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

Apr 13, 2012, 2:51 PM EST

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.

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