The Sprint Center an "Unintentional Experiment," and No New Expansion

The Kansas City model?

Here are a few links to check out from over the past few days:

Sacramento Bee: Mayor Kevin Johnson still wants Sacramento railyard complex

KC Star: NBA, NHL commissioners rule out expansion

Newsday: NHL head Bettman: Islanders need new home

First thing's first.  An interesting article from the Sacramento Bee of the arena situation in that city.  If you don't know what is going on there by now, basically the Sacramento Kings are run a problematic ownership group that doesn't seem to want to sell the team, but they don't do much for the success of the franchise (the Maloofs -- I urge you to check out the "Maloofs' Key Issues" bullet points just to the right of the article).  So, Sacramento mayor, Kevin Johnson, is taking matters into his own hand to build a new arena for the city, team or no team.  How will they get this done?  By following the "Kansas City model."

The Sacramento Kings had been expected to serve as tenant in a proposed $391 million arena in the downtown railyard before pulling out of the deal last week. Members of the Maloof family, which owns the team, have said they are committed to staying in Sacramento and have floated the idea of renovating Power Balance Pavilion. 

Johnson said city officials should remain focused on a downtown arena and perhaps follow "the Kansas City model." That Midwestern city constructed the Sprint Center – one of the world's busiest arenas – without a professional sports franchise.

Hey, that's cool, I guess.  Until you see why that is such a bad idea.  Bold added by me for emphasis:

If the sides remain apart, Johnson said the city should explore what was done in Kansas City.AEG, which had agreed to operate Sacramento's facility, contributed $53 million to the Kansas City project and operates Sprint Center. 

The Kansas City model is likely to be a difficult one to emulate. 

Gary Bongiovanni, editor in chief of Pollstar magazine, which follows the concert industry, said the Sprint Center was "an unintentional experiment." The city expected to lure an NBA or NHL franchise to the building after it opened in 2007, but that still has not happened. 

"Until Kansas City did it, I'm not sure there was a major example of an arena being built without a sports team," Bongiovanni said. "It becomes a little iffier if you don't have a sports team." 

Arenas with sports anchors generate more revenue from signage and naming rights – advertisers want to be in a building that will be on television broadcasts, Bongiovanni said.  Nonetheless, the Sprint Center has succeeded without a sports team. In the first quarter of 2012, Pollstar ranked the arena the second busiest in the country and seventh busiest in the world based on ticket sales for non-sporting events. Power Balance Pavilion was not in the top 50. 

While the Sprint Center is considered a success by industry experts, Bongiovanni said Sacramentocould not support a new downtown arena if Power Balance Pavilion continued to operate. 

The key to the Sprint Center's success was the financial involvement of AEG, said Troy Schulte, the city manager of Kansas City. 

"There's a vested financial stake (for) them to fill the arena," he said. "I doubt we would have been as successful as a standalone arena without AEG." 

Johnson said the city would continue talking with AEG about a new arena. AEG officials declined comment Tuesday.

It isn't fair to call the Sprint center an "unintentional experiment" because it's not like other cities have built successful arenas (or not arenas) in other cities without a major tenant (look at the top 20 US cities on that list).  Arenas and other venues are built for specific entertainment purposes, and not necessarily for an anchor tenant.  Now, maybe Kansas City's citizens were a part of an intricate social psychological experiment administered by AEG and city officials back in the mid-2000s when they were attempting to promote constructing the Sprint Center.  If so, we are all entitled to monetary compensation for our part.

That second bolded section-- "advertisers want to be in a building that will be on television broadcasts"-- yeah, haven't we been told something else?  Something along the lines of "an arena is sustainable, and even more profitable without an anchor tenant"?  I don't know who this Bongiovanni is (great name), but I'm inclined to agree.  Why wouldn't a venue seen around the world generate more revenue?

***

Moving on, apparently Gary Bettman (and NBA commissioner David Stern) have absolutely no intention of expanding their leagues, which really isn't anything new, but here is what Bettman said anyway.

“There’s interest,” he said. “I hear from a half a dozen cities on a regular basis that would like to have a team, but that’s not anything we’re focused on.” 

While he stopped short of identifying those parties in Kansas City, Bettman was quick to trumpet the virtues of the Sprint Center as a venue amply capable of harboring a franchise. 

