The arena deal has met its demise.  Again.

Following six hours of talks over the previous two days, Sacramento Mayor Kevin Johnson and the Maloofs concluded that an agreement to build a new downtown arena couldn’t be reached.

“We listened and I think it became clear that our differences are irreconcilable,” said a dejected Mayor Johnson to reporters at City Hall.  “And that’s a little bit disappointing.”

The Maloofs did not address media after today’s meetings and instead issued the following statement through their spokesperson Eric Rose:

This morning, at Mayor Kevin Johnson’s request, the Mayor and representatives of the Kings met for a second day of informal talks at City Hall and could not reach an agreement. At this time no further meetings with the City are scheduled.

The Kings will continue the operations of the organization and building on the franchise’s young nucleus of players.

Talks between the two sides were revisited last Friday after Johnson flew down to Las Vegas to meet with Sacramento Kings’ co-owner George Maloof.

UPDATE (3:30 pm): KFBK reporter and Cowbell Kingdom contributor Rob McAllister caught up with George Maloof.  His comments about the failed arena deal follow after the jump.

UPDATE (6:25 PM): Through spokesman Tim Frank, the NBA issued this statement to Cowbell Kingdom on the latest round of failed arena talks:

We are disappointed for the city, its businesses and the supportive fans of the Kings, as well as team ownership, that this transaction, which we thought was fair, has been abandoned. The Kings had the right to do that, as well as the right to continue at Power Balance Arena.

After the jump, some notes and quotes from Mayor Johnson, as well as a link to the audio of the press conference in its entirety.

  • “Our goal was to determine if we could get beyond these irreconcilable differences.  And it became clear that the best interest in the city and the best interest of the Kings’ ownership was not in alignment when it came to a new entertainment and sports complex downtown.”
  • Did the Maloofs discuss whether they would keep the team in Sacramento or move to another city?  “You would have to ask them, but I think it’s very clear that if you don’t want to stay downtown or be part of a new facility, then they certainly can stay out at Power Balance and do that.  I think there’s obvious things that will come to mind for people that ask the question.  Will they relocate or sell at some point?  That’s not something I can answer those are obviously the other scenarios that can be considered.”
  • “The economics of it for them were very difficult for a variety of reasons.  Debt is real – we know that.  And there’s a host of issues that you guys all know what they are.  But they should address that.  We did our part and ultimately it wasn’t enough and I think that’s very disappointing to so many people who worked so hard.”
  • The Mayor on whether the Maloofs made any concessions on their position: “I would say, oversimplifying it, I don’t feel there was real give for what we felt we needed.”
  • Johnson smiled as tempered his emotion when he talked about the Maloofs’ unwillingness to put down collateral on a new loan: “There’s no frickin way,” he said, covering the podium mic with his hands. “There’s no way we can do anything as a city without adequate collateral.  That’s just a non-starter for us.”
  • Is there anything he’d do differently? “We’d have gotten things in writing in Orlando.  That’s what we would have (done) different.  We would not have walked out without some signatures.  A handshake and a concept would not have been enough, knowing what I know now.  That would never happen again.”
  • With the exception of the Kings, Johnson noted that every party involved (the NBA, AEG, the city) believed in this deal. “When you have the best in this business looking at it and all agreeing that this makes sense that it’s not too high, but it’s in a way that is something that’s doable, and another party is not willing to accept and embrace those, there’s not a whole lot you can do.  And that ultimately is where we ended up.”
  • Johnson is confident that the NBA still believes in the Sacramento market.  “I think the league has shown a commitment by the effort and involvement and their level of engagement in this.  I mean this is unprecedented.  Short of owning a team like they did in New Orleans, I don’t think there’s an example where they’ve been this involved.”
  • “The Maloofs are operating under a different kind of model than other teams do in the league.  And I think that’s where the challenge is.”
  • “I’m disappointed for Sacramento.  I’m disappointed because when you do all that you can, normally the reward is usually a victory.  I think our community, we were playing to win.  We really were.”
  • What’s next?  “We don’t know what’s going to happen.  We know that this door is closed.  We know that we want to take the days we have remaining to solve our budget issues on one hand.  But we’ve got to look at Plan B and Plan B is can we go forward with a downtown facility that’s consistent?  Would AEG be willing to part of a model where they have the Sprint Center?  Does it make sense for them from an economic standpoint?  Is the financing of that deal doable?  And legally can we do it?  We need to look at all those options.”

Audio (via Reuters’ Deputy Social Media Editor Matthew Keys)


Comments from George Maloof on the recent string of failed talks