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11 October 2009

San Jose expresses interest in Sac Kings

In its quest to attract additional sports franchises to town, San Jose leaders revealed that they are pursuing a NBA team, probably the Sacramento Kings. They're far enough along to admit that they may soon have a MOU (memorandum of understanding) to guide future machinations, just as they've done regarding the A's.

As we all know, the Kings play in what has historically been a very good, loyal market for them. Only in recent years, with ARCO Arena aging noticeably and the talent level on the Kings dropping precipitously (Beno Udrih? Seriously?), has that support dropped. Political efforts to get an arena built anywhere in the area have largely failed, with the only real hope now being the Cal Expo project - which still has no developer willing to bankroll it and won't have one for years. As loud and intimate as ARCO is, it's hopelessly outdated compared to its newer peers and no amount of refurbishing is going to make up for the simple fact that it's not big enough anymore.

What would it take to bring the Kings from the Sacramento Valley to the Silicon Valley? Let's make a list.
  • Territorial "rights" - Like the Giants grip on Santa Clara County, the Warriors have control over a 75-mile radius from Oakland, which San Jose obviously falls within. Sacramento does too - just barely - but the team was grandfathered in, making the current location a non-factor. While there is very little competition for customers between the two teams as they are currently situated, a San Jose relocation would immediately create significant competition between the two teams in the Bay Area market. It would be on San Jose and the Kings to somehow prove that a two-NBA team market could be successful. There are only two such markets in existence now: New York and Los Angeles. As large as they are, they have not proven to be great successes. The Nets play in the dated, uninspiring Meadowlands, and may prove successful if their incoming ownership can actually get the Brooklyn arena built. The Clippers are the poster child for owner negligence, making money for Donald Sterling but rarely selling out unless it's for the Lakers (who treat the two scheduled games as two extra home games).
  • Improvements to HP Pavilion - In the past, I mentioned the improvement to Ford Center in Oklahoma City as a measuring stick. That may be overstating things a bit, as OKC chose to sort of "half-bake" the arena until a team committed. Once the Sonics made the announcement, OKC put in $121 million in luxury and technology improvements. That wouldn't be the case in San Jose, which has excellent club areas and plenty of suites that may only need a little spiffing up. Structurally, it's a different story. The lower seating bowl will need to be partly ripped out and rebuilt to properly accommodate basketball sight lines. LA's Staples Center, Portland's Rose Garden, and DC's Verizon Center all have dual-rise seating which makes the transition from hockey to basketball easy for staff and fans. With as many events as the arena puts on every year, this is an imperative. The deal would also have to include some number of so-called "bunker suites," groups of courtside seats with quick access to no-view suites under the lower bowl. Additionally, some of the newer arenas have also included small club lounges at event level. All of those things take up space and I'm not even including new locker rooms and other team facilities for the Kings. HP Pavilion has a very tight footprint, I don't know where where all of that stuff will go. My guess is that should they try to get all of these items addressed, it would take $100 million - all of it public funds, which would bring on a referendum. We're talking David Stern, folks. He twisted the knife in Seattle, he made demands of OKC, he'll look for a pound of flesh in SJ too.
  • New practice facility - The Kings have been using a $9.1 million practice facility jointly with the WNBA Monarchs since 2000. A new one would have to be found somewhere in the Valley, though that shouldn't be too difficult. I suspect the Maloofs won't be happy moving into a typical Class A office building meant for a tech company - that's just not their style. Still, sites for a practice facility are plentiful especially in North San Jose. In fact, I think some other local sports team may have some extra undeveloped land that would work well for this purpose. Cost: $10 million.
So that's $110 million coming from somewhere plus whatever compensation for the Warriors has to be whipped up. I have concerns that this talk will conflate with dealings regarding the A's, making efforts to bring either team down more difficult. There's also the internal ownership question: How much are the Maloofs willing to sell of the team to make this happen? Surely they aren't looking to give away controlling interest. They love owning the team way too much even in lean times. On the flip side, there is one fringe benefit. The Monarchs would likely move to San Jose as well, and this area is a much better natural fit for a WNBA franchise given the legacy of support for women's hoops in the area (Stanford, SJ Lasers).

Taking the 50,000-foot view, it appears that any of the obstacles described above are equally likely to trip up any deal to bring the Kings to San Jose. At this point, whatever the chances are of bringing the A's south, the prospects for doing the same for the Kings have to be somewhat less promising.

