EN ROUTE TO NEW YORK – The Los Angeles Kings are two wins away from their second Stanley Cup in three years. And depending upon whom you believe, they’re on the verge of being sold.
If you believe those in the hockey industry who keep tabs on such things, the Kings are for sale. But that should come as no surprise. The Kings are one of those teams that perpetually seems to be for sale from its parent company (AEG) even when there’s little or no outside interest in buying them. If you believe AEG chief executive officer Dan Beckerman, who called a recent report in the New York Post that the Kings are for sale “appalling,” well then the Kings aren’t going anywhere.
The truth probably lies somewhere in between. While the Kings might not be for sale and AEG might not be looking for buyers, it’s not a stretch to suggest the company would sell the Kings if there were interest.
And according to one person close to such matters, there actually is an interested buyer. Well, sort of. And it’s, get ready for this one, reportedly former Microsoft CEO Steve Ballmer, who recently purchased the Los Angeles Clippers for $2 billion. Ballmer, who was spotted sitting and chatting with Kings president of business operations Luc Robitaille at Game 6 of the Western Conference final, isn’t completely keen on buying the Kings, according to our source, but might have to take them as part of a much bigger transaction.
The speculation surrounding Ballmer is that, according to our source, is in negotiations to purchase the Staples Center from AEG and the L.A. Arena Company (a subsidiary of AEG) for a price tag of about $1 billion. But our source tells us that AEG would only sell the Staples Center if the Kings were also part of the deal. That would push the deal to as high as $1.5 billion. AEG owner Philip Anschutz tried to sell AEG in its entirety two years ago, but could not find a buyer for the price tag of between $8 billion and $10 billion. So the notion that AEG might sell off its assets piecemeal makes some sense.
That would mean Ballmer overpaid for both the Clippers and Kings, but if they’re rolled into an ownership group that also owns the Staples Center, their value would certainly rise. One of the reasons the Kings don’t make any money, and in fact lose millions each season despite having a string of 119 sellouts as of Game 2 of the Stanley Cup final, is that despite the fact they’re owned by the same company that owns the Staples Center, it is a tenant in the building.
(As an aside, winning Stanley Cups and having a well-run organization are all well and good, but they don’t have much bearing on the actual value of the franchise. More than anything else, revenues drive up franchise values and the Kings don’t have enough of those. See Maple Leafs, Toronto.)
If Ballmer were going to buy the Clippers for such a high price, it would make sense for him to own the building as well and not be a tenant. And if that means buying the Kings as part of the deal, then it might make sense.
Speaking of franchise values, NHL commissioner Gary Bettman said at his annual state of the union media conference prior to Game 1 of the Stanley Cup final that if the Clippers are worth $2 billion, there are plenty of NHL teams worth that or more. He wasn’t actually saying there are teams worth $2 billion because there are not, he was referencing it in terms of the Clippers sale. Just last year, the majority stake of the Maple Leafs Sports and Entertainment conglomerate – that also includes the Air Canada Center, the Toronto Raptors, Toronto FC and the Toronto Marlies – was sold for just $1.32 billion. That amount purchased 79.57 percent of the company, which would place the value of the entire company at just $1.6 billion.
Keep in mind that much of this is speculation at the moment. But whether or not the Kings are sold anytime after the Stanley Cup final, it’s probably safe to say the reports of them being on the market are more than just idle chatter.