Barely a decade ago, the Kings were an elite NBA contender, with a packed arena and a richer payroll than the rival Los Angeles Lakers.

What went wrong? How did they become a bargain-basement franchise, possibly headed to Anaheim?

The answer goes beyond Sacramento's inability to build a new arena. It lies in an almost seismic shift in the NBA landscape.

The recession widened the gap between the NBA's haves and have-nots. A new breed of mega-wealthy owners outspent their competitors, including the Kings. Luxurious new arenas pumped fresh revenue into their teams, leaving others sputtering. And the NBA – unlike other sports leagues – did little to share the wealth, leaving teams like Sacramento further behind.

As the Kings stumbled on the court, and recession-weary fans and sponsors fled, Sacramento's challenges as a small-market team went from manageable to monstrous.

"The Kings have lost their mojo," said Andy Dolich, former president of business operations with the NBA's Memphis Grizzlies. "In a small market ... you have to be hitting on every possible cylinder, all of the time."

The Maloofs, who own the Kings, have until April 18 to decide the team's fate. They are declining to comment on their talks with Anaheim, which offers a nicer arena and a shot at the nation's second-largest TV market.

Joe and Gavin Maloof's silence stands in marked contrast to their courtside exuberance a decade ago, when NBA Commissioner David Stern called the Kings "the prototype team." He was referring to their up-tempo style of play but could have been describing their organization, too.

Despite the small market, the Kings enjoyed constant sellouts. They tied or surpassed the NBA average in revenue, according to Forbes magazine. They had the third-highest payroll two years in a row, HoopsHype.com reported.

But below the surface, there were cracks.

Rich team, poor team

Matt Parlow, a sports law expert at Marquette University, said small markets like Sacramento were particularly vulnerable to the recession. They had less cushion than the big cities – smaller fan bases, less TV money, fewer sponsors to replace the ones that left.

"The Great Recession has created a tale of two leagues," Parlow said. "We have the haves and have-nots."

The financial trouble for the Kings began in 2005, when a handful of sponsors pulled out, including Southwest Airlines. Among those defecting was Quest, a Sacramento tech firm, which gave up its luxury suite and sponsorship worth a total of $500,000 a year.

"The enthusiasm for the team was dramatically waning, and we could see that coming down the road," said Quest CEO Tim Burke.

The Kings' 354-game home sellout streak ended Nov. 6, 2007, a month before the recession started. Now, as they play to thousands of empty seats most nights, their payroll has fallen to just above the league minimum. Only eight teams generated less revenue last year.

The decline of the Kings has coincided with troubles for their owners. The Maloofs were labeled billionaires by Forbes in 2003, but they've been hit hard in recent years.

While their finances are private, a minority shareholder in the Maloofs' Palms Casino in Las Vegas said the casino is now worthless. Bloomberg News said the Palms could be taken over by creditors. The Maloofs denied that story and said the Palms' finances don't affect the Kings anyway.

Tough to compete

Still, the Maloofs are clearly not in the same league as some NBA owners.

These are people like Mikhail Prokhorov, the Russian multibillionaire who bought the New Jersey Nets last year. He's one of several ultra-rich owners new to the NBA since the Maloofs arrived. The Nets will soon move into a new $900 million arena in Brooklyn.

"It becomes a sport that requires real wealth," said sports-business expert David Carter of the University of Southern California.

For teams in smaller markets, it's become increasingly difficult to compete for top talent. The NBA has a salary cap to hold down costs. But it's a "soft cap," full of loopholes. Despite a recent dip because of the economy, salaries have risen by one-third over the past 10 years, to an average $67 million per team.

Instead of keeping up, the Kings have gone in reverse.

This year they'll spend $44 million on players – far less than before, half as much as the Lakers and the lowest in the league.

The belt-tightening has taken other forms. The Maloofs in 2009 laid off staff and folded the Monarchs of the Women's National Basketball Association. That year they were among several teams tapping a multimillion-dollar line of credit arranged by the NBA.

In this climate, it's easy to see why the Maloofs would focus on a new arena as a way to restore the team's fortunes. Seven other NBA teams have moved into new buildings in the past decade.

Posh arenas don't guarantee success. Memphis and Charlotte, for instance, take in less money than the Kings despite newer buildings.

But in 2009, when the NBA was scouting Cal Expo as an arena site, the Maloofs predicted a new arena could boost revenue by $13.7 million a year through "additional lower-level seating, premium club seats, and additional suites," wrote consultant Economics Research Associates.

That's a jump of more than 10 percent, and some experts say the new-arena effect could be considerably higher.

It's enough to turn the Kings purple with envy.

"The Maloofs go to a national NBA meeting and see what everybody else is generating," said former NBA executive Bill Sutton, an Orlando sports consultant. "The owners' performance in other markets is putting pressure on them."

Stern looks for fix

If they played a different sport, the Kings would get more aid from their league.

NFL teams share three-fourths of their revenue, including all the network TV dollars and nearly half their home-game ticket receipts, said economist and NFL consultant Scott Rosner.

Baseball, not quite as egalitarian, redistributes national TV money and one-third of each team's locally produced revenue. For some teams, it really adds up. The Florida Marlins in 2009 relied on shared money for 60 percent of their revenue, according to records obtained by sports news website Deadspin.com.

The NBA's stragglers don't get as much. The league shares its network TV money equally and offers a "revenue enhancement" pool of up to $6 million a year each to small-market teams.

It doesn't go far. In 2009, the New Orleans Hornets – a team so troubled it was recently taken over by the league – got just one-third of its revenue from shared sources, according to Deadspin documents.

Stern says he wants the NBA to share more revenue to stabilize the weaker teams.

It's part of the commissioner's broader push to overhaul NBA finances. He says the league is losing $350 million a year and must reduce player salaries – a stance that could lead to a work stoppage next season.

But a new economic model might not arrive quickly enough to keep the Kings in Sacramento.

It also might not arrest another trend. Star players are increasingly gravitating toward the rich, glamour teams, as when Denver's Carmelo Anthony got himself traded to New York.

Sacramento surely didn't show up in his deliberations.

"Obviously in a smaller market it's extra difficult to add the biggest names," said Matt Tolnick, a sports agent in Sherman Oaks. "You've had good teams get better."

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