26 comments:

Tony D. said...

I agree with you R.M. 100%.

While I don't have a problem with the Sac Kings in SJ, I think SJ should put all current efforts into landing the A's.

And as expressed by Bartleby at one time, perhaps SJ should wait out the Warriors lease at Oracle and bring them down in 2017, which isn't to far away. This will also give SJ 8 years to bring HP Pavilion up to date.

I did hear back in June that Chris Cohan might be interested in selling his share of the Warriors. Greg Jamison/SVSE, along with perhaps Larry Ellison, could buy this share and start making plans for HP Pavilion in 017.

By the way, why haven't the Clippers considered setting up shop in The O.C./Honda Center.

(yes, I'm not watching the Raiders get their A$$es handed to them.)

Jeffrey said...

Seriously... bad idea.

Ezra said...

@Tony D

It was speculated that the Clippers would move to the Pond before Staples Center was built, but they decided to stay in L.A. in order to get a bigger piece of the pie. All of L.A. is a much bigger market than limiting yourself to O.C. Look at the "Los Angeles Angels of Anaheim" as a prime example.

Pat Dandeaux said...

Woo hoo!

We're going to be getting a soccer stadium, an MLB team, an NBA team, and, after we annex Santa Clara, an NFL team! And a new airport terminal, BART, and high-speed rail.

Now all we need is indoor beach volleyball, an expanded convention center, a downtown casino, grand prix auto racing, the summer Olympics, some downtown retail, a deep-water port at Alviso, Alaska-style BBQ, a world-class mega-church, and a 28-story skyscraper.

That's all scheduled for 2017-2029.

Anonymous said...

Sounds good Pat--so what's you point??

Pat Dandeaux said...

Anon 9:23

My point is that here at The Chamber we are really excited about all the good things that might be coming to San Jose in the next few years and decades.

Aren't you?

Anonymous said...

lets just move everything to san jose forget the fans that grew up loving a team from there local area

Anonymous said...

Unlike the A's, the Warriors have been successful in Oakland. Satisfying the bravado bragging rights of Bartleby and Mark Purdy is not a good reason to go to SJ.

Anonymous said...

Yeah, because no one in SJ grew up loving their local teams. Some of you are so myopic.

Anonymous said...

anon 524,
San Jose is part of the local area. They're not moving to San Jose, Costa Rica!

anon 931,
The Warriors have been successful in Oakland because they're the only NBA team in town and because the arena is a somewhat decent facility. They would probably be happier at HP Pavilion/SJ or a new arena in SF.

Anonymous said...

Can you please tell me why "they" would be happier at the HP Pavilion or SF?

The Oracle arena has just gone through heavy renovations over the past few years and is actually a pretty nice facility. Since basketball games are played indoors, that's what really matters in the end. I know for sure the players don't have any problems with the facility and are happy where they are. It's already very easily accessible by BART and freeway access. On top of that the Warriors don't seem to have any problem drawing large crowds to every home game.

You San Jose partisans needs to really stop being so damn greedy trying to take every frickin' team you think is available for a move within the Bay Area. Focus on one thing at a time or you'll probably not get anything at all.

Jeffrey said...

I think, in the Warriors case (1 team in the sport in the region) that central location is a huge advantage.

The NBA has no reason to support having a second team int he region, as the Warriors do well without even being good. WHy mess that up?

I think San Jose also would only diminish the season ticket sales for the Sharks by bringing direct competition to town in the form of an NBA team. Why mess with a good thing?

The particulars here as so different from the 49ers or A's situations. I just don't get why most people would think this is a good idea.

Dan said...

Don't worry not everyone thinks it's a good idea. I think the negatives far outweigh any positives for several parties. For the NBA and Warriors it creates unneeded competition for one of their teams that draws well despite sucking. Second for the Kings, they'd go from having their own market to having to share a market (albeit a bigger one) and into an arena that while nicer than Arco Arena is only a half dozen years newer than their current home. And for the Sharks this would be a bad move as the majority of the Kings fans would end up being south bay locals who might otherwise have purchased Sharks tickets and thus it would screw up one of the NHL's most ardent fanbases. The only ones who would really benefit from this are possibly SVSE with the rent revenues (and I'm not convinced they'd end up with more money from a sports team then the do with all the dates they have filled currently with things like Disney on Ice, etc...) and the city with the prestige of having another team which they really don't need since they're already working on getting a much bigger prize in the A's that is much more likely to happen.

