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Anaheim seems big enough for the NBA

A move from Sacramento by the Kings appears workable to marketing experts. It's unknown if Lakers or Clippers will try to block it.

March 04, 2011|By David Wharton
  • Sacramento Kings fans show their support for the team, whose owners are thinking about moving the franchise to Anaheim.
Sacramento Kings fans show their support for the team, whose owners are… (Steve Yeater / Associated…)

It should come as no surprise that the Sacramento Kings want a little more time to contemplate moving to Anaheim, a potential shift in the NBA landscape that has been in the news this winter.

This week, the team received an extension on the deadline to apply for relocation. The Kings' owners — the Maloof family — have until April 18 to ponder a question that has been bouncing around the league for years.

Is the Los Angeles metropolitan area — with its population of 12 million-plus — big enough for three NBA teams?

The answer, according to various sports industry executives and experts, is a resounding "probably."

"It looks realistic," said AJ Maestas, president of the Navigate marketing firm in Chicago. "Not a great idea, but not awful."

The Clippers once toyed with the idea of taking up residence at what was then Arrowhead Pond. Now the Maloofs are negotiating with Henry Samueli, who owns the Ducks and operates Honda Center through an agreement with the city of Anaheim.

Any deal would require approval by a majority of the NBA's 30 owners. Lakers Coach Phil Jackson recently weighed in, saying: "I think we'd like to see [the Kings] stay there."

But neither the Lakers nor the Clippers have officially commented, and it remains unclear if they would seek to block the establishment of a competitor just 30 miles south of Staples Center.

The Kings' desire to relocate comes after prolonged attempts to secure a new arena in Sacramento. The league, for one, has grown frustrated by a lack of progress.

"We and they have tried very hard over the years to see whether a new building could be built," Commissioner David Stern said two weeks ago during his All-Star game news conference. "On behalf of the league, I said we are not going to spend any more time on that."

A move southward is tempting because, as research by Navigate suggests, more than 6 million residents in the Los Angeles metropolitan area have some interest in the NBA.

In Orange County alone, the estimated population of more than 3 million dwarfs metropolitan areas such as Indianapolis (1.8 million), Milwaukee (1.5 million) and Oklahoma City (1.2 million) that are home to NBA teams.

"Take a look at the fan base," said David Carter, executive director of the USC Sports Business Institute. "That gives you an awful lot of opportunity."

Fans south of the 91 Freeway might like the idea of shaving half an hour or more off their drive to attend a pro basketball game, Carter and other industry experts said.

Maestas points out that three NHL teams — the New Jersey Devils, New York Rangers and New York Islanders — share a metropolitan area but draw from distinct regions.

It also helps that Orange County has a median household income of more than $74,000, according to the latest U.S. Census Bureau figures. That compares favorably to Sacramento County's median household income of less than $57,000.

So a team in Anaheim could be appealing to sponsors and broadcasters.

"If you took Orange County and separated it out, I'm sure it would be one of the top television markets in the country," said Lee Berke, president and CEO of LHB Sports, Entertainment & Media in New York.

"You'd be able to attract advertisers," Berke said. "You'd have several regional sports networks to sell your rights to."

There are other potential revenue streams.

With NHL and NBA franchises under the same roof, Samueli could create his own regional TV network. Ideally, such networks feature teams playing at different times of year, but hockey and basketball coexist on MSG in New York.

Honda Center would profit by way of an escalator that boosts the value of the naming rights deal if an NBA team moves in.

The Maloof family, which owns the Palms casino resort in Las Vegas, could benefit too.

"Obviously they would love to cross-promote their Las Vegas property to Southern Californians," Carter said.

But there are potential drawbacks.

First, the Kings could face a hefty league relocation fee. The amount would be determined by the NBA's Board of Governors.

The team would also start at a competitive disadvantage in a market already cluttered with two existing NBA teams, two NHL teams, two baseball teams and pro football always lurking on the horizon.

Those other franchises might not be so welcoming.

While experts predict the Lakers would not be hurt much, the Clippers could be another story.

They have worked to cultivate an Orange County presence over the years, playing 35 games in Anaheim from 1993 to 1999, drawing an average of 14,738 fans.

Carter points out that Donald Sterling ultimately chose to stick with a known quantity in Los Angeles rather than chance developing an entirely new fan base down Interstate 5. That decision could come back to haunt him.

"There might be people in this market who are casual NBA fans and might be interested in sampling a new team," Carter said. "If you go to a couple of Clipper games a year, [the Kings] would have a chance to convert you as a customer."

The Ducks might also suffer because fans accustomed to visiting Honda Center have only so much disposable income.

"There are not going to be a lot of people who will hold season tickets for both," Maestas said.

Neither Samueli nor his team would comment.

It figures to be another six weeks before the Kings make their intentions known. But even if they don't come to Anaheim, experts wonder if another team eventually will.

"It's a very viable idea," Carter said. "I think Anaheim is an extremely compelling NBA market."

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