“Without being specific,” he said, “because I’m not sure they want to be identified, we hear on a regular basis that there’s this wonderful arena there just waiting for a tenant.”

Read more here: http://www.kansascity.com/2012/04/20/3567294/nba-nhl-commissioners-rule-out.html#storylink=cpy

That's the Bettman statement ever.  "I'm willing to talk about something, but I can't really go into any details so as to not have the media not to go nuts."  Whatever, again, not anything all that new, but something that happened.

In the meantime, Bettman offers advice to Kansas Citians, and citizens of other cities seeking an NHL franchise:

“Get the outer market (premium broadcasting) package or watch NBC for the time being,” he said. “Look, I don’t like raising expectations. I don’t really think that’s fair.”

Yeah, we'll get right on that.

Oh, also, the Islanders need a new building, but Bettman seems pretty dedicated to keeping the team there (because he is consistent).  Kansas City is mentioned.  That's about it.

Read more here: http://www.kansascity.com/2012/04/20/3567294/nba-nhl-commissioners-rule-out.html#storylink=cpy

Read more here: http://www.sacbee.com/2012/04/18/4422311/mayor-kevin-johnson-still-wants.html#storylink=cpy

Read more here: http://www.sacbee.com/2012/04/18/4422311/mayor-kevin-johnson-still-wants.html#storylink=cpy

Oh, So This Is Why KC Sports Fans Hate Tim Leiweke...

Much of the fallout from the Islanders' failed arena plan has focused on what happens next (read: where will the Islanders go now)?  The Village Voice in New York tackles this question, citing a 2009 article in KC's Pitch.

From the Voice:

Kansas City has a new arena, but as our K.C. sister publication the Pitch revealed, it's not likely to throw a sweetheart lease deal at a hockey team. That's because AEG, the management company that runs the publicly owned Sprint Center, would have to give up "a very sizable chunk of the arena revenues" to lure an NHL (or NBA) club, K.C. budget director Troy Schulte told the Pitch, making a full year of concerts sound great by comparison.

Despite the age of the article, it is still relevant today.  Why in 2011, when the Sprint Center has established itself as a profitable arena, would AEG offer a Penguins-esque offer circa 2007 to an NHL team.  Then, the arena was just a NEW arena with HOPES of getting a tenant of some sort.  What many sports fans in Kansas City are slowly beginning to realize is that AEG isn't just going to lure a team out of the goodness of their heart anymore.  It's all business, baby!  

Leiweke doesn't owe us anything, but in our eyes he does.  Look at Mellinger's articles.  To his credit, he speaks as a KC sports fan.  He also wants to cover another team (job security), but it's also easy to root for him to expose AEG for its KC lethargy.  I must kind of agree with Chris Suellentrop's poor assessment of Kansas City that even he disagrees with, but KC does have a step-child mentality, a history of striving to be the 'big' city while denying much of what still holds it back from that distinction in the eyes of the rest of the USA (i.e. "Cow Town," even though the city was built from the stockyards out).  We're cultured ("Sophisticated-- God, we're sophisticated!") folks here in the Midwest, but the biggest putdown from outsiders is that we're a bunch of slack jawed farmers...and for some reason we hate to be seen as inferior (ed. note: in my experience farmers are good people, so no putdown here).  So, AEG's want to make the most money in this instance is seen by Kansas Citians as KC being too small of a market (thus, inferior to say...Columbus, Nashville, or St. Louis).  Instead, AEG is just happy to make the money they are making from an arena that maybe, just possibly was not supposed to make this much money off of concerts.  And the bitch of the whole thing; Kansas Citians deep down assumed it wouldn't be this profitable, but they still want a team.  Concerts don't put you on the map (or make you a 'travel destination' which is a term going around a lot these days), sports do.

This doesn't absolve Leiweke for his failed promises and a lack of effort to bring a team, but it certainly explains the city sports fans' growing impatience with anything new to report about an NHL or NBA team looking at the Sprint Center since about 2008.  KC is a good place, maybe not a 'hockey town' (yet), but its downtown business owners should be getting a better story from those that control the entertainment that comes to their district.  No, AEG does not owe them anything, but someone deserves an explanation, dag nabbit.

Jump for the 2009 Pitch article.

