Almond Innovation Center

David Stern’s Very Good Week

Why is this man smiling?

Imagine for a second that your job is being a commissioner of a sports league. Your job is to promote the league, expand it’s worldwide reach, and really increase the values of the 30 businesses in your league. This is David Stern’s job. The NBA commissioner is nearing the end of his tenure but his league is flourishing, and last week has to be the best week of his career.

GOOD MORNING

So you wake up Monday after hearing rumors of one of your league’s weakest franchises being sold overnight. As you get up and start drinking your coffee and eating your morning breakfast you get the official paperwork. A $525 million dollar valuation for one of the NBA’s weakest performing teams. $525M for the Sacramento Kings? Sweet! Also the transaction would get rid of your league’s worst owners, our friends the Maloofs (See visiting the North Korea of the NBA) and replace it with a hedge fund billionaire and the CEO of Microsoft. Great!

Not only are these all great things for Mr. Stern but the way franchise values work this is a great development for every one of the other 29 NBA owners. If the lowly Sacramento Kings are worth $525M how much are the World Champion Miami Heat worth? Lakers? Brooklyn Nets? In hip hop they call that #cashinout. High fives all around.

THE SACRAMENTO SITUATION

The only dark cloud over this development is the fact that the new owners will to relocate the team to Seattle. This is a mixed bag as you regain a loyal NBA market that was robbed by a nefarious owner but, you lose an arguably stronger fan market in Sacramento that has been fleeced by the Maloof family.

It really wouldn’t be a bad thing for the city of Sacramento to fight to keep the NBA, this shows that cities value the league and desire to keep their teams, further driving up franchise values and willingness for public financing of large basketball arenas. But someone has to step up.

THE PLAYER TURNED POLITICIAN

That someone is Kevin Johnson.

Okay, now imagine a former player in your league turned local politician as the charismatic leader to organize the masses, the local partners, and the BIG MONEY in Sacramento to put a bid together to save the team for the city. I mean what other sports league has a story like this? If you as Stern ever want a story of how the NBA is not just a successful money making operation but also a path for young men to turn into future leaders, Kevin Johnson is your man.

You grant this man a chance.

So you have a former NBA star fighting to create a bid for even more money for said under performing franchise and an ongoing saga on how this will play out. Again, more money in everyone’s pockets. The ultimate decision lies in the hands of the owners of the franchises.

THE RIGHT PATH

If KJ is able to put the pieces together and have a bid ready for Stern and the NBA owners in April, Stern will face a question. Abandon Sacramento for the bigger, greener pastures of Seattle or turn away the billionaire dream team of Hansen and Ballmer? Neither way to go is right, and in addition both options cost the owners money in one way or another. 

With the changed economics of the league and the increased franchise values the only solution to this (still hypothetical) question is to expand. Expand by one team and bring the Sonics back to the NBA. Broker a deal for Hansen to sell his stake of the Kings to the local owners and grant him a full stake in a Seattle expansion franchise for the $525M valuation.

Seattle is back in the league with a fresh start, Sacramento keeps the team it fought so hard for, and the owners in the league get more money. Everyone wins.

It’s not just the economy, stupid

@WaltersBee

Econ. 101—Entertainment such as sports does not create new wealth for a community, merely divides up existng disposable income.

Words from the influential Sacramento journalist Dan Walters.

This tweet sounds like a thinly veiled statement against public financing of the Sacramento arena project. There’s more to it than just dividing up disposable income.

There’s the pride of the city of Sacramento. There’s adding economic activity to a sorely underutilized part of downtown. We need more than just fancy signs renaming K Street “The Kay” to increase interest in downtown and property values, and rents.

This sign alone will not solve our problems

It’ll be interesting to see the details of the new arena deal with Burkle and Mastrov as majority partners. My hope is that they will take steps similar to what Chris Hansen is offering and be more willing to have additional private financing.

The best stories are from cities with privately financed facilities, such as AT&T Park in San Francisco. It would be impossible for anyone to argue that AT&T Park hasn’t increased economic activity in the area south of downtown San Francisco. Although it’s impossible to know what the total economic impact is, it’s clear that having 3 million plus visitors to your neighborhood a year is certainly a good thing for residents.

