Sports and Economics: Kings Using City Money for New Stadium

The Sacramento Kings have been a struggling NBA franchise for the better part of a decade now. The team has not had very much success since the early 2000's when they were a perrenial playoff team. The team is now looking for a change to infuse some life into the squad, and are currently trying to build a new stadium in hopes of doing so. The Maloof brothers (pictured left) are the owners of the Kings, the brothers were in danger of having to move the franchise to Anaheim before last season. They were able to pull off a deal to keep the team in Sacramento and are now trying to get funds for a new stadium.

This Article from ESPN breaks a story that the Kings may be very close to making their new stadium hopes a reality. The Kings and the NBA announced that they have reached a tentative agreement to finance a new stadium. The proposed agreement says that the Kings will be using approximately $200-$250 million from the city of Sacramento to finance the $387 million stadium. The Maloof brothers are expected to contribute about $75 million, and also pay off a current $67 million load from the city of Sacramento. Another operator of the arena is said to contribute $60 million more. NBA Commissioner David Stern said he had a great experience working with the Maloof brothers, and was glad to get a deal done.
http://espn.go.com/nba/story/_/id/7621128/sacramento-kings-strike-arena-deal-stay-city

We spoke about sports and economics in class on 3/20 and 3/22. We spoke about how team owners look to the public for assistance with sports franchises. We spoke about how teams use public funds to construct and maintain facilities. We also learned that there are many arguments for using city money for constructing arenas such as, creating new jobs, the infusion of money into the local economy, and the attraction of other businesses. As always when there are arguments in favor of something there are some against it such as, the jobs only being seasonal, and discretionary money is limited. Coakley says on page 375, that the belief a city cannot have "major league status" unless they have a sports franchise is the major reason that teams are able to recieve public money for funding.