The National Basketball Association’s biggest public splash of the summer is the Miami franchise signings of Lebron James and Chris Bosh and getting Dwayne Wade to stay in South Florida and forming the nucleus of a “super” team.
That story is garnering a lot of attention globally, but underneath Heat owner Ted Arison’s opening the checkbook and getting three stars on his roster, there is a boat load of trouble brewing in NBA Commissioner David Stern’s world. The sale of the Golden State Warriors by Chris Cohan to a group led by Jacob Lacob for a reported $450 million is a silver lining because it means there are still people willing to put up big money for a franchise for Stern, but it is one of the few pieces of good news that the NBA bean counters will get in the next 12 months.
In Stern’s world, two immediate problems have cropped up. And in the somewhat distant future, there is a possibility that the owners will lockout the players on July 1, 2011 in an attempt to rein in salaries as part of a new collective bargaining agreement. Stern’s owners allegedly lost $400 million in their business last year.
In California, Governor Arnold Schwarzenegger has threatened to cut state employees hourly wages to the minimum wage of $7.25 because of California’s extreme budget crisis, and that is not good news for the Sacramento Kings ownership group looking for funding for a new arena in California’s state capital. A good many workers in Sacramento are state employees and might not be able to afford Kings games if they lose money or their jobs. How can the Maloof brothers, the Kings owners, ask for public funds when there is nothing but fiscal bad news coming out of the state house on a daily basis?
Schwarzenegger had a court’s backing to cut the salaries of some 200,000 state workers until a state budget is passed. Schwarzenegger’s leverage in the political process disappeared last Friday. The Sacramento area could have lost as much as $60 million a week in wages if Schwarzenegger went ahead with the plan. But Schwarzenegger’s idea has been blocked by Judge Patrick Marlette of Sacramento County Superior Court for the time being.
On Tuesday, the Sacramento City Council passed a resolution asking Schwarzenegger to reconsider his order as one in five Sacramento workers are state employees.
Schwarzenegger promised that the pay cuts will be rescinded when the state comes up with a budget. None of this can please NBA Commissioner David Stern who stepped into the Sacramento arena battle in December 2006.
On November 7, 2006, Sacramento voters flatly turned down Proposition Q 72-28 and Proposition R 80-20; both measures would have provided funding for a new arena.
Sacramento voters just did not want to fork over anything extra for a sports arena for the Maloofs, but that did not made Sacramento politicians and business leaders any less determined to build a new venue for an NBA team. Nearly four years later, there are still options on the table.
Stern hired John Moag, who helped negotiate the deal which brought Art Modell and his Cleveland Browns to Baltimore. Modell cut the deal with Maryland in the fall of 2005 and moved his NFL team to Baltimore for the 1996 season. Moag has been working at an arena proposal for years but hasn’t delivered one quite yet.
Sacramento politicians were prepared to give the Maloofs something no other California city would agree to in 2006. There was five hundred millions of dollar available for a sports facility. But the Maloof brothers didn’t really like the Sacramento deal as presented. Compared with New York, Los Angeles, and Chicago, Sacramento is a weak TV and corporate market, so the Maloofs needed every penny generated in the arena for their business and wanted no competing businesses near the building. The Maloofs wanted a parking lot, not a rebirth for a depressed economic area, by the rail yards. The parking lot would have been a revenue generator for the Maloofs, the city wanted to build on the parking lot in an effort to create businesses, jobs and a tax base.
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