For a number of years, we’ve heard economists poke holes in the arguments of franchise owners that building new arenas and stadiums on the public dime leads to prosperity for the cities in question. How rare, then, that such an hypothesis would be blown to bits by a pair of club owners themselves, in this case, George and Gavin Maloff, who seem hellbent on torpedoing plans to build a new Sacramento venue for their Kings — a scheme they’d previously agreed to. From the Sacramento Bee’s Mary Lynne Vellinga :
In a press conference called by the Kings owners in New York, Beacon Economics head Christopher Thornberg, one of California’s most prominent economists, said the terms of the arena proposal would put the Kings at enormous financial risk and place the city “right on the edge” of financial disaster.
Thornberg said the city’s estimates of financial benefit from an arena are way overblown, and the projections of attendance at Kings games far too rosy.
In other words, the Kings aren’t merely seeking a move to Anaheim out of sheer greed, they’re doing it because they love Sacramento too much to stay. True Hoop’s Zach Harper takes a dim view of the Maloofs’ flip-floppery and declares, “It’s time for David Stern to put his foot down and show that a handshake is actually worth some good faith.”
If you wanted an example of not operating in good faith then look no further than what the Maloofs are doing here. I get the motivation. Sacramento is a very small market, especially when lined up side-by-side with the city of Anaheim. The television contract alone would help the Maloofs recover the assumed loss of wealth from their alleged failed business ventures over the past few years.
When you’re bad at business, you need to find a way to get good at it and improving the market in which your business is based is a good way to start. The problem is they’re trying to move into a market that doesn’t really need a third team. Most major markets don’t even have two teams, let alone a third.