The NBA Rescued New Arena Deal in Sacramento

by March 30, 2012

Everyone was happy for the Sacramento Kings and their fans as a deal to keep the team in the city had been reached last month. However, were it not for the NBA, a last-minute financial hang up could have ruined the whole thing. Reports the Sac Bee: “In a wild day of behind the scenes activity, the Sacramento arena deal hit a major snag Thursday, then was rescued late in the day by National Basketball Association Commissioner David Stern. Hours after the Kings’ team owners said they do not believe they should pay a $3.26 million share to help launch arena pre-development work, Stern told The Bee in a statement the league itself will step in to advance the initial payments. A source close to the negotiations but not authorized to speak said those payments total about $200,000. City officials said they need the funds, coupled with $6.5 million from the city and $3.26 million from AEG, the arena operator, for pre-development work to maintain a tight schedule for arena construction to start next year. In an email message, Stern acknowledged that the city and Kings had come to an impasse over the fee. ‘Following the agreement in principle … the parties have been attempting to reach agreement on funding the pre-development expenses that must be incurred in order for the project to move forward in a timely fashion,’ Stern said. ‘Those discussions have stalled, but I have advised Mayor Johnson that the NBA will advance pre-development expenses on behalf of the Kings pending our report to the NBA Board of Governors at its meeting on April 12-13.’ NBA officials did not say whether they would make further payments after that Board of Governors meeting. For now, though, the dramatic intervention by Stern – the second in a month’s time – appears to have resolved what could have been a deal-ending stalemate. During late February negotiations in Orlando, Stern helped pull the deal together by saying the NBA would assure the Maloofs could hold up their end of the bargain. Thursday’s events renewed bitter feelings that had surfaced last year between the city and the team owners when the Maloofs attempted to move the team to Anaheim. Sacramento Mayor Kevin Johnson issued a terse statement late Thursday, pointedly challenging the Maloofs’ willingness to make a deal work in Sacramento.”