Kings President of Business Operations John Rinehart informed employees Monday that more than one-third of the team's full-time workers will be furloughed for four months beginning June 1 as a result of the coronavirus pandemic.
Rinehart made the announcement in an email to employees, a copy of which was obtained by The Sacramento Bee. Rinehart explained the sports and entertainment industries were hit hard by the suspension of NBA play and live events at Golden 1 Center, resulting in "an unprecedented impact on our bottom line" and "significant fiscal uncertainty about the future."
"Since all live events have been cancelled or postponed in the arena for at least the next several months, we need to reduce our operations to meet our current economic situation," Rinehart said in the email. "We delayed this for as long as possible but, unfortunately, the harsh economic realities facing the live sports and entertainment industries were just too much to overcome."
A league source told The Bee the furloughs will impact about 100 employees representing approximately 34% of the team's full-time workforce. Essential basketball operations functions, including front office, health and performance, and scouting/analytics positions, will not be impacted, the source said.
"Throughout our evaluation process, our top priority has been to preserve jobs while maintaining pay and benefits for as many people as possible, for as long as possible," Rinehart said. "In late April, we committed to paying all full-time employees through the end of May and we will keep that promise. However, due to the sudden and severe financial impacts to our business, I regret to announce that effective June 1 we have made the difficult decision to implement a four-month furlough for a portion of our workforce."
Rinehart said all furloughed employees will continue to receive full medical benefits and the team has amended its retirement plans to ensure greater access to funds "during this time of need." Impacted personnel were expected to receive an appointment by 5 p.m. Monday for an individual online meeting with human resources and direct supervisors to discuss the next steps.
"You are the lifeblood of our organization � your hard work brings the joy of sports and entertainment to life for our fans and our community, and you have each helped us to achieve incredible results together," Rinehart said. "As soon as our business stabilizes, our goal is to look for swift ways to bring back impacted team members once we resume normal operations. I am confident that we will get through these tough times and I firmly believe brighter days are ahead. We cannot thank you enough for all that you have given to the Kings."
The NBA suspended its season March 11. A league source recently told The Bee the coronavirus shutdown has already taken a huge financial toll on the Kings, who are bracing for what might be tens of millions of dollars in uninsured losses.
"We are facing an extraordinarily difficult moment for our organization and over the past several weeks we have taken steps to implement cost reductions," Rinehart said. "Executives across the company are taking substantial salary reductions and forgoing annual bonuses, we have frozen all non-essential spending and hiring, and are eliminating the company match for the 401(k). Ownership is also committed to personally funding the essential functions of the business so that we can ensure the long term viability of the organization."
