Phil Caldwell

Sports Blogging With a Grin

Posts Tagged ‘Arena

Seattle To Get a New Privately-Funded Retractable-Roof Waterfront Arena and Concert venue?

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(Originally published in Bleacher Report on 10/3/2011)

Don’t look now kids, but remember that wild retractable roof basketball arena that Fred Brown proposed?  The one we all forgot about?

Well rumors are flowing that the concept might not be dead after all, and in-fact is very much alive.  There’s a big group of high-powered suited architects with designer haircuts frantically working on conceptual plans to present to the city.  Names known to many but will not be mentioned here.

Back in 2008 during the failed negotiations to save the professional basketball for Seattle, out of the blue came a rather radical vision led by former Sonic Fred Brown and public-relations executive Dave Bean, to build a new privately funded project known as the Emerald City Center.

It would be a $1 billion sports and exposition complex that would include a a retractable roof arena capable of housing both an NBA and NHL franchise.

Once fans across Seattle stopped laughing and listened to the proposal, it wasn’t as crazy as it sounded.  In fact, it was sorta cool.

Especially since Seattle had a popular “Summer Nights on the Pier” concert series located at Pier 62/63 along Alaskan Way, that was sucking in tourists from across the planet.  That was until, the pier deteriorated so badly that the series had to be relocated.

But it was a big hit all summer long when it was going on, with 18-22 concerts played by well-known artists on warm summer nights with private small craft swaying to soft waves midst the setting sun.  Glistening waters of the Puget Sound, seagulls in the night, the Olympics beyond.  The works!

A huge tourist draw, but the venue was too small for the really big acts.

Seven years ago all the sports stations in Seattle were summoned for a new radical idea for a retractable roof basketball arena on the Seattle waterfront.  Fred Brown’s group didn’t have the funding, nor a secure site, nor even a plan, other than a conceptual plastic model on cardboard.  Hardly the kind of fiscal structure necessary to get the project rolling.

Enter Seattle developer and high-end residential consultant Nitze-Stagen & Co, who has been trying to wrest control of the 89 acre Pier 46 site from the Port of Seattle since before 2003, which back then leased it to the agency’s largest shipping customer, Hanjin, for 10 years with an option to extend it another five.

The Port, with their tight lease deals already signed,  has long scoffed at this group of developers, according to Frank Stagen, who claimed back in 2004 that one port official mocked “You don’t own one spoonful of the dirt” when Stagen’s group were probing for planning details and irritating DCLU officials for info.

Things have moved along ever since.

In fact Nitze-Stagen, the same group that just cut dirt on the new North Lot apartment project by Centurylink Field, and is involved with massively redeveloping parts of the Pioneer Square area, has a glitzy website with snazzy schematic drawings bragging about this Pier 46 project.

Entitled “Vision 46,” the debate for the site was between Containers vs Condos.  Nitze-Stagen argues the entire cargo area, which was created from backfill during the 1970s, should today be redeveloped with a mix of high-density urban village activities, such as a major hotel, thousands of housing units and offices, a cruise ship terminal, retail, education and even a trolley line.

Included in residential buildings and commercial space, is…ahem…an anchor arena building right on the water, that looks very similar to what Fred Brown’s group proposed in 2008.  A new basketball/hockey arena, just perfect for concerts and whatever else might want to retract a roof.

It’s the perfect location too.  Located at the south entrance of the new waterfront tunnel project, there’s already existing freeway connections to nearby Safeco Field, the convention center and the football/soccer stadium.

With all the connections already built, it’s a cinch.  Plus it’s close enough to the ferry’s for walkers, and light rail already connects the area too.  What’s not to love?

And with construction gearing up as the viaduct is about to be razed, the timing appears perfect too. Which is why architects are working frantically behind-the-scenes, on drawings and budgets, and why this group just managed to get the Longshoreman union to agree to let someone else use this site.

A big huge deal and reportedly THE major hurdle that was holding everything up.

Rumored to be key in this project is a retractable roof arena design.  And why not? 

