Kansas Citians have long been considered ‘basketball aficionados.’ With the inventor of the game coaching only 40 miles west in Lawrence, KS, Kansas City has always been a basketball city. The City has strong ties to the three major Division I college programs in close proximity; Kansas, Kansas St. and Missouri. Kansas City was also home to the ABA/NBA franchise, the Kansas City Kings, from 1972 – 1985, where the team encountered limited success. The Kings enjoyed their most success in a 3 year span stretching from 1979 to 1981. In the 1978 – 1979 season the attendance at Kemper Arena averaged 10,789 fans, the only time during the team’s tenure in KC that the average attendance would be in five figures. The Kings made the NBA Playoffs in both the 1979 – 1980 season and the 1980 – 1981 season, where they would eventually fall in the Western Conference finals. After the improbable Playoff run, the two leading scorers were plucked from the team as Otis Birdsong was traded to the NJ Nets, and Scott Wedman signed a free agent deal with the Cleveland Cavaliers.
Prior to the 1983 – 1984 season, the Kansas City Kings were sold to a Sacramento group of investors for $10.5 million. The team remained in Kansas City for the time being and snuck into the Playoffs as an 8-seed as the NBA expanded from a 6 to an 8 team format. The Kings would be swept by the Lakers in the first round, and their fearless leader, Coach Cotton Fitzsimmons, would resign to take a job with the San Antonio Spurs. This left the team in disarray, losing 8 of their first 9 games to start the 1984 – 1985 season. The team would continue to struggle, and the owners announced midseason that they intended to move the team to Sacramento after the season. After the announcement, the team would often play in front of crowds of less than 4,000 fans. The Kings would finish the season in last place and the NBA Board of Governors voted unanimously to allow the team to relocate to Sacramento.
In 2004, the City of Kansas City, MO struck a deal with AEG to construct and operate a new facility, the Sprint Center, in downtown Kansas City, MO to anchor the new Power & Light District, a $850 mil project. AEG President , Tim Leiweke, promised the arena wouldn’t go empty, “I can assure you, there is going to be an anchor tenant,” Leiweke told The Kansas City Star in May 2004. It is now 2011, and there is still no anchor tenant. AEG has “tried” to bring in anchor tenants, the Pittsburgh Penguins, the Seattle Sonics, the New Orleans Hornets, and the Sacramento Kings. AEG offered the Penguins the “whole pie,” a rent free lease and 50% of all revenues, which the Penguins turned down before striking a new deal in Pittsburgh. A lopsided deal like this would’ve been very detrimental and many people were thankful the deal wasn’t accepted. The arena remained flexible and had the ability to schedule the best concerts/performance, and host various sporting events, CBE Classic, Big XII tournament, and NCAA tournament games.
The building cost $276 million to construct. AEG put up $54 million in cash, which is all going to be paid back, with interest. The National Association of Basketball Coaches (NABC) put up $10 million. The city is financing the rest through taxes on hotel rooms and rental cars. The city pays an annual debt service of about $13.8 million a year. So far, the hotel and car rental fees have exceeded projections and have allowed the city to meet their required payments. AEG takes 16% off the top of any Operating Profit generated at the arena. The remaining balance is then split between the City and AEG. An anchor tenant would have an effect as far as pulling down the available revenues because a portion of those revenues would then go to an anchor tenant.
In order for a team to relocate to Kansas City, a group of investors would have to be willing to purchase a team and begin the relocation process. The NBA owns the New Orleans Hornets after a buyout was completed in December of 2010. The NBA remains committed to making a franchise work in the city of New Orleans and has no intentions, at this time, to relocate the team. The Maloof brothers, owners of the Palms Hotel & Casino in Las Vegas, own the Sacramento Kings. The brothers want the city to begin construction on a new arena in Sacramento, which hasn’t happened. The brothers want to move the team to Las Vegas, which wouldn’t sit well with the NBA Commissioner due to the gambling laws. Would the brothers be willing to sell the team if the city doesn’t approve financing for a new arena or they aren’t allowed to relocate to Vegas? Many people believe they would. Would there be a group of investors that would be willing to buy the team and relocate to Kansas City? Many people believe there wouldn’t be. If an anchor tenant is given a sweetheart deal, like the one proposed to the Penguins, would the arena be able to generate enough revenue for the city to cover their debt service payments? Most likely not.
The newly elected mayor, Sly James, recently came on Nick Wright’s radioshow and said he didn’t think the Sprint Center would have an anchor tenant anytime soon. With the type of success the Sprint Center has enjoyed thus far, he didn’t think it would make sense to bring in an anchor tenant. Would Kansas City residents be willing to support an average NBA franchise? AEG doesn’t want an anchor tenant in the Sprint Center either. AEG promised an anchor tenant in the initial planning phase knowing this would be the only way their cash cow, the Sprint Center, would be built. Kansas Citians will just have to settle for college basketball and an exhibition NBA game every year, quite the consolation prize to another NBA team.
Boom! Used again.
Kansas City was “Mike Anderson’ed”…
Nicely written Matt.