Some observers doubt financial impact on Sacramento if Kings leave
Published: Tuesday, Apr. 5, 2011 - 12:00 am | Page 1A
Sacramento officials issued a dire warning about the Kings last week, saying the team's likely departure for Anaheim could cost the area's struggling economy $188 million a year.
The reality is more complicated.
Certainly some restaurants and bars would suffer if the Kings leave, particularly those near Power Balance Pavilion. Charities that benefit from the Kings would lose out. So would companies like Burkett's office supply company, which sells equipment and furnishings to the team.
"We're still holding out some kind of minute hope that things will fall apart for them in Anaheim," said Burkett's president Randy Mael.
But some experts say the economic value of a sports team to a community is vastly and routinely exaggerated. They say most of the money spent on the Kings – for tickets and more – would simply recirculate through the Sacramento economy in other ways.
"You don't sit in your house. You go to the movies, go bowling, you go out to restaurants," said Dennis Coates, an economist at the University of Maryland, Baltimore, who has studied sports franchises' impact.
Others disagree. Lon Hatamiya, a Davis economic consultant, said fans would pocket some of the money they spend on the team.
"It's not like we have a multitude of other entertainment opportunities around here," said Hatamiya, a Cabinet secretary under former Gov. Gray Davis.
Hatamiya testified in court for the city of Seattle when it tried to keep the NBA SuperSonics from moving to Oklahoma in 2008. It was his estimate of the team's impact on Seattle – $188 million a year – that was cited by Sacramento officials last week.
Sacramento used his testimony to try to prevent the Anaheim City Council from approving a $75 million bond measure to facilitate the Kings' move. The argument: Anaheim's actions would cause restaurants and other businesses to close in Sacramento, creating blight. That would violate state law.
Anaheim ignored the threat and approved the bond deal. The Kings' owners, the Maloof family, have until April 18 to ask the NBA for permission to relocate.
If the team goes, one of the biggest impacts is probably the hardest to measure: the effect on the city's image.
Some experts say losing the Kings would hurt Sacramento's ability to attract corporations considering moving to the region.
"The presence of a major league franchise is an important branding quality for a metropolitan area," said Jack Boyd, a corporate relocation consultant from New Jersey. He said the loss of the team might harm Sacramento's reputation.
But Barbara Hayes, executive director of the Sacramento Area Commerce and Trade Organization, said the Kings aren't a huge factor when corporations make inquiries about the region.
"It's on the list, but it's on the bottom of the list," Hayes said.
If any place figures to get clobbered by the Kings' exit, it would be Natomas, the team's home since relocating from Kansas City in 1985.
"The Kings were the original Natomas neighbor," said City Councilwoman Angelique Ashby, who represents the area. "Everything built out there was built around the notion of an arena being there for the Kings."
Natomas has grown up since the Kings arrived, developing its own retail and office scene. But the area has been stung by the weak economy and has the added burden of a moratorium on construction, sparked by flood concerns.
The loss of the Kings looms large for restaurants like Malabar American Cooking, which does a big business before and after home games.
"We staff up for it," said partner Bill Keliher. "It's good money; you know you're going to be busy."
A Kings home game means extra work for six to eight waitresses, kitchen staff and others.
Natomas restaurants would continue to feed off concerts and other arena events. Still, the loss of 41 home games would be felt.
"Natomas is not going to dry up," Keliher said. "But it's going to be a while before there's a force that drives people to the area."
The Kings employ 773 workers, including 239 full-time. Also, an unknown number of employees work in food and beverage concessions for a contractor, Levy Restaurants of Chicago. Levy didn't return calls seeking comment.
It's hard to say how many jobs would vanish if the team goes. Some employees would stay behind to operate the arena for ice shows, tractor pulls and so on.
The Kings have donated more than $17 million to area charities in the past decade, according to the team's website. Beneficiaries range from an after-school arts academy to Little League baseball.
Burkett's, the office supply company, has multiple ties to the Kings. It pays a fee so it can promote itself as a Kings corporate partner.
"To be able to put their name on our website, that builds credibility," Mael said.
Burkett's also has a contract to sell office equipment to the team. In return for a discount, the company gets two season tickets, 10 rows off the floor. Burkett's uses the tickets for rewarding employees and "cementing client goodwill," Mael said.
Another Kings partner, Cache Creek Casino, rents a luxury suite at Power Balance for entertaining customers and others. What happens if the team leaves?
"I don't think we've had that conversation fleshed out yet," said casino spokesman Mike Traum.
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