Here is the post for the Pitch, lest we all forget (or it gets erased or whatever):

I also mentioned a blog post by Field of Schemes author Neil deMause, who tracks public money being spent for professional sports franchises. In clarifying the $1.8 million in profits that AEG was kicking back to the city, deMause wrote that the money was "operational profit -- in other words, it doesn't count the cost of paying for the building it in the first place."
Understanding the funding for the Sprint Center can be confusing. For a refresher, I called Shani Tate, communications director for the Sprint Center. She walked me through the basics:
The building cost $276 million. AEG put up $54 million in cash. The NABC put up $10 million. The city is financing the rest through taxes on hotel rooms and rental cars. And the city is taking is taking in more from the hotel/rental car tax than expected.
DeMause guessed the city was paying between $10-$15 million a year in arena bond payments, adding "there's almost no way it [the city] will actually turn a profit on building the Sprint Center."
His guess was close.
"We pay an annual debt service projected this year of about $13.8 million," said Troy Schulte, Kansas City's budget director.
Schulte says the hotel and car rental fees have "exceeded projections over the last couple years every year." For example, last year the city projected $8.9 million in arena fees. They actually received $9.3 million. As far as the $1.8 million operating profit, Schulte says that comes after AEG takes its 16 percent cut and then the city and AEG split the money going forward.
"As long as that continues to generate activity like it has been, it'll be profitable for AEG to operate," Shculte says.
Schulte knows that it'll be tougher as the building loses its shine and if the economy doesn't improve. And should AEG finally find an anchor tenant, that sports franchise would take "a very sizable chunk of the arena revenues."
"Obviously an anchor tenant would have an effect as far as pulling down the available revenues because a lot of those revenues would then go to an anchor tenant," Schulte says.
Right now, it's more profitable for the Kansas City and AEG to book concerts. But as the newness wears off, the stability of having 41 guaranteed dates a year will become more and more important.

The 'Nos' Have It: Long Island Residents Reject New Arena Plan

Just forget you know what this looks like

According to reports on Long Island, voters rejected a referendum to borrow $400 million to build a new arena for the New York Islanders and build a minor baseball stadium.  The future of the Islanders is now in the air, as this was probably the last ploy by owner Charles Wang to keep the team on Long Island.  The team's lease in the rustic Nassau Veterans Memorial Coliseum runs out in 2015.

This means Kansas City's chances of getting a hockey team in the short-term remain on life support.  The Islanders uncertainty stems further than just the need for a new arena and lack of support in their current location, but also the New York area's ability to support three NHL franchises.  Of course, KC is a long shot, but another NHL franchise may be mobile unless Wang sells the team or he starts building an arena brick by brick in a field somewhere.

In the meantime, KC's focus should not be fully on landing an NHL team.  As KC hockey blogger pucKChaser says, grow the game in the area through a grassroots movement and youth involvement.  Quit closing local rinks, because that's just silly.

The Day of Arena Voting Will Come Anon

I was going to do something incredibly stupid and respond to certain snippets from press articles on the upcoming August 1^st vote on Long Island for a new arena/minor league ballpark/etc.  I was going to, but this article by Jed Morey at the Long Island Press has everything you will need to know to form your own damn opinions.  Basically, if Long Islanders vote yes on the arena proposal, they will be one step closer to a new arena and keeping their struggling (but up and coming) Islanders.  If they vote no, then for all intents-and-purpose owner Charles Wang will take his ball and go home (or relocate the team).  This new arena deal appears to be the final offer Wang is making to Nassau Countians to keep the Islanders on Long Island.

Of course, with a ‘no’ vote the implications for Kansas City become interesting.  For example, the city will be talked about for relocation, only to have the Islanders move to Brooklyn or somewhere in the greater New York City area.  Bu hey, the Sprint Center will be on the news!!!  Either way, who knows what will happen, but stay tuned to this channel on August 1^st or 2^nd (or whenever I feel like looking at the results).  This may mean something for KC...or not (especially with everyone calling KC's chances dead.  I don't believe they are dead, just unlikely that any one within the city would be willing to revive them).

Here is the argument for a ‘no’ vote.

Interesting stuff from over at Islanders’ blog Lighthouse Hockey about a realistic cost to taxpayers with or without a new arena.