On the water, large crowds of 20-25,000 could swoon to summer tunes with a removed roof in the summer.  Shows wouldn’t have to worry about the weather, because any formerly rained-out events could still carry on.

Especially if the venue was open on the water side, with a “U” shaped arena bowl facing fans towards the Olympic Mountain Range.

Imagine a new Sonics team playing Game 7 of the finals under partly cloudy skies with the water in background.  Imagine an NHL team doing the same.  Or a national political convention with sunsets and flying fish.

Not so crazy an idea after all, now is it?  But enough to get city nimrods on board who still look stupid for their comments about how the Sonics offered no cultural value?

This project has something for everyone, and with private developers leading the charge, we might actually be looking at a viable candidate,  in terms of proposed arenas in the Seattle area that have a chance to be built!

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OKC Thunder: Oklahoma Fans Enjoy Fruits of Dirty Deeds Done While in Seattle

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Remodelofkeyarena_crop_340x234As the NBA’s Oklahoma City Thunder were motoring through the playoffs before finally losing to Dallasin the Western Conference finals last night, rumblings in Seattle suggest fans are still cranky about all of this.

At halftime of Game 5, Sonicgate folks were rolling out another videodesigned to remind the nation that Oklahoma’s success was at the expense of what went down in Seattle five years prior.

Meanwhile, fan forums in Oklahoma City and many other NBA cities suggest David Stern’s media campaign of lying and distorting the truth, done prior to the move, was effective in deceiving the national public about Seattle’s commitment to it’s team.

But the  war of words continues, as Seattle’s basketball fans will not drop the issue.

On a newspaper forum in Oklahoma City, “Danny,” a hallucinogenic fan writing as if he represented the average person in Seattle, claimed that folks in the Pacific Northwest did not care about any of this, and were  apathetic about their Sonics basketball team.

This, he claimed, was the true reason that the team  left after 41 years.  A message seen frequently in fan comments in Oklahoma City, as if the Thunder faithful wrestle with guilt at their new-found fortune.

Yet in Seattle, outspoken but powerless fan groups seem to be gaining momentum. Just last week the Washington State legislature assembled a task force to explore building a new NBA/NHL arena in the Seattle area.

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Seattle fans have always been the most  passionate and loyal in the country. During the early 1980s following the team’s 1978-79 NBA championship season, 35,000-45,000 Seattle fans routinely jammed the rafters of the Kingdome for regular season games.

While the NBA was packing their bags, a rival professional sports league, soccer’s MLS, discovered that its most successful and best-supported franchise in league history, was surprisingly located in the very same market the NBA abandoned. Teams have since been added in  Vancouver and Portland, creating crazed rivalries between the three Northwest communities.

Five years earlier, basketball fans in Seattle were put in the awkward situation of how to respond to new out-of-town owner Clay Bennett’s devious deeds. Bennett, whose emails have since confirmed, was attempting to make the Sonics as terrible as possible to justify moving the team to his hometown.

Players were kept far away from local media interviews, fan favorites like  Ray Allenwere dealt for draft picks that wouldn’t be productive until years in the future and the team rolled out its worst record in franchise history during its last in Seattle.

Seattle fans had to choose between boycotting games to punish the person trying to move their team or attending games and thereby enabling him to get away with it. Either way, the fans would lose in the end.

Following their appearance in the NBA  Finals 1995-96, Seattle had endured what it considered an inept general manager, Wally Walker, making terrible basketball decisions. These included the firing of popular coach George Karl, who had led Seattle to seven straight years of 60-win seasons, plus puzzling free agent signings of mediocre centers, none of whom worked out.

Newkeyarena_crop_340x234New Key Arena with, entire interior rebuilt and luxury suites added, opening for the 1995-96 season

All this was tolerated by an inept owner, Howard Schultz, who eventually traded all-NBA defensive star Gary Payton in a power dispute. The team continued a downward trend, highlighted by the stunning announcement in 2006, that Oklahoman Clay Bennett had purchased the team for $75 million more than it was worth.

