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Sources: Sacramento Kings may move to Virginia Beach, arena deal in the works

Updated: August 29, 2012 - 12:55 pm

Posted: August 23, 2012

By Philip Newswanger and Bill Cresenzo
The public relations firm handling the publicity for a proposed Virginia Beach sports and entertainment arena has registered the Internet domain names and
Meridian Group of Virginia Beach scheduled a press conference for Comcast-Spectacor following the media giant's Tuesday presentation to the Virginia Beach City Council.
Elizabeth Lester, the president of Launch Interactive, a division of Meridian Group that handles the technological and interactive marketing duties at the company,  registered the names earlier this month, according to databases.
Terry Kelley, vice president of Meridian Group, called the registration "just the normal course of business."
"We have grabbed many domain names in the event of getting out ahead in case this happens,” Kelley said.
Kelley declined to disclose what other sports-related domain names the firm has registered.  A check of other Virginia Beach and NBA-related domain names - ones preceded by "VB" - show that they are available.
Meridian Group was hired by Dallas firm HKS Inc., a consultant hired by the Virginia Beach Development Authority to study the feasibility of a sports franchise and arena in Virginia Beach.
The president of Philadelphia-based Comcast-Spectacor was in Virginia Beach Tuesday to propose building a pro sports arena.
Peter Luukko told the Virginia Beach City Council that his company will seek to move a professional team to an 18,500-seat arena his company wants to build in the resort city, but did not name a team.  Sources have said the Sacramento Kings could be coming to Virginia Beach, but Luukko said he had not been in any talks,  formally or informally, with the Kings.
Virginia Beach Economic Development Director Warren D. Harris called the proposal an “incredible opportunity” for the city, but a city councilman, Bill DeSteph, questioned how the arena, which is estimated to cost up to $350 million, would be paid for. Comcast’s marketing arm would sell corporate sponsorships, box seats and naming rights that, along with revenue from events, would ultimately pay for the arena, said Luukko, pointing to the success of the Virginia Beach Farm Bureau Live Amphitheater, operated by Live Nation, another partner in the proposed arena deal, as an indicator that a large arena would do well in the Hampton Roads market.
 A deal between the owners of the Sacramento Kings - the Maloof family - and the city of Sacramento for a $391 million entertainment complex fell apart three months ago and it has been reported that the owners are looking for a city for their franchise.
Comcast Spectacor will guarantee a 25-year lease on a new arena for naming rights and for broadcasting the games. Comcast owns NBC, Live Nation and Global Spectrum, which operates the Ted Constant Convocation Center at Old Dominion University in Norfolk and the Sandler Center in Virginia Beach. Live Nation operates the Farm Bureau Live amphitheater in Virginia Beach. 
In addition, the Atlantic Coast Conference has agreed to place Virginia Beach on its list as a future venue for college ACC conference tournaments.
The new arena would be built across from the Virginia Beach Convention Center on 19th Street. 
“Comcast, Live Nation and Global Spectrum have come to the city,” Virginia Beach Mayor Will Sessoms said. “They would guarantee us a professional sports team" if the deal goes through.
He said the arena would draw people to the area year round. He would not confirm what team could move to the area, but added that a related project, a multi-star convention center hotel, “would probably be built by owners of the team.”
“I think the greatest thing coming out of this is that Comcast and Live Nation are for real,” Sessoms said.
Kevin Johnson, the mayor of Sacramento and a former NBA standout, has tried to keep the Kings in his city. The Maloofs have said they no longer trust Johnson and don’t want to work with him, according to ESPN in April, prior to the deal collapsing. 
“You can’t do a deal with somebody you don’t trust,” George Maloof Jr. said, according to The Sacramento Bee. “I don’t trust him.” 
When contacted, Maloof would not say whether his company was in talks with the city of  Virginia Beach.
“We have been approached by several cities over several years about moving the Kings and we will not comment other than that,"  he said.
Amid negotiations over the new entertainment complex in Sacramento, elected officials representing that city have criticized the Maloofs, saying they’ve turned their backs on the city late in the game, an ESPN article said. 
Chris Lehane, executive director of Think Big, the committee formed by Johnson to retain the Kings, compared dealing with the Maloofs to dealing with one of the world’s most inscrutable and widely criticized governments. Lehane, who stepped down from his position in June, at one point, asked U.S. Attorney General Eric Holder to investigate the Maloof brothers, according to a USA Today report. 
Eric W. Rose, the Maloofs’ spokesman, said: “It is becoming clearer that the foundation of Think Big is built on fabrication and deception. The name of the organization should be changed to Think Big Fraud,” the USA Today article said. 
Late on Aug. 23, Rose sent Inside Business this statement, which he had sent to other media outlets earlier in the day:
"The Kings have been approached by numerous cities interested in buying the team and relocating it. We're not going to discuss which cities have approached the team and we're not going to comment on every rumor. The sole focus of everyone within the Sacramento Kings organization continues to be to put a winning team on the court as we look forward to what promises to be an exciting 2012-13 NBA season."
The Kings have played at the Power Balance Pavilion, the Kings’ home since 1985, formerly known as ARCO Arena. The Maloof family has complained that the arena wasn’t suitable and demanded a new entertainment complex from Sacramento. The proposed city-owned complex would have been funded mostly by issuing a parking lease to a private vendor. Anschutz Entertainment Group would have been the operator.
The Maloof family also owns a stake in the Palms Casino Resort in Las Vegas as well as Maloof Productions and Maloof Music.
Hampton Roads has sought professional league sports in the past including major league baseball, hockey and the NBA. In the late 1990s, Norfolk almost became home to a National Hockey League team, but the expansion team ended up in Raleigh.
George Shinn, the owner behind the hockey league team, also considered Norfolk as a site for the Charlotte Hornets in 2002.
The team ended up in New Orleans.
In 2003, a group in Norfolk sought to bring the Montreal Expos to the area. Instead, they became the Washington Nationals.


