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After a year of negotiations, economic reports and financial cartwheels by city officials and Sacramento Kings owners, NBA Commissioner David Stern said it appears the deal for a new Sacramento arena is dead.
“I am extremely disappointed on behalf of both the Maloofs and the city of Sacramento,” Stern said at a New York press conference Friday, “but I think there is nothing further to be done.”
Stern said the NBA Board of Governors met Thursday with the Sacramento Kings team owners, the Maloofs, and – after hearing a “detailed and thorough” presentation – Stern said the board came to some simple conclusions.
“(In Orlando) we had an agreement in principle – a framework, a handshake deal you could call it,” he said. “In my view it was always subject to any party saying they didn’t want to do it. It was always non-binding.”
At an earlier press conference Friday, George Maloof, attorney David McNeil and economist-for-hire Chris Thornberg outlined the reasons the Maloofs were no longer interested in the handshake deal that took place Orlando.
The concerns included issues with profit-sharing, naming rights and signage, approval rights on contract agreements and pre-development costs.
“The terms under which we would be required to make financial commitments were wholly unworkable,” George Maloof said.
Stern said he felt the area deal failed because the Maloofs re-examined certain assumptions underpinning the deal and – upon closer review – they grew increasingly uncomfortable with it.
“They recognized that (since) it was necessary to bring in a third party, AEG, because we needed their funds to finance the deal – together with their existing debt load – it would further burden the team,” Stern said. “They ultimately decided this isn’t a transaction they want to go through with.”
Stern said that it would have saved everyone a lot of angst if the Maloofs had said they wanted out of the deal “sooner and simpler.”
George Maloof suggested at the earlier press conference that a better idea than building a new arena might be to revamp the existing Power Balance Pavillion, where the Kings currently play.
“If they choose to do that, that’s up to them,” Stern said.
Stern told media that, in Orlando, the NBA agreed to advance $63 million to the Maloofs to help finance their portion of the deal – and that the NBA would make an additional $7 million contribution to the Maloofs for other costs associated with the arena deal.
“I don’t think we have anything further to give, to cajole, to yell at or to do any of the various things I tried to get the parties on track to a workable deal,” Stern said.
Stern commended the city of Sacramento, the fans and Mayor Kevin Johnson for the effort to make a new arena deal work.
“We asked the city of Sacramento to step up and they did so in an extraordinary way,” Stern said. “They couldn’t have done so in a finer fashion.”
Johnson was in New York Friday to meet with the Maloofs to discuss the arena deal, however Stern said he was “hopeful but not optimistic” about the potential outcome of that meeting.
Melissa Corker is a staff reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.