Could Golden State Warriors Bad Press For Oakland, Muni Bonds, Trigger Lawsuit?

The feeling here is the Golden State Warriors event announcing plans to build a new arena while in the not-yet-paid-for Oracle Arena could have set the climate for a lawsuit. Basically, by all but completely dissing Oakland in stating their love for San Francisco and implying that San Francisco had better leadership and a more desirable venue than Oakland, not to mention Warriors Co-Owner Joe Lacob saying that the “Shoe would drop” because Oakland has three sports teams, would seem to open the door for Oakland’s standing as a bond issuer to be negatively impacted.

In other words, any future or even current Oakland bond rates may be devalued just by the bad press caused by the Warriors, and that press could impact the Oracle Arena bond issue. None of this points to a default situation, but just that Oakland’s financial image is hurt by the Warriors current actions. It’s harder to issue a bond that would be well-valued with the Warriors Owners making statements like the ones in this video:

I think the Warriors overplayed their hand here.

Stay tuned.

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