About the Maloofs

The Maloof siblings – George Jr., Joe, Gavin, Adrienne and Phil – own the KIngs. From New Mexico, the family began building its business when it started distributing Coors beer in the 1930s. The family’s patriarch, George Sr., died in 1980.
The matriarch of the family, Colleen Maloof, is the chairman of the board of the Maloof Cos. and the trustee of the Maloof estate.
George, Gavin and Adrienne are the most high-profile of the clan, appearing in music videos and on television shows, like Donald Trump’s “Celebrity Apprentice.”
“George (Jr.) is the leading force behind the building and operation of the hottest property in Las Vegas, the Palms, which is owned by the Maloof family, and has become one of the most sought-after destinations in the entertainment capital of the world,” his biography on states.
His brother, Joseph Maloof, is the president of Maloof Cos. and oversees a workforce of 3,500. Phil Maloof is a former senator in New Mexico and is executive vice president with Maloof Cos. Adrienne Maloof-Nassif heads the marketing and advertising end of the Maloof Cos. She also appeared on “The Real Housewives of Beverly Hills.” Reports say she is worth $300 million. Gavin Maloof is vice chairman of Maloof Cos. He became the youngest owner and operator in professional sports when he became owner of the Houston Rockets when he was 24.
About Comcast
Comcast, founded in 1963 and based in Philadelphia, is best known as the country’s largest cable television, phone and Internet service provider. It reported second quarter 2012 revenues of $15.2 billion and revenues of $30.1 billion for the first six months of 2012. The company owns  NBCUniversal and a division called Comcast Spectacor, which owns and manages sports and entertainment arenas across the country, including the Wells Fargo Center in Philadelphia and the Ted Constant Convocation Center in Norfolk. Comcast Spectacor is also the parent for several arena-related companies  that provide food, vending and ticket sales services and also owns the Philadelphia Flyers, a National Hockey League Team.
What it could mean for Virginia Beach
If the deal goes through, a sports arena and a major league sports team such as the NBA’s Kings could be the catalyst that sparks several projects that have been in discussion for Virginia Beach over the last few years. Such projects include:
• Construction of a headquarters hotel for the Virginia Beach Convention Center. City officials have said a headquarters hotel will increase the number of groups that would come to meet at the center.
• An entertainment complex at the old Dome site. Officials have been working to bring in an entertainment venue to help the tourism industry as well as enhance the quality of life for local residents.
• Expansion of light rail from Norfolk to Virginia Beach. The city has a referendum on the November ballet on light rail expansion. Property that the city owns – tracks once used by Norfolk Southern – are across from the convention center, where plans are expected to be announced for a sports arena.
• Development of Rudee Inlet has been a long-time goal for the city.