But the situation started a decade prior, when then-owner Barry Ackerley demanded a new arena to replace the dilapidated Seattle Coliseum, which was built for the World’s Fair in 1962.

Plans for a new NBA/NHL stadium were rolled out that would be located where today’s Safeco Field now stands, but those plans were discarded when Ackerley picked the option designed specifically to keep the NHL out of Seattle.

Key Arena was built large enough for the best sight lines in the league but small enough to keep it ever from being attractive to professional hockey. The existing hockey floor can only be viewed by half the patrons, running under the west end of the seating area.

Still, the arena was brand-new in 1995, not the remodeled retread that commissioner David Stern claimed in his now infamous New York press conference in April of 2008.

If you remember, during the tug-of-war with Oklahoma City, the NBA Commissioner claimed that Seattle hadn’t built the NBA an  arena since 1962 and scolded reporters when they tried to correct him. The truth was the paint hadn’t dried on Key Arena before the Sonics and the NBA were back demanding another new arena.

Originalcoliseum_crop_340x234Original Seattle arena prior to complete rebuild in 1995, including floor being lowered 35ft and luxury suites added

Contrary to what Stern claimed, Seattle had actually built the Sonics the first new professional sports stadium, prioritizing the team over the NFL and MLB. The city didn’t ignore the demands of the Sonics like Stern claimed, and David Stern and the NBA not only approved the plans for the new 1995 arena, but also enthusiastically endorsed it after it was built—on  video too.

Five years later the same David Stern was infuriated when, facing the Washington State legislature while begging for more public funds, representatives like Frank Chopp reminded Mr. Stern in very terse and direct language that they had just built the Sonics a new arena.

Still, that didn’t stop new owner Clay Bennett from demanding a new $500 million arena in 2007—funded entirely by taxpayers, of course—to justify moving the team when the community refused.

This while  stripping the team of talent and accumulating draft picks for the future.

Consequently, today’s Thunder team is winning as a direct result of all the deliberate losing in Seattle. The team includes a handful of top-five lottery picks, all attained from losing seasons in Seattle and trading off Sonic veterans.

Most infuriating to fans of Seattle today is that the team has been in Oklahoma for a mere three years but has already enjoyed two years of playoffs, with the latest deep into the Western Conference finals. Clearly Bennett’s plans have worked well, but at the expense of Seattle.

Fanstryingtosaveteam_crop_340x234Desperate Seattle Fans attempt to save team in 2008

Meanwhile, in other cities, players are teaming up in major markets like typical playground bullies, leaving smaller markets like Cleveland in disarray.

But what the NBA wasn’t counting on were the same abandoned fans in Seattle taking matters into their own hands while educating the masses.

Grassroots organizations likesonicsgate.org continue to show up at games and on national TV, embarrassing the efforts of David Stern and Clay Bennett to sweep all of this under the carpet.

Locating Sonicsgate founders behind the players bench in Denver certainly didn’t help and reminded the powers that be that today’s media options make the Seattle situation impossible to ignore.

As the league moves towards an impending lockout, the last thing David Stern needs are cranky Seattle fans embarrassing the NBA while reminding the country of the corruption that removed a storied pillar team from the Pacific Northwest for what most consider a buddy payback!

Read “Seattle’s Lost Supersonics and The Ironic Message Sent By The NBA” by the same author at http://bleacherreport.com/articles/483219-seattle-and-the-message-sent-by-the-nba-by-banning-key-arena

NBA’s Finanical Situation: David Stern’s Conflicting Message About the Thunder

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(Final of a three part series on the NBA’s arena and fiscal strategy, published October & November, 2010)

Last night in Portland, Oregon, broken-hearted Seattle Supersonic fans showed up in mass at the Rose Garden specifically to get themselves broadcast on national TV.  However, what they saw may have caused more internal bleeding, as they witnessed their former franchise pull out a terrific overtime win that included a furious and breathtaking last-minute come-from-behind rally.