Anonymous said...

So help me out--personally I don't watch the NBA anymore--much more into college hoops---so I don't care about this one way or the other--but why would SVSE,which is an arm of the Sharks, want a NBA franchise if its going to negatively impact the Sharks?

Marine Layer said...

42 guaranteed home dates plus an occasional playoff run, an All Star weekend down the road. It's also easier to ask for improvements to the arena under the guise of moving the Kings here instead of asking solely for the Sharks.

Anonymous said...

Dan, please explain how the Sharks are hurt but SVS&E benefits. I'm pretty sure they're the same entity.

11:12, San Jose "partisans" who comment on a blog are not bidding for these sports franchises. The city of San Jose is playing all of its cards and making itself open to business. Grow up and learn how the world works.

Dan said...

True it could allow the arena to be updated, but is it really worth it for either party. Yes it would be moderately improved for the hockey team, but it seems to me the loss of ticket revenues would be a bigger issue for them. And as for 42 guaranteed dates, it's not like the arena needs more dates. It's already one of the most heavily booked arenas in the US as it stands now.

And for the city, it seems to me I'd point at Key Arena as a warning. Sure they'll spend 150 million updating the arena but there is no guarantee in 15 years or less the Kings won't want either another total renovation or a new arena. For every Warriors with their renovated arena there's a Seattle Sonics (or in this case now OKC Thunder) with a city left with a renovated arena that is now empty.

Dan said...

Anon 1:29, First yes SVSE is the owner of the Sharks, but what benefits the parent company doesn't necessarily benefit the team itself. Second point, I'm not convinced that this helps SVSE. Remember they'd get some of the rent from the Kings and the city the rest, but other revenue streams like concessions, parking, etc... would go to the Kings themselves. Compare that to how those 42 dates the Kings would take up are filled currently (concerts, ice shows, Strikeforce fights, etc...) where SVSE gets the lions share of the revenues. Frankly I see these secondary events as being of much higher value to SVSE then the Kings would be.

Marine Layer said...

It's really a matter of supplementing the existing schedule. Just from comparing the Kings' 2009-10 schedule to the current three-month schedule at HP Pavilion, it wouldn't be that hard to accommodate the Kings and many of the current tours.

Current Kings home games
11/2 vs MEM - Open at HPPSJ
11/4 vs ATL - Open
11/8 vs GSW - Open
11/10 vs OKC - Move to 9/9
11/13 vs HOU - Conflict, no solution
11/17 vs CHI - Move to 11/16
11/25 vs NYK - Move to 11/26
11/27 vs NJN - Move to 11/28
11/29 vs NOH - Move to 11/30
12/2 vs IND - Open
12/5 vs PHX - Move to 12/6
12/9 vs DEN - Move to 12/10
12/12 vs ORL - Conflict, no solution
12/26 vs GSW - Move to 12/27
12/30 vs CHA - Move to 12/31

It all comes down to the deal. If SVSE gets a minority share of a team (20%), they'll automatically be in a revenue sharing situation. If it's a straight landlord-tenant relationship, the NBA and the Kings probably aren't interested.

Anonymous said...

Doesn't SVS&E run the arena? I don't think they'd allow themselves into an unfavorable situation. The question is if a potential relocated team would. There obviously has to be a compromise somehow.

As for this dreaded downfall of the Sharks with another team in town, Santa Clara County is about 1.8 million of the nation's richest people. Comparatively, Denver metro has about 2.5 million with NFL and MLB, to boot. Enough fans to go around, I'd say. That's not counting people who might cross county lines.

In the end, giant corporations just shell out more for their boxes at HP because they have double the nights to schmooze clients. Nobody will panic if 17,496 becomes just 17,000 on occasion.

Anonymous said...

Like Dan said, HP Pavilion is already very highly booked and adding a bunch of basketball games will only make the ice worse.

The Arena in Oakland was just redone; it's very nice inside. No need to move the Warriors if you ask me (and that goes for the proposal in SF that occasionally pops up like it did again this week).

I'd also prefer to see Sacto work something out and keep the Kings there. I don't know if this is a big enough market for another pro sports team. We already have 6 -- the same as LA, which is much bigger.

Tony D. said...

Jeffrey,
I actually agree with your post. I'll be more than content on having just the A's and Sharks in downtown San Jose; that's year-round critical mass of 20-32K 81+ times a year and 17.5k 42+ times per year!

