While Los Angeles Clippers owner, Donald Sterling, dominates the headlines, there’s a much more compelling NBA storyline for investors.
The Golden State Warriors recently announced plans to move from the Oakland Coliseum to a new facility in San Francisco for the 2018 season.
Great news for basketball junkies by the Bay.
Not-so-great news for municipal bond holders in Oakland.
Why? Because $140 million in bonds were issued to finance improvements to the Warriors’ home court, Oracle Arena, back in 1996.
The bonds helped improve seating, scoreboard and other “arena experience” endeavors.
Half of those bonds will remain outstanding once the team moves, as reported by Bitvore.
You see, bond payments are made from the Warriors’ ticket sales, television rights and merchandising revenue.
That obligation would fall on the City of Oakland and County of Alameda when the team moves, prompting San Francisco Chronicle columnist, Chris Johnson, to say…
“As an Alameda County resident, I want to personally thank the front office of the Golden State Warriors for the lovely parting gift they plan to bestow on their East Bay fans, supporters and landlords…
“They are truly a classy organization.”
Do you see the hypocrisy in all of this?
The commissioner of the NBA, Adam Silver, took swift action in barring Donald Sterling from the league for his horrendously inappropriate comments.
Yet 350 miles north, it’s perfectly acceptable to dump $60 million in debt on a loyal fanbase. A fanbase in no fiscal position to carry the load, that is!
(The Warriors owe roughly $7.4 million annually until 2027.)
So isn’t the NBA robbing Oakland of, say… 1,200 new school buses? Or the salaries of 1,800 additional teachers?
Commissioner Silver, no doubt, has a team of pricy lawyers ready to stick it to Oakland should the city choose to fight. Rich people love to protect their playground in such ways.
When you signed up for Wall Street Daily, I vowed to deliver the truth. And sometimes the truth really hurts.
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No worries, though. On Monday, I’ll break even more shocking news from the bond market. Only this time, there’s an incredible upside for investors.
Want to continue the conversation about the Warriors? Join me on Twitter @RWilliamsWSD.
Onward and Upward,
Founder, Wall Street Daily
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But there is one bright spot in the mortgage market…
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