Green-and-gold-clad spectators held up signs directly behind the end line, hoping to visually remind the rest of the nation that fans in Seattle have neither forgiven nor forgotten what David Stern and Clay Bennett did to them. Forty years of history lost with a seriously damaged and bitter former fan base in both Vancouver BC and Seattle, if not Alaska and the entire NW corner of the United States and beyond.

The former Sonic squad, now known as the Oklahoma City Thunder, still sounds like a junior high AAA team to most fans in Seattle.  The franchise has amassed a young exciting nucleus since fleeing Seattle, in spite of unimaginative uniforms that look like they were designed by an IRS tax accountant.  The team is filled with lottery picked youngsters and a bright future.

After hearing David Stern’s rhetoric this past summer, perhaps Seattle’s barren professional basketball scene might soon be shared by another 32 cities? This past July, the hated commissioner claimed the NBA was losing “huge amounts of money” and put the number in the $350 to $400 million range for the 2009-10 season alone.

If that is anywhere close to truth, perhaps Seattle ought to be celebrating escaping this mess, rather than mourning their lost franchise?

Stern has an impossible, conflicting task this year. While trying to convince skeptical city council members across the nation to pony up hundreds of millions to replace arenas barely two decades-old, he’s also pleading poverty in an effort to lower the NBAplayers’ salary structure.

Sources confirm the poverty argument, listing that the teams losing money includeAtlantaMemphisDetroitMiamiOrlandoNew Orleans, Oklahoma City,IndianaNew JerseyMinnesotaCharlotteMilwaukee and Philadelphia—news that makes Seattle and Vancouver fans a bit gleeful.

Build new billion-dollar arenas using public taxpayer money for a league that is losing hundreds of millions? How does this make sense?

Most flabbergasting to NBA fans across the globe is that the same Oklahoma City Thunder allegedly lost $9.7 million last season in a relatively new arena, yet still signed young superstar Kevin Durant to a new five-year contract. Perhaps one of the reasons why Stern’s whining has been met with scoffing from the player’s union?

If David Stern and the owners are telling the truth, why did teams shell out nearly a billion dollars in free-agent player contract commitments this past off-season?  Why build new billion dollar arenas if teams are still losing money after moving in?  And how could the Thunder afford to sign Durant to a maximum contract, if they are indeed losing a ton of money under his rookie contract?

More importantly to fans of the now lost Supersonics franchise, what will become of Oklahoma City’s nucleus of talented young players once this new NBA agreement is put into place?

Contracts to Jeff Green, James Harden and Russell Westbrook are all coming due within the next several years, and it is likely that all three will demand significant raises over their rookie amounts.

Especially considering that the New York Knicks paid knucklehead Eddy Curry $10 million last season, which increases to $11.2 million this year as part of a five year $60 million deal he signed. The same Eddy Curry who averaged 1.7 in 2008-09 and 3.7 points per game in 2009-10, and has been a perennial nightmare for the Knicks off the court.

If deals are based on actual talent and personal character, and these young Thunder players use Curry’s contract as a yardstick for their own demands, chances are the Thunder won’t be an exciting young team for long. Oklahoma City will never be able to afford it.

The average salary in the NBA is nearly $5.5 million, and the minimum salary for the last rookie on the end of the bench is just under $475,000. Players get 57 percent of all revenue under the league’s current salary cap. David Stern would like to decrease that by one third.

Last summer, newspaper columnists and talk show hosts praised the Thunders’ Kevin Durant for signing this new “selfless” contract, demonstrating his personal character and wonderful concern for the Oklahoma City fanbase.

But there may be more to this story than Durant feeling love and affection for the small country village that he plays for. Durant’s agent, Aaron Goodwin, told ESPN.com’s J.A. Adande that, “The deal will be worth about $86 million over five years.” This is in comparison to Durant’s rookie contract which paid him a paltry $5 million per season.

A salary increase of three to four times his original, not including endorsement deals, may have been lost had he not done the deal last summer.  David Stern is determined to eliminate or severely reduce these kinds of contracts.

Goodwin spun the situation by saying, “Kevin wanted to make this commitment to the Thunder because he and his family are very appreciative of the commitment that the Thunder have made to him.”