I'd much rather see SVSE/Greg Jamison buy a stake in the Warriors and make plans for a move south in 2017. With HSR planned from SF to SJ, BART from Fremont/East Bay and future Altamont HSR from Tri/Central Valley, downtown San Jose will one day be more centrally located transportation-wise than Oakland.

It's all about the future my friends.

Tony D. said...

By the way R.M.,
The Staples Center seems to have no problems handling the Lakers, Clippers, NHL Kings, and other events...how do they do it in SoCal?

Marine Layer said...

It's an impressive juggling act. The Lakers and Kings get the primo dates. The Clippers are often relegated to Saturday and Sunday afternoon games, sometimes as the "matinee" to a Lakers game. All teams get kicked out of Staples for two weeks in early February for the Grammy ceremonies.

There aren't as many concert tours at Staples as you might think. Many of the tours end up at Honda Center in Anaheim instead.

The name of the game is guaranteed dates. The Grammys are guaranteed. Disney on Ice is guaranteed. The Pac-10 hoops tourney is guaranteed. Pro sports can guarantee half of their seasons plus bonus playoffs and exhibitions. Concert tours are often linked to record releases, which depending on the artist can be hard to forecast. Therefore the concert business is prone to major peaks and valleys. Then you have weird situations like Kanye West, who after the VMA incident went to India to "rehab" for two months. He cancelled his tour. The worry is that as more of the mega-acts age, there will be fewer arena and large ampthitheater tours.

Arenas aren't really in the position to choose between sports and other events. Given the opportunity, arena operators will always choose to pack the schedule and work through the details as they go.

Sid said...

The Kings in San Jose actually makes sense.

The Bay Area is 7.5 million people and the Warriors in Oakland only touch about 4 million of them.

Santa Clara, Santa Cruz, Monterey, and South San Mateo counties are simply too far from Oakland to make games. I am a Warriors fan and the reason why I do not have season tickets is because of sheer distance from the south bay.

The Kings in Sacramento are in a 3.0 million person market while in San Jose they would be in a 3.5 million market (4.5 million to the Warriors)and would keep another 500,000 fans in Stockton, Modesto, and other central valley cities. Traffic goes the other way at night so getting to San Jose for a weeknight game is a smooth commute.

Plus the per ca-pita in San Jose is far higher than Sacramento, also the # of corporate sponsors is not even close in comparison between the markets.

Richer fans and richer corporations equals higher payroll and more ability to keep and sign free agents. Don't forget the weather is way better in San Jose.

The HP Pavilion will need to be renovated and SVSE will pitch in money to help out as it behooves them to have 41+ extra games in the arena.

Public transportation already exists and the arena is 1-2 miles from 4 major freeways (87,280/680, 101, 880)

Concerts, Disney on Ice etc....do not net 18,000 fans 41 times a year at the Pavilion.

The south bay is an untapped gold mine which is why the A's are trying so hard to move here. In San Jose their payroll would be top 5 in MLB and would dwarf the Giants.

The people out here would sell out the Pavilion for basketball as the Sharks would not lose any support because they are a different sport and they are freakishly good.

The Warriors have had this market far too long all to themselves and their bad management keeps getting rewarded with fans due to a lack of options.

With a 2nd team in the market this will force the Warriors to evolve into a better run franchise or lose fans.

Lose fans? Isn't that what is supposed to happen when you suck for 18 out of 20 years?

Competition breeds improvement and the Warriors are in dire need of it.

Sacramento has failed several times to get a new arena over the past decade even when they were contending for NBA titles.

They area is too poor to support a pro team and they will not put a single dime into the only team they got.

If they move to LA they have to pay off 2 teams (Clippers and Lakers). In the Bay Area the Kings would only have to pay off the Warriors.

Also NBA re-alignment comes into play here which is why they can't move to Kansas City as it would screw up travel big time. Seattle moving to OKC helped travel. Sac to KC would not.

By moving to San Jose they can remain in the same division and it will not affect travel for visiting teams.

The Maloofs see this and unless something happens in 2010-2011 they will be playing in San Jose come 2011-2012.

Sid said...

My bad on the realignment comment above.

If the Kings move to KC they can simply put Portland in the Pacific and have KC move to the Northwest with OKC, Minnesota, Denver, and Utah.

Actually makes travel easier.