Stockton.

They rattled off every reason not to do the arena deal, and expressed a mixture of frustration, anger, and exasperation toward Kevin Johnson, the NBA, and the media covering the events. Though they said that relocation is off the table, the money quote was “if the mayor says he’s not negotiating, then he killed the deal and it’s over. It’s over.”

So translated, yes, relocation is on the table.

Johnson, of course, went on the offensive late Thursday night with a letter to the Maloofs telling them specifically that no negotiation would occur in today’s meeting between the sides.

At the core of the issue is, shocker, money. As simple tenants, the Maloofs aren’t getting the revenue they would like to within their agreement with AEG, the company that will operate the proposed $391 million Entertainment and Sports Complex. The other issue is up-front money, as the Maloofs’ immediate beef with the current proposal is the $3.26 million pre-development costs that could eventually become sunk costs if the arena deal goes south.

But that is chump change, and the real issue is that the Maloofs will not have to pay up-front money in Anaheim, and in the Maloofs’ newest stroke of genius – in their recommendation that a renovation of Power Balance Pavilion is a superior option compared to a new downtown arena – that too would require less up-front money by the Maloofs. Under the current downtown arena proposal, the Maloofs would need to come up with $73 million in an up-front payment for the type of shiny new world-class arena that AEG likes to build.

In other words, they don’t want the outlay and they want the inlay, you dig?

The new wrinkle introduced by George, the renovating of the current Power Balance Pavilion, was particularly shocking after that option has been widely derided by all sides of the arena equation, including the Maloofs, for years.

But what this has all come down to is the Maloofs challenging the NBA to tell them that they cannot move. It appears that they feel they cannot make money in Sacramento with a new arena, and for years they have said that they cannot make money in Sacramento at the old arena.

The Maloofs pulled this same act when they did not like the terms and conditions of the 2006 measure Q & R, so after they accidentally destroyed the measure by flaunting their money in a Carl’s Jr. ad, they actually pulled their support – leading to the 80/20 public vote against the measure.

Now they’re going to try to destroy the current downtown arena deal because they don’t like the economic split with AEG. Perhaps the new idea of staying at Power Balance is their fallback position, a position that they believe they can negotiate a better revenue share out of, but make no mistake this is a scorched-earth policy. They are going to kick and scream until they get what they want, which is usually what people who get what they want do when they don’t get what they want.

In this desperate moment they showed emails from NBA representative Benjamin Harvey, who told the Maloofs that their requests to revise the term sheet that was agreed upon in Orlando was not going to be introduced to the Sacramento City Council for “political reasons.” They torched the 25 business leaders that asked for their ouster, torched mayor Kevin Johnson, and torched the principals of the deal that will provide $255 million in public money toward their enterprise. Their delivery was not polished, and at times it was reckless. Their economist cited measurement mechanisms that would make his colleagues cringe. The interplay between George Maloof and his attorneys was often scattered and unprepared. Gavin and Joe Maloof, were shoved into the corner and barely given the chance to speak.

It’s just an educated theory, but at some point the Maloofs likely realized that the NBA isn’t in their corner anymore, and was negotiating a deal that was more concerned about rewarding Sacramento and AEG with a fair deal than it was about giving a handout to the Maloofs. Five years ago when the Maloofs’ payroll was busty and their finances were better, the NBA would have likely fought tooth and nail to get every last cent for ‘the boys.’

But this is what happens when you begin to bring public shame to the logo. The Maloofs don’t have enough money to run an NBA franchise the way it ought to be run. There was a point in time the Maloofs could have said that the city of Sacramento was dragging its feet and not paying the price of being an NBA town. But Kevin Johnson changed all of that when he made this a keystone issue of his political career, and now the shoe is on the other foot. It’s the Maloofs that stopped running their business with the aggressive intent to make things work in Sacramento. In this messy business of trying to move a franchise, they’ve brought the league embarrassment by dragging one of its best fan bases through the mud. This comes just a handful of years after Seattle’s civic leaders balked at David Stern’s threats, and the story of the abandoned Sonics fan is now a television moment. Now, documentaries show the ugly side of NBA economics and in this day and age of Twitter, every fan can be plugged into all the messy details that were once swept under the rug.

David Stern is going to speak in moments about the issue. The Maloof attorneys took a lot of liberties with how they presented the NBA involvement, and surely Stern is going to take umbrage with the tonalities used by the attorneys to explain the NBA’s positions. Now we’re going to see how far the NBA is willing to go to protect its small market with a big heart. The city of Sacramento clearly has its ducks in a row and can provide ownership with deeper pockets that will wear the logo without embarrassment. The only question is whether or not the NBA is willing to clip one of its own in order to do what’s best for the group.

  1. somekat - Apr 13, 2012 at 3:04 PM

    We all know what happened here. The Maloof’s hired Obama’s economists, and told them “do what you do for the President, but in reverse”

    • stadix093 - Apr 13, 2012 at 3:09 PM

      Leave the politics to Fox and CNN. This is a BASKETBALL blog.

  2. stadix093 - Apr 13, 2012 at 3:07 PM

    I hope Stern destroys these clowns for the 6 month circus they just created.

  3. nodaclu - Apr 13, 2012 at 3:07 PM

    It’s been said in the SacBee that the family regards George as the “smart” one.

