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02-10-2012, 02:43 AM
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JawandaPuck
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I scratch your back, you scratch mine?
Seattle is the city with buzz in NHL circles and word has now leaked out that financier Christopher Hansen has been working with city officials in the northwest metropolis to construct a new facility.

Both NHL commissioner Gary Bettman and NBA boss David Stern have league-owned franchises they want to unload and there is talk they've been huddling and considering a common solution.

Two franchises in one building is good business and the relationship shared by Bettman and his old boss at the NBA is a factor. They have similar problems and with a little diplomacy they might be able to help ease one another's burden.
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The Maloofs (Sacremento Kings owners) using Seattle as the 'relocation' card in their bid for a new arena in Sacremento makes complete sense. Last year they did the same thing with Anaheim and the Ducks owner Henry Samueli. I'm sure Samueli is now in once-bitten-twice-shy mode. He made a great offer to the Maloofs, provided financing for their relocation fee and arena improvements through a Anaheim muni bond offering backed by his Anaheim Arena Mgmt company.

It didn't work though. The Maloofs pulled the plug on Anaheim at the last moment. What scared the Maloofs off? The public facing statement was that they wanted to give Sacremento Mayor Kevin Johnson another shot at getting the financing in order for a new Sac Arena. Could it be though that Chris Hansen stepped in at the last moment last May to make the Maloofs a better offer? (Is it coincidence that Hansen's hedge fund, Valiant Capital Management, at one point last year owned $50M of stock in Samueli's company, Broadcom? Or is that part of a side deal/leverage Hansen has with Samueli to keep him on the sidelines with regard to the Sacremento Kings?)

Seattle Mayor McGinn stated that its probable that Hansen already has some sort of "pathway" with an NBA team. The hot rumor is that its the Sac Kings. That points to the Maloofs and Hansen perhaps having reached advanced talks by this point. The conversations would likely had to have started last season. NBA commissioner David Stern did admit yesterday that he did indeed take a meeting with Hansen last year.

The Maloofs though are on record as saying that they will not sell the Kings. If they need to relocate, they want to remain the owners. Its quite possible, Hansen offer provides for some sort of ownership position. However, complete ownership by the Maloofs is unlikely as they don't seem to have the longterm financial wherewithal according a SacBee columnist.

Apparently, even after selling a majority stake in their Palms Casino Resort in Vegas recently, the Maloofs still owe the city of Sacramento ~$70 million and the NBA another ~$100 million. Those parties will want their money back from them at some point. Perhaps Chris Hansen is their new Mr Money Bags.

We'll find out soon enough. The NBA has imposed a deadline of March 1 for the City of Sacremento to provide a framework for financing a new arena. Sacramento says it can probably raise about half of the $387M required. It's plan is to sell its city parking business (worth $9M/year in annual revenues) to a private company to run. It's received some a couple non-binding bids from parking management companies that look like could be worth about $185M. The City Council is supposed to meet Feb 17 to review. It will have a couple weeks afterwards to decide what its going to do.

If Chicago is any indication, this could be a bad move both financially and from a PR standpoint. The City of Chicago sold their parking business apparently for half of what it was worth, yet the private parking company raised meter rates immediately. The citizens of Chicago very quite unhappy with the whole deal.

Back to Sacremento -- because the the city budget can't really afford to be without those $9M in annual parking revenues, the City has to find way to replace that revenue stream. An option under consideration is a new tax. Arena event goers will likely be paying a surcharge on their tickets to future Kings games if everything goes through.

Maybe the City should also look at taxing visiting teams and players as well -- something that the State of Washington/City of Seattle will likely pass soon in order to pump about ~$60M into Hansen developing the new arena.

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I mentioned New Orleans Hornets in the previous Seattle thread. But these Sacremento Kings may be lower hanging fruit for Hansen. The Hornets are locked into a lease that expires 2014. Now that doesn't mean they can't be moved by a new owner if they also get the NBA relocation committee's blessing.

It will though cost the new owner more to do so since the City of New Orleans will then undoubtedly seek damages for the team breaking the lease (just like Seattle successfully negotiated damages, when Clay Bennett broke the his Key Arena lease in order to move the Sonics to OKC).

In that same article about the CP3 trade back in Dec, Stern says, "Our sole focus was and will remain, until we sell this team, hopefully which will be in first half of 2012, how best to maintain the Hornets, make them as attractive and a competitive as we can and ensure we have a buyer who can keep them in New Orleans." So it shouldn't be to much longer until we find out what happens with them too.

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The City of Seattle is using its leverage to get Hansen's partner, the unidentified prospective NHL owner, to agree to use the Key Arena rather than the Tacoma Dome as their temporary home. Smart move by Mayor McGinn et al...
Sources close to the ongoing arena negotiations suggest the future of KeyArena is a vital component of any deal.

The City-owned building, on the Seattle Center grounds, would stand to lose significant business if a new arena is constructed in either Seattle or Bellevue, and city leaders are carefully weighing that factor.

That’s part of the reason why negotiations have included potentially using the Key as a temporary home for an NBA or NHL franchise, or both, while a new arena is built.
The reporter is Chris Daniels, who has been pretty close to the situation since news started leaking about Levin and the Bellevue option, last year. He's from the NBC affiliate in Seattle -- naturally.

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This is VERY good news for Seattle's NHL hopes. The NBA and Arena come as a bundle deal. The NHL follows in the NBA's footsteps, ie, Phoenix moves to Seattle.

And if it is the Sacremento Kings headed to Seattle next season, then the New Orleans Hornets will again, I would imagine, be in Larry Ellison's (Oracle CEO) cross-hairs to be acquired and moved to San Jose, something he attempted to do in the recent past.

Ironically, the NBA's relocation committee is headed by Clay Bennett, the one who bought and moved the original Sonics to Oklahoma City.

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Last edited by JawandaPuck: 02-13-2012 at 05:05 PM.
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