Yes, well of course he did.

More likely, his sudden devotion to Oklahoma has more to do with the NBA’s collective bargaining agreement set to expire in June of 2011.

Breaking down the Thunder’s situation using napkin math, if the current Forbes claims are correct, it would mean the Thunder would easily be in the red by as much as $40-50 million if they were to sign their three young stars in addition to what they are now obligated to pay Durant, let alone the half dozen of other future stars that pack their roster.

The Thunder situation is disturbing to both the league and Oklahoma City fans because this team allegedly plays in one of the better revenue-generating arenas. Or at least that was the justification given to owners voting to approve the move from Seattle to Oklahoma in the bitter 2008 fight.

Stern says he is determined to drop player costs by $750 to $800 million. Deputy NBAcommissioner Adam Silver added that the league spends about $2.1 billion annually in player salaries and benefits, and that owners are in a “dis-economic situation.”

Both Stern and Silver insist that no matter how well the league does at the box office, it won’t change the fact that an overhaul is necessary.  Silver said “Even though we reported record season ticket sales over the summer and otherwise a very robust revenue generation, because of the built-in cost of the system, it’s virtually impossible for us to move the needle in terms of our losses.”

Perhaps the larger problem is the severe credibility issue that David Stern is wrestling with after his perceived hostility towards Seattle? Very few players believe the claims that their teams are actually losing money, and very few city council people believe the rhetoric Stern is spewing about advantages that NBA franchises offer communities.

Especially when NBA owners have demonstrated an uncanny ability to break arena leases whenever it suits them.

Last month as Stern was pleading poverty in spite of billions in new tax-payer funded arenas over the past decade, which were built specifically to cure the fledgling revenue streams of this poor deprived basketball league, fan comments in newspapers and on-line sites were not kind.

Instead, they were littered with scoffing statements like “franchises are just a front for other business ventures” and “David Stern is lying!”

Stern recently threatened to contract unprofitable franchises to help deal with this terrible financial crisis that all NBA teams are wrestling with, apparently, still failing to appreciate how deep his credibility problem runs.

Naysayers argue that NBA franchises are actually just a single part of a far larger conglomerate for these owners.  If the conglomerate earns a profit while the franchise loses money, they reason, an owner can hardly claim that his team is losing money.

If, for example, an NBA “franchise” loses money while outside periphery businesses that surround it make millions, how can you claim a loss?

If Ticketmaster and team cable TV deals, clothing industries and parking lots earn huge profits while the franchise loses money, is it not merely a matter of “part of the sum?”  How can an owner justifiably claim a loss if surrounding businesses earn profits?

Do you believe David Stern’s claims that the NBA is losing money?

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Shouldn’t the entire conglomerate of businesses be considered in these negotiations, rather than just the one single component that owners claim is losing money?  Fans insist it’s a dishonest approach when owners structure their franchises to show a loss.

Others argue that team owners are so vastly wealthy that it doesn’t matter if they lose money because the franchise is merely a toy for them to coddle in their spare time. Like a sailboat, blow-up doll, or an expensive car that loses appreciation over time.

Stern’s arguments might scare the masses if anyone on the outside actually knew what the truth is. But the problem is that the general public has no idea what the truth is, even when owners “open the books” for players and fans alike.

Nobody seems in the mood to believe what David Stern is preaching, and for good reason, if the recent Seattle situation is any indication of what Stern considers ethical behavior.

Everybody assumes the books are cooked and that owners are playing accounting games while hiding the truth, to justify cutting player salaries.  Otherwise, owners wouldn’t be stupid enough to sign players to maximum contracts. Would they?

Businesses that lose money usually cut costs! They certainly don’t add millions in player contracts and spend money like drunken sailors on shore leave.

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Adding to the skepticism is the underhanded lease language the NBA is famous for.

For example, Thunder fans likely failed to appreciate that in Oklahoma City is an ignored and vague escape clause in their lease, stating (according to a report in ESPN NBA in March of 2008) that, “The agreement contains an exit clause that would allow the SuperSonics to leave any time after their sixth season in Oklahoma City if there is a significant drop in the team’s revenues.”

