Sunday night news broke that the Maloof family have agreed to terms to sell the majority of the Sacramento Kings. The deal will most likely take the Kings to Seattle.
The Maloof family and minority owner Bob Hernreich have reached an agreement to sell its 65 percent stake in the NBA’s Sacramento Kings to a group led by Seattle hedge-fund manager Chris Hansen and Microsoft CEO Steve Ballmer, the NBA announced Monday.
The Maloof family is probably known as much for owning the Palms casino as they are for owning the Kings. Since they owned both properties wagering on the Sacramento Kings at Palms wasn’t possible due to potential conflict of interest between businesses.
When the Maloof family sold the majority of Palms to TGP Partners this banished the Boston Celtics from their sportsbook since TGP has interest in Caesars Entertainment. In this deal for the Sacramento Kings the Maloof family will still have a tiny ownership of the Kings which means that the Nevada Gaming Commission will likely see that there is still a potential conflict of interest.
Don’t expect to see the Sacramento Kings available for wagering at Palms until the Maloof family totally divests its entire stake from the Kings or Palms. In other words don’t look for any Sacramento Kings action at Palms any time soon.
Good thing Matt Goss isn’t at Palms any longer or George Maloof may not be able to tell people that he’s the Chairman of the board a la Frank Sinatra. George Maloof sheds (spins?) a little more information about TGP Partners owning 98% of the Palms in a Vegas Inc. interview today.
What about all of the speculation that Caesars Entertainment is taking control of the Palms?
When TPG got involved (with Caesars Entertainment) a couple of years ago, speculation was now that they own part of Caesars Entertainment, Caesars would own part of the Palms. But that’s not true. It’s not at all true. It’s never been true…..
….Do you still have full authority to run the Palms?
I’m in a management agreement, you could say, as chairman of the board of the Palms. I still have that authority.
I’m a skeptic by nature and while the Maloof’s have run Palms since they built it I still find it hard to believe that TGP won’t have Caesars take some part of management of the property at some point.
It would be really interesting to see the Maloof face working with the Caesars brand. It doesn’t mix today, but it may make both stronger in the long run. Maybe he chose the words “Chairman of the board” as some kind of a subliminal message (I know that’s a stretch).
Last week I passed on info that Palms, in Las Vegas, received an injection of cash to help settle some of their debt problems. Just a few days after the report that TGP Partners injected some money we all learn how much they and the Maloof‘s actually own.
The Maloof family will soon own just 2 percent of the Palms Casino, its trendy Las Vegas property, according to regulatory documents filed in Nevada….
….In an interview late Thursday, Maloof said the family could regain a more significant share – up to 20 percent – under buyback options granted by the creditors who are taking control…
….The casino’s creditors, investment firms TPG Capital and Leonard Green & Partners, will own 49 percent each.
The Maloof’s seem to be only part of Palms in name, with a chance to still only be a part of it in name. If each partner gives up 9% interest so the Maloof’s reach 20%, they’re still the smallest shareholder.
I’m not sure that Caesars Entertainment running the show at Palms will lead to profits, but it still seems as if it’s the next move when looking at TGP Capital’s (and Leonard Green & Partners) partners.
Yesterday Palms got a little help with their finances in exchange for controlling interest of their casino, hotel and spa in Las Vegas when the announced a partnership with TGP Capital (the folks who helped Caesars go private a few years back) and Leonard Green.
The deal between TPG Capital and the Palms has been rumored for months but not confirmed until today. In January, Bloomberg reported that the firms had acquired most of a loan for the casino last year and sources close to the deal said the company may take an equity stake in the first quarter as part of the restructuring.
TPG Capital, along with Apollo Global Management, took Caesars Entertainment (then Harrah’s Entertainment) private for $30.7 billion in January 2008.
Nothing in the initial releases points to takeover by Caesars, but it has been speculated for a while (initially by Steve Friess and The Strip Podcast) that a sale/partnership/takeover could end up with Caesars taking control of the property.
In this case it seems to reason that the money guys will bring in their favorite casino partners, Caesars, to help run day to day operations.
Of course, this opens the question of how soon will the “loosest slots in town” and great video poker pay tables switch to the mediocre Caesars numbers uses. I think we have time here, but get ready.