Friday, January 19

Sonic Arena: Part I

I assume that you have all read the news regarding Clay Bennett’s proposal to the state of Washington, and his letter to Gov. Gregoire. If not, go inform yourselves.

If you’ve heard it once, you’ve heard it a thousand times by now, the Sonics are looking at modeling this new arena on the Pepsi Center. Hell, they even hired the guys that designed the Pepsi Center to design their new playpen. As Bennett stated in his letter to Gregoire:

“We believe the potential for such a venue extends far beyond professional basketball and has the opportunity to benefit the entire region. An excellent example was the news last week that Denver was chosen as the site for the next Democratic National Convention to be held at the Pepsi Center, which is an example of the kind of facility we are proposing here in Puget Sound.”

Of course, Bennett failed to mention that previous conventions have been held at Joe Louis Arena, Kemper Arena, Reunion Arena, and the Astrodome – because, that, of course, would be admitting that those stadia are no longer inhabited by NBA teams, having been abandoned by the spoiled men who run/ran their respective professional sports franchises.

Bennett proposes that the Sonics will provide $100 million towards the expected $530 million cost of the arena. He expects the state to provide $330 million, and Bellevue/Renton and private financiers to provide the balance of $100 million. It’s important to note that the stadium itself is expected to cost $360 million, while the land value is estimated at $170 million, which he assumes will be donated.

In other words, Bennett plans on contributing 20% of the total cost of the project, which got me to thinking – how will the revenues for the arena be divided up? That is to say, of the X millions of dollars in revenue for an arena such as this, how much will be generated by the Sonics, how much by concerts, tractor pulls, or barbershop quartet conventions?

I did a quick look at the schedule at the Pepsi Center for the next few months (unfortunately, they don’t archive past months, so we’ll have to go with Jan. to April). Not surprisingly, the lion’s share of events at the PC are divided up between the Avalanche and the Nuggets. In fact, between 58% and 85% of a given months events are either Nugget- or Avalanche-related. Of course, that’s for the months when the Nuggets and Avalanche play, I’m sure that the Pepsi Center has plenty of things on tap for the summer.

20 comments:

Anonymous said...

I think Clay Bennett learned his negotiating strategy from watching too many Popeye cartoons:

"Let's you and me have a duck dinner... you bring the duck!" -Wimpy

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Raw Lew said...

if the sonics r building a new stadium in seattle y would they relocate to oak city???

spock said...

It's logical to assume Clay Bennett understands a publicly funded plan will fail. What remains to be decerned are Bennett's intentions after the deal fails. Will he indeed move the team or attempt to come up with an alternative plan involing more private financing. I project those intentions will be revealed on October 31st.

Anonymous said...

Your mention of conventions in areans abandoned by pro teams was worthwhile. Antiquated from a revenue producing standpoint game after game to premium paying guests to a pro sport team is not the same thing as saying the building is obsolete. It is not ideal either to be sure but for most one time events able to sell no more 17,000 seats a show it is good enough. The indifference that many seem to have toward a newer bigger arena may come from enjoying entertainment events that maybe arent the biggest mass cluture events and dont sell 22,ooo tickets.

If Sonics got more money from tv/radio rights or merchandise sales by being a winning team that could help the operating budget. Capital gains and tax writeoffs are a major part of making pro sports ownership work for most owners despite the reported operating losses. Small markets should get to work with Stern to improve revenue sharing- that is a very big source of the problem.

Anonymous said...

I was just looking at the overall league standings as of right now on ESPN.com:

http://sports.espn.go.com/nba/standings?season=2007&group=league&seasontype=2

They have the Sonics fourth from the bottom, despite being ahead of Charlotte and Atlanta percentage-wise. Does anyone (Mr. Nussbaum?) know why this is? Is there some kind of weird east-west balance thing when it comes to league standings and the lottery, in a similar way that a division leader can get a higher seeding in the playoffs than a non-1st place team with a better record? Or am I just reading too much into a computer glitch? I'm just curious, because in those standings, we're in line for the fourth pick rather than the sixth or seventh (and that despite our accursed three-game win streak).

Anonymous said...

One thing to keep in mind about the Pepsi Center, is that there are two pro teams that contributed to that $170 mil, and the Sonices will be the only team to contribute. It would be a fair assumption, that if Seattle had an NHL team contributing, then the $100 mil from the team would be higher. Also, this means that there will be more dates available for the arena to be used during the winter for outside events, so there would be a higher revenue stream of outside events than the Pepsi Center, for the months that you talked about.

Anonymous said...

I noticed that average attendance is down about 550 from last season but didnt draw attention to announced attendance because the numbers seem pretty soft and managed always. But the combination of team below .500 and maybe out the door in awhile and maybe not quite exciting enough seems to be have a bit on an impact.

Will a new arena suddenly cause corporate sponsors to rush to buy expensive suite leases and premium courtside seats and spread lavishly in concourse restaurants, bars and shops? I am skeptical. The arena deal needs to be presented with a strong business plan, backed up by evidence of demand for the fancier services.

Anonymous said...

Clay Bennett's plans now all make sense. Buy a struggling team. Put minimal effort and money into it to see if there's hope to revive the team. If it gets going, great! If not, move the team to another city that wants an NBA team. Stay there for a year, and sell it to someone else. Oh, and make a couple million bucks in the process.

Bennett and his group has no regard for legacy or history, or fans for that matter. It's all about the numbers, and more specifically the bottom line. When the deal puts a hundred mil into your bank account you don't give a shit about history, legacy or fans. Those are all nice words that don't mean anything in business.

Anonymous said...

Eric, espn choose to sort their lists based on "games back" (creating the east /west issue you noticed when the full league is combined into one list) but this is not the way pingpong balls for the lottery is officially determined, It is straight win/loss. Then the pingpong balls determine the top of the lottery and the rest goes by w/l.

Anonymous said...

this is out of the blue but i want to remind everyone that we could have drafted jj redick but we took sene insted

retardo poopypants said...

Not only out of the blue, but meaningless as well. Could have also drafted Brewer, Carney, Rondo or Marcus Williams. Were you attempting to make a point?

Anonymous said...

Small blurb in the business section of todays PI where the paper asks the areas top venture capitalists to make predictions on several area business trends. Most agree that they think the Sonics will stay in the area, because it's good business for the state and the county.

Anonymous said...

Ahhhh... I hope the team is at least watchable. 'Coz fans need to show up for it to be good business. I know I ain't driving down to Renton to watch my team get its ass whooped every damn night because they don't play well. I don't mind when they lose having played a good NBA-grade game. But I don't want to waste my time and money to watch a group of mediocre players and coaches trying to pull off the impossible.

Anonymous said...

Is it only me or has anyone else noticed that 1) Clay is making virtually no effort to improve the team 2) He is nowhere to be found at the games and 3) he managed to up the taxpayer cost from $200mil to $330mil thus guaranteeing the legislature to send him packing. I feel like I'm being played and I'm this close to saying screw him and his team. It's not cool to think he's sitting there laughing his ass off at the stupid fans like me who continue to line his pockets.

Anonymous said...

How much for a beer at Key? I haven't been there in years

Gary!?! said...

$6.50 for a miller.

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