Annnnnnd Boom goes the dynamite

Dustin5566 · Post #1 » by **Dustin5566** » Thu Jun 16, 2011 3:09 am

The owners of the Sacramento Kings have surrendered controlling interest in their Las Vegas casino, in a deal that they say improves their finances considerably.

After months of negotiations, the Maloof family announced Tuesday that it has reached a "recapitalization" agreement with the Palms Casino's main creditors, investment firms TPG Capital and Leonard Green & Partners.

Co-owner George Maloof said the deal erases the Palms' debt but leaves the family, which built the trendy casino a decade ago, with less than 50 percent of the equity. That gives controlling interest to TPG and Green.

But Maloof, who enjoys a high profile in Las Vegas, said he will continue to run the Palms.

Read more: http://basketball.realgm.com/wiretap/21 ... z1PP9jbUCz

SacKingZZZ · Post #2 » by **SacKingZZZ** » Thu Jun 16, 2011 8:10 am

It erased their debt and they still have equity in a sunk property!? Not a bad deal for them. This sounds like something that is going to free up whatever cash they have since they won't be paying that debt down. Must be the reason they're sounding off about spending $$$ this year.

Of course now they definitely jumped down the ladder of riches.

PaKwAn · Post #3 » by **PaKwAn** » Thu Jun 16, 2011 4:22 pm

sucks having these type of owners... having a mark cuban type owner is a city's dream which would do anything for that team to be successful!

twoolfork1 · Post #4 » by **twoolfork1** » Thu Jun 16, 2011 5:04 pm

I know the articles are painting this as being a great deal and all but my concern now is what do the Maloofs actually own now besides the Kings? They sold the beer thing is New Mexico and now lost controlling interest in the Palms so what's left? Where are they going to be making money from?

Post #5 » by **pillwenney** » Thu Jun 16, 2011 8:25 pm

twoolfork1 wrote:I know the articles are painting this as being a great deal and all but my concern now is what do the Maloofs actually own now besides the Kings? They sold the beer thing is New Mexico and now lost controlling interest in the Palms so what's left? Where are they going to be making money from?

It's not like they were making money on the Palms before.

Regardless, I don't see how this can be seen as anything but a good thing for us.

Krimzen · Post #6 » by **Krimzen** » Thu Jun 16, 2011 10:06 pm

As I understand it, the problem hasn't been that they weren't making money on the Palms. The problem was that they expanded aggressively by building a new tower with some big loans, with the loans being taken out with the expectation of continued large profit margins. Then the financial downturn hit, and suddenly their profits were much lower and they were left holding a ton of debt. That is what caused them to pretty much tap out all their other sources of income by selling the beer distributorship, getting loans from the NBA, and attempting to move to Anaheim in return for large personal loans they were promised.

Bac2Basics · Post #7 » by **Bac2Basics** » Thu Jun 16, 2011 11:01 pm

I'm just wondering what this change will mean for the Kings, the Arena issues, and the rest of it.

SacKingZZZ · Post #8 » by **SacKingZZZ** » Thu Jun 16, 2011 11:18 pm

pillwenney wrote:
twoolfork1 wrote:I know the articles are painting this as being a great deal and all but my concern now is what do the Maloofs actually own now besides the Kings? They sold the beer thing is New Mexico and now lost controlling interest in the Palms so what's left? Where are they going to be making money from?

It's not like they were making money on the Palms before.

Regardless, I don't see how this can be seen as anything but a good thing for us.

Exactly, in fact, it sounds like a huge part of their monthly bills just went away.

Post #9 » by **Wolfay** » Sat Jun 18, 2011 9:59 pm

The Maloof family will soon own just 2 percent of the Palms Casino, its trendy Las Vegas property, according to regulatory documents filed in Nevada.

http://www.sacbee.com/2011/06/18/370975 ... palms.html

It does say later in the article that the Maloofs could regain up to 20% of the casino when all is said and done, but either way this further confirms what we thought for a while now- the Maloof's financial woes are real (the casino is debt free now though).

The article also says that the Maloofs are still committed to turning the team around, but I'm not sure how they're going to do that.

SacKingZZZ · Post #10 » by **SacKingZZZ** » Sat Jun 18, 2011 11:20 pm

Well, they were in a hole every month, a great big one so no matter what they're still better off than they were. Their overall wealth has certainly taken a turn for the worse however. Their financial situation had to have been discussed with the NBA during the whole war for the Kings in NY awhile back, if it was that bleak they would have been instructed to sell.

As a positive, now more than ever they might need the Kings to do well and putting a respectable team on the floor might be their only option at this point.