Hello Followers. Hope you’ve had a great week.
As for me, well, I’ve been sick as all holy heck. But, that didn’t stop me from closely following news about the forthcoming arena deal. For my thoughts on whether professional basketball will soon arrive in the Emerald City, then read on..
Followers, before we get to the issue of the arena and the Seattle Supersonics, a quick word about our Cougar hoopsters who I watched last night. While it was hard to watch Motum miss six consecutive FTs in the games final five minutes (including missing two of three when down 3 with a minute left), the fact of the matter is that this basketball team is completely different than the one that started the year. They play bigger, they play faster, and for the most part, they play with more purpose. While I still have resigned myself that Reggie Moore is never going to be the player that many of us thought he could be, the fact of the matter is the Motum is a LEGIT POY candidate on a winning team and Shelton is emerging as a capable AND athletic big man. And frankly, the way this team is playing right now, they could win 4 of their next 5 games. And that would put them squarely in the CBI discussion. And that would be fun…
Now, back to the Arena.
So, as all of you know, the big news coming out of Seattle yesterday was the announcement of Chris Hansen’s proposal to build a professional sports arena in (South) Downtown Seattle. As highlighted by the King County Executive as well as the Mayor, the proposal met all criteria set forth by local government: Namely, NO NEW TAXES.
On top of that, apparently Hansen will assume burden for all cost overruns and will even go the extra mile by making the incremental step toward having the City assume ownership of the building as time moves forward!
In response to the Golden Goose being laid on their laps,
the Mayor and County Exec promptly appointed a committee of “experts” to review the feasibility of the proposal. While there were certainly some names which one might consider to be “experts” on reviewing such proposals, most of the committee members represent diverse stakeholder groups throughout the region. Meaning: Most of the committee members are not experts on anything related to contract law or massive construction projects, they’re people that can help the City and County gain the needed political cover to fast-track this proposal through the approval process.
So, where does this all go from here?
Well, as I noted on Twitter last night, this thing is either going to explode in a moment’s time or it is going to go nowhere in a hurry. While most of the news last night was old hat, one golden nugget/snag reared its head immediately following the presser. And that nugget was as follows:
The Arena financing will work ONLY if franchises from BOTH the NBA AND NHL are secured.
Yep, the Arena will only be built when Hansen can secure two franchises to fill his building. And really, this news adds a host of moving parts that are pretty difficult to follow. So, let’s quickly unpack them.
Moving Part 1: NHL and NBA will not relocate without new Arena.
This one is the most basic, but is not trivial. NONE of the parties we would like to hear from (e.g. NBA/NHL folks/francises) are going to say anything of substance on record as long as the Seattle arena is a hypothetical. So, if you’re looking for Phoenix of the NHL or the NBA to make a statement on Seattle, it isn’t going to happen until the Arena deal is done.
Moving Part 2: Chris Hansen wants to own an NBA team.
While this point may not pose a problem for Seattle sometime in the near future, it does pose difficulty for Seattle’s ability to secure the Sacramento Kings. Why? Well for one, the Maloofs are not selling their team. You see, those boys sold their father’s beverage distribution business—the business that build their family’s fortune—in order to be able to keep the Kings. They also sold nearly all interest in the Palms Casino so they could keep the Kings. And on top of that, there’s this thing called history. You see, in the early 1980’s, the Maloofs owned the Houston Rockets, and after they sold that franchise in the 1980’s, they vowed that if they ever got back into the league, they would never sell again.
On top of that, the Maloofs and the Kings currently carry a sizable debt. And so, part of the allure of the Arena deal in Sacramento is that the Maloofs would gain revenue not only from basketball-related events, but NON-basketball/sports related events as well. And the same type of $$ incentives remain with the City of Anaheim who promise to pay off the Maloofs debt as a condition of moving the team to Southern California.
So unless Chris Hansen plans on altering his entire financing plan by helping to pay down the Maloof’s debt and becoming a minority owner with the Maloofs, we can all forget about the idea that Sacramento is coming to Seattle.
Moving Part 3: Key Arena may not accommodate the NHL.
Perhaps the most disturbing news that emerged last night concerns the rumor that Key Arena may not be able to accommodate the NHL for any period, let alone two years. While I am not sure I buy that, neither the Mayor or the County Executive were able to confirm that both an NBA and NHL franchise could be supported by Key Arena. And if true, this would seem to be a potential the deal breaker.
You see, because ground will not be broken on an arena until BOTH franchises are secured, then the process of getting an NHL team appears particularly muddled if Key Arena can’t support it. After all, is any owner—especially since Hansen has said that he will not own that franchise—be willing to entertain two years as a lame duck in another City. Is it a good business decision to let a relocation sit out there for two years while political pressures, law suits, and the emergence local buyers may threaten to derail the process?
These are tough questions. And since the NHL does not generate the type of revenues that the NBA does, I can’t imagine someone taking the risk of being a lame duck for two years in another town. I also can’t imagine that Hansen et al. would take the risk of building an arena without the assurance of knowing that their new NHL franchise is already playing up the Street at Seattle Center.
Moving Part 4: There are no moving parts, everything is already done.
And this is the big one. From my VERY limited experience with these types of business workings, most of the time these types of deals don’t become public unless they are already signed, sealed, and delivered. And while Hansen seems to be Joe Humble, we should not mistake his humility with a lack of ego. In fact, one would bet that Hansen NEVER steps forward unless he already has very clear promises from the higher powers that all of these moving parts have already been secured, making his elaborate and generous business model not only tenable, but eminent.
And so, as we look forward, we need to only look as far as April 1st.
At that time, Seattle and King County will have already approved the Arena deal. Sacramento will have passed their parking proposal and will have secured financing for their NBA Arena. And the Maloofs, the NBA, and AEG will have convened following a 30 day extension to figure out their ability to add 250 million to Sacramento’s public money. And that’s when things will get really, really interesting.
In the end, I believe Sacramento will stay put with the Maloofs at the helm. Seattle gets either Minnesota or Memphis in 2014-2015 with the hope that news of a lame duck status will facilitate negotiations that will release those teams to Seattle in time for the 2013 season. And the NHL? Well, that deal has to already be in place. So, if its not the Phoenix Coyotes heading to Seattle, then you can pencil in that some other NHL team will be playing in Seattle in 2013, if not this Fall.
One thing is for sure: This is all going to move really quickly, or will slowly sink into oblivion.
But, my mind, this is a done deal, folks. The only question now is “What has been done?”
All for now. Go Cougs.