Sacramento sorely needs a win here. Downtown needs visitors. An arena with 200+ events a year will bring people. Let’s think big for once.

Visiting the North Korea of the NBA

Going to a Kings game at Sleep Train Arena is a bit like visiting North Korea.

BASKETBALL MUST BE POPULARIZED BY ALL GOVERNMENT COMPANIES AND PROPERTIES

To briefly summarize the Maloofs tried to move the team to Anaheim two years ago. They were forced to stay in Sacramento one more year by the NBA and to hammer out an arena deal. A deal was reached in April 2012, the owners celebrated with Sacramento Mayor Kevin Johnson in an on the court ceremony. The family then backed out of the deal three weeks later.

NORTH KOREAN MANAGEMENT

What makes going to a Kings game like visiting North Korea?

In both places you see what neglect and a powerful out of touch family’s rule truly look like. The Maloofs have been absentee owners since 2006. The arena seems like it hasn’t seen a dollar of maintenance since it opened in 1988. Strolling through you can hardly picture the long lost glory days of Vlade Divac and Chris Webber. Just like North Korea in the 1960’s the Kings had a brief period of success that is since long gone. Just like North Korea you see signs of incompetence and neglect. The great folks at crowndowntown.org have documented signs at the arena including this very sad chair…

This seat is just a few rows up from courtside.

THE MALOOF CULT OF PERSONALITY

A huge part of North Korean rule is a cult of personality created by the ruling Kim family. The Sacramento Kings organization has it’s own cult of personality around the Maloof name. Unlike many other sports franchises the Maloofs own their own arena out right and manage the building top-to-bottom in house. Maloof Sports and Entertainment owns and operates the team and the building. The Maloof name is sewn on the uniform of every usher, food vendor, etc etc. Even when I got my Kings tickets in the mail the envelope they were sent in had a giant stylized M on the front side.

Seeing the Maloof name everywhere and have it be a huge part of the game experience must be challenging for hard core Kings fans. It also must turn away casual fans who think of the Kings as a struggling basketball team and the Maloof family as an insult to the fine people of the city of Sacramento.

THE CRUMBLING DICTATORSHIP

This is where the story is no longer like North Korea. Unlike the citizens of North Korea, Sacramentans have protested and blocked the Maloofs in a number of ways. Fans have voted with their feet by staying away. Former sponsors of the team have voted with their wallets by no longer partnering with Maloof Sports and Entertainment (There are many many blacked out ad spaces in the arena, it’s very odd to see). The family’s fortunes in other businesses have evaporated and they have decided the only way to go forward with the Kings is to sell the team. Even if the Kings move to Seattle this is good news.

MALOOF FREE ZONE

If you would like to see this odd scene you better hurry. The days of the Maloof dictatorship are nearly over. On Jan 21, 2013 they submitted paperwork to sell their 53% share of the team to Seattle based hedge fund investor Chris Hansen. If the sale goes through Hansen will move the organization to Seattle.

There will be a final battle for NBA basketball in Sacramento but even if the team stays you’ll see a normal, healthy organization the future, not the bizarre scene you have today at Sleep Train Arena.

Introduction

I’m currently in the process of moving from San Francisco to Sacramento, CA. I’m moving to Sacramento for a number of reasons. I’m following my lovely girlfriend and sometime blog contributor Emily Finkel here. Her posts will be signed @emilyfinkel. I’m also moving to relax and enjoy a simpler way of live, having lived in San Francisco and Boston for the last 10 years.

I’m also very excited about living in a place with four seasons again. I love every season in Sacramento. I love the scorching summer heat and the frosty winter mornings. I love the brief, beautiful shoulder seasons as well. Sacramento is a sports lovers dream and also a vast land use experiment. In this blog I hope to focus on these two topics and use it a pulpit for my beliefs and stories.

Right now the biggest story in Sacramento is the possible relocation of the Sacramento Kings. This has recently become somewhat of an obsession for me. I went to my first Kings game in November and immediately sensed the connection and love Sacramento has for it’s NBA franchise. Even after being battered by two seasons of relocation rumors and broken promises from the Maloof family the Kings fans endure. This will be a focus of mine from now until there’s a resolution.

Thanks for reading. Looking forward to starting this project.