Furthermore, there is the general understanding that professional sports franchises are routinely sold for far more than they are purchased for. For example, Howard Shultz purchased the Sonics in 2001 for $200 million, but in 2006 sold the franchise for $350 million to Clay Bennett.

Nor does winning or losing seem to affect the price tag of franchises.

Ted Leonsis bought the Wizards from the Pollard family, a team that has only won two playoff series since 1980, for over $500 million this past summer (although that does include the arena).

Bruce Ratner purchased the New Jersey Nets in the fall of 2004 for $300 million, claiming he lost $20 to $30 million for four straight years. He then sold the franchise to Russian billionaire Mikhail Prokhorov four years later, with some reports claiming the total deal was for north of $700 million as part of the Barclay’s Center in Brooklyn.

Whatever the truth is, it’s becoming apparent that next year’s 2011-12 season is in dire trouble. This cannot bode well for cities like Orlando, who just opened their sparkling new $480 million arena with the city picking up most of the expense.

With potential lost seasons and a very shaky national economy, David Stern has a very difficult task convincing players to concede to pay cuts while at the same time, trying to convince cities that the NBA is so profitable that they would be foolish to not kick in public taxpayer funds for new arenas!

Read Phil’s latest article on this subject at: http://bleacherreport.com/articles/610697-time-for-a-competing-professional-basketball-league-in-north-america

Part 1 of this series published October 5, 2010 can be found at:http://bleacherreport.com/articles/483219-seattle-and-the-message-sent-by-the-nba-by-banning-key-arena

Part 2 of this series published October 30, 2010 can be found at:http://bleacherreport.com/articles/505644-orlando-magic-raise-bar-in-the-nbas-cold-war-for-new-arenas-and-revenue-streams

For more information, be sure to watch the superb documentary Sonicgage.org

Another note-worthy article deserving a read by Neal Collins, entitled “White Elephants and Wasted Millions” A Warning To The World Cup Hopefuls” at:http://bleacherreport.com/articles/515728-white-elephants-and-wasted-millions-a-warning-to-the-world-cup-hopefuls

Written by PhilCaldwell

November 5, 2010 at 2:12 pm

David Stern’s Arena Arms Race and How Orlando Raised The Bar

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(Part two of an eight part series on the NBA‘s arena and fiscal strategy, published October & November, 2010) 

When the city of Orlando opened their new $480 million Amway Center earlier this month, it rendered every other arena in the league obsolete.

Magic GM Otis Smith called it “the best building in North America,” according to the Orlando Sentinel, while NBA commissioner David Stern gushed, “There is nothing better than this facility in the world.”

Meanwhile cities like Seattle, Sacramento, Kansas City, St Louis, Milwaukee and Las Vegas wondered how the project got done in this era of blown budgets and a floundering economy?

Contrary to the reception given to Sonic owner Howard Schultz in Washingtonstate while attempting to convince skeptical lawmakers to fund a new facility in spite of Key Arena’s barely-dried paint, in Orlando city leaders were far more receptive.  Plans were being finalized to build a new “events center” that would seat 18,500 people in the new 875,000 square foot facility.

Orlando’s new building is hailed as the most technologically advanced sports arena on the continent.  It boasts seven levels, amenities like bars, restaurants, stores and even a play area for kids.  Each  designed not only to keep fans happy but to improve the bottom line for the team and the city, which share some of the building revenue.

The Orlando Magic’s “Fan Cost Index”—the price of a family of four’s average tickets, food, drink, parking and merchandise as calculated by the industry publication Team Marketing Report—is $234.

That’s among the lowest in the NBA, which has a league average of $289.54.

With more options, Magic execs and city officials hope people will spend more.

Part of downtown’s Master Plan Three, it also involves improvements to the  Citrus Bowl and a new performing arts center in Orlando.

Orlando’s new $480 million Amway Center is over twice the size if their old home, the 367,000 sq ft Amway Arena where the Magic played for over a decade.

