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April 15, 2011

The Score: A Sacramento lawyer works to Save the Kings

April 15, 2011 7:11 PM

The Score: A Sacramento Lawyer Works to Save the Kings

Posted by Brian Baxter

If one Sacramento lawyer has his way, professional basketball in California’s capital city will not end with the conclusion of the team’s season this past week. The Sacramento Kings, who lost to the Los Angeles Lakers 116-108 in overtime on Wednesday night, could soon be headed to Anaheim.

Kings owners Joe and Gavin Maloof, two billionaire brothers who made their fortune in the entertainment business, are planning to file documents with the league to move the team to Anaheim for the 2011-12 NBA season. The brothers have been seeking a new arena for the Kings, which currently play in the outdated 17,300-seat Power Balance Pavilion.

The Maloofs are represented by Loeb & Loeb media and entertainment partner Scott Zolke in Los Angeles. Their deadline to produce a relocation application for the move to Anaheim to the league originally was set for April 18.

On Friday, NBA commissioner David Stern announced that the league had extended the deadline to May 2, giving the lawyers involved two more weeks to work their magic.

Jeffrey Dorso, chair of the land use and environmental law department at Sacramento firm Diepenbrock Harrison, is representing the Committee to Save the Kings. The group is an ad hoc collection of local business leaders and Kings fans, Dorso says, and it hopes to prevent the team from relocating to Anaheim.

“I grew up in this area and I’ve been a Kings fan for a long time and always had an interest in sports,” says Dorso (pictured right), who is handling the matter pro bono. “People seem to think Sacramento is a small town, which it is, but as a media market we’re actually the twentieth-largest in the country, larger than several other markets that have thriving NBA franchises like Charlotte, Portland, and Utah.”

One of Dorso’s legal strategies in preventing the Kings from moving is blocking a $75 million bond offering by the city of Anaheim being used to finance a potential relocation of the team. Dorso says about $25 million from that sum will be used for improvements to Anaheim’s 18,300-seat Honda Center, where the Kings would play, with the remaining $50 million able to pick up relocation costs and a fee the Maloofs would have to pay to other NBA owners to move the franchise.

As Dorso sees it, if Anaheim’s city council approves a resolution allowing for an issuance of the bonds without taxpayer approval, it would be violating California law. Dorso requested that the resolution be amended so that the selling of bonds could only go into effect after 60 days, giving his group enough time in the interim to collect signatures from Anaheim residents calling for a public referendum repealing approval of the bonds.

Dorso’s effort so far has been fairly successful, to the chagrin of some Anaheim supporters. The lawyer says that within the next two weeks he should have enough signatures to file for a referendum by May 2. The next time such a referendum could be scheduled is June 2012, thereby postponing an imminent move of the Kings. Anaheim could still line up the necessary $75 million from elsewhere, but Dorso says the “deal points” of any potential transaction would change.

Sacramento city attorney Eileen Teichert is advising the city in its

efforts to hang on to the Kings. The city’s mayor, Kevin Johnson, is a former NBA player. After the Kings concluded their season this week, Johnson flew across the country to meet league officials and executives in New York to pitch a rescue plan for the team. Johnson’s pledge includes more corporate sponsors, plans for a new arena, and even a potential new owner for the team in billionaire Ronald Burkle.

But the Maloofs reportedly have no interest in selling the franchiseto Burkle or any other group that comes forward to try and keep the team in Sacramento. Loeb & Loeb’s Zolke, who is advising the Maloofs, did not respond to a request for comment.

The Maloofs bought the Kings in 1999 and for many years the team was successful. But the team’s financial fortunes took a turn for the worse in recent years as the economic downturn left the Maloofs cash-strapped. (Earlier this year reports surfaced that the Maloofs were considering selling a controlling stake in one of their signature properties, The Palms Casino & Resort in Las Vegas.)

Dorso says there are other issues complicating a potential move of the Kings to Anaheim. Another franchise in Southern California would impinge on the territory of the Lakers and Los Angeles Clippers. Dorso says the Lakers have a lucrative television contract that contains a provision calling for it to substantially decrease in value if a third NBA team moves into the Greater Los Angeles media market.

“This is certainly an important issue for our community,” Dorso says, “and I just hope that I can help out in some way.”

The next two weeks will likely see a lot of work occur behind the scenes by various parties seeking to push forward or stymie a potential move of the Kings. The Am Law Daily has previously reported on lawyers seeking to preserve and acquire NBA franchises in cities like New Orleans and Louisville.

Source: http://amlawdaily.typepad.com/amlawdaily/2011/04/score041511.html




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