    If that’s so, can you imagine?

  4. thebigcaptain2011 - Apr 13, 2012 at 3:20 PM

    @stadix093, I couldn’t agree more. Stern has to crush these guys. Make them sell, or at least create a situation so unbearable for them that they would want to sell. These guys don’t have the money to run an NBA franchise anymore and they are taking it out on everyone else. Get rid of these clowns. This is a disgrace to the NBA brand.

  5. somekat - Apr 13, 2012 at 3:31 PM

    the nba is a disgrace to the nba brand

    • stadix093 - Apr 13, 2012 at 4:12 PM

      Why are you coming to an NBA blog to hate on the NBA? Go sit around and wait for March madness if that’s how you feel. Less negativity people, more thoughtful basketball discussion please, I enjoy it.

      • somekat - Apr 13, 2012 at 4:55 PM

        Tell them to post more things on sports that aren’t a fraud, so I have something else to read during work. I’d rather read a blog on curling that sit at my desk waiting for the phone to ring for hours

        But if you want “thoughtful basketball discussion”, why are basic rules (for example, a defender that establishes position can not be forced from that position) completely ignored in what is supposed to be the pinnacle league?

  6. nodaclu - Apr 13, 2012 at 3:34 PM

    “Make them sell, or at least create a situation so unbearable for them that they would want to sell.”

    I believe, starting with his presser today, that that is exactly what he plans to do at this point.

    Sue or sell…..the only two choices the Maloof’s have left.

  7. franchiseplaya - Apr 13, 2012 at 3:36 PM

    In the early 2000s things looked rosy with the Maloofs owning the Kings but as the years have gone on and the economic landscape has changed this could be the nail in the coffin for either the Maloofs involvement or pro ball in SacTown. Hope its the former rather than the latter and the Maloofs look to sell rather than relocate.

    • somekat - Apr 13, 2012 at 4:57 PM

      They will look to relocate. But (I think) they need the permission of the NBA. Sacromento could always bring a legal challenge to the move too (like the Twins did years ago regarding contraction)

  8. Vindickative - Apr 13, 2012 at 3:43 PM

    AND — the team sucks! And I mean they SUCK. Wednesday night’s loss to the similarly-sucky Hornets made six in a row — piling onto a season which has already seen losing streaks of six, five and four (twice).

    The beleaguerment of the Sacramento Kings franchise has reached an unprecedented nadir. This year’s “young, talented, up-and-coming” squad is on pace to finish the truncated 2011-12 campaign with a winning percentage on par, or worse, with the last three miserable seasons, which have been the worst since the team relocated from Kansas City in 1985.

    The tepid afterglow of the recent ­guess-what-the-arena’s-probably-gonna-h­appen-after-all news was predictably short-lived, as the bafflingly tone-deaf Maloof clan’s beyond-tired obstructionist nonsense is now being aired to the sound of crickets. Such is the complete indifference of the majority of Sactonians to ponying up to see a demoralizing crapshow.

    Lost in all of this is one DeMarcus Cousins, a potentially bona fide NBA star that a team desperately in need of ticket sales and legitimacy could build an identity around. As it stands, the safe bet is that DeMarcus is in daily discussions with his agent, exhausting any and all avenues toward a ticket out of Sacramento to an actual NBA team. You know, like Milwaukee or Charlotte.

  9. AlohaMrHand - Apr 13, 2012 at 4:19 PM

    If I were fans in Aanaheim I’d be wary of having a team owned by these clowns.Sure Anaheim could be a good destination for a franchise but not owned by these hucksters.I used to loathe the Kings back in the day now I’m beggining to support them for the simple fact the fans and the city have been jerked around by the Magoofs and their playboy antics.Theres a reason they had to sell the Palms in Las Vegas and I have a feeling they will declare bakruptcy before they give any money to Sacramento towards an arena or any redevelopment plans.The hell with Seigfried ,Roy, and Liberace Maloof.I wish they’d be put into the poorhouse ala the Dukes in Trading Places.

    • franchiseplaya - Apr 13, 2012 at 4:25 PM

      Gawd I hope that they don’t declare bankruptcy. That might mean the League would have to assume control of the team and I’m not sure that would improve the Kings situation!

  10. sikeologist - Apr 13, 2012 at 5:20 PM

    More like the Maloofs burned the city of Sacramento…I live in Sacramento and it has been complete hell the last few weeks.

  11. beavertonsteve - Apr 13, 2012 at 5:34 PM

    The Maloofs are broke losers who can’t even afford a Carls Junior $6000 burger anymore.

    Get a real owner in there that can contribute some actual cash and accept a little bit of risk in developing an arena in Sac. These guys haven’t put forward a quality NBA product in years.

  12. granadafan - Apr 13, 2012 at 6:29 PM

    If the Maloofs aren’t willing to pay for the arena as multi billionaires, then they can’t expect much revenue from games and other activities. Simple. Kudos to Kevin Johnson for putting his foot down for the douchiest owners in the league.

  13. ray1950 - Apr 13, 2012 at 11:03 PM

    “In other words, they don’t want the outlay and they want the inlay, you dig?”

    You dig? Really? Far out, man.

  14. flyerscup2010 - Apr 16, 2012 at 6:24 AM

    this is a great article, thanks for breaking everything down

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