Patrons had to climb steps to enter, and were packed into a single concourse while forced to walk up or down more stairs to find their seats.  They wove around long concession lines as they were jammed elbow-to-elbow on the concourse.  After this battle of crowded walkways,  fans eventually made their way to their seats or crowded restrooms.

The old experience was similar to other NBA-deemed inadequate facilities like the 400,000 sq ft Key Arena in Seattle and the 442,000 sq ft Arco Arena in Sacramento.

At the new Amway Center, fans enter at street level, where they’ll find a fantastic 80-foot lobby atrium. They board express escalators or can choose from 18 separate elevators to take them to one of five concourses.  Their seats are a bit more spacious, some as much as four inches wider with more legroom.

Ironically while Orlando’s new palace was opening, NBA Commissioner David Sternwas in New York threatening potential contraction of fiscally shakey existing teams.  Whether an idle threat or merely the first shot fired over next year’s problematic collective bargaining debate, NBA players are likely to be locked out which might doom the 2011-12 season.

In Orlando, local papers claim the Magic put up anywhere from $50-150 million towards the new facility, depending on which report you believe.

Curiously, that is dangerously close to the same amount each of the surviving NBA franchise would be liable for to fold four existing teams, assuming each franchise is valued at $350–450 million.

Kevin Colabro, the former voice of the now-departed Sonics put it this way: “I think the fact that the league swapped Vancouver for Memphis and Seattle for Oklahoma City speaks volumes. It’s all about which city will give the league a building.”

Certainly that is the correct analysis if recent history is any indication, however it is not a new phenomenon.

In May of 2006 the Seattle PI pointed out, via Kevin Quinn, an economics professor atSt. Norbert College in Wisconsin who has studied the stadium-building phenomenon, that “Some sharpie thinks of another revenue stream that can be captured by the team and the next guy wants it, too. It’s a keeping up with the Joneses. I think of it as an arms race,” he said.  “You have this leapfrogging one-upmanship that’s going on.”

In Orlando, the new building rises 15 stories and features a dramatic glass tower and an outdoor public balcony twice as big as its basketball court.  Which is just wonderful for fans of Orlando, but there is no evidence that it actually helps teams win.

How can cities attempting to attract the next available NBA franchise ever hope to convince state legislatures for public financing,  when state budgets are already overblown from the slumping economy?   Pony up half a billion dollars for a team that does not exist?  In Seattle where fans feel back-stabbed by David Stern and the NBA, it is an even more daunting challenge.

Going back and studying the stay of NBA teams since the league was formed in the 1940’s, simple math shows a league-wide average of only 10.5 years.

The lease the Sonics signed to get Key Arena built was an above-average 15 years, which Clay Bennett broke at 13 years.

The LA Clippers are in the middle of a six-year lease at Staples.

The length teams stay in arenas is disturbingly small, given the price tag of building new arenas.

Think of those numbers in comparison to the settlement Seattle’s Mayor Greg Nickels accepted to move the Sonics to Oklahoma City in terms of dollars.   Nickels agreed to let the franchise leave Seattle two years early for $45 million, concerned that the city would be left paying that much in debt for Key Arena once the franchise left, with no certain revenue stream.

Forty-five million dollars divided by two years equals $22,500 per lease year.

Compare that to Orlando’s cost to build this new facility divided by 11 years, or the average length that NBA teams stay where they are, and that equals $43,636,364 million per lease year, assuming the average length of a lease for NBA teams stays constant to what history shows us they are.

The other new trend is for teams to own the Master Lease of the arena, which gives them revenue from events held that have nothing to do with basketball or the NBA.  Which is great for the teams, but makes it even more difficult for communities that funded the arenas to find revenue to pay for the facilities.

It brings up questions of morality in terms of public economics and interest.   Sports fans are a minority in nearly every city.

How can cities afford to spend this kind of money on a facility to host a franchise that most people do not care about?   And what about the activities that others DO care about that are not sports-related?

Are cities supposed to spend half a billion on their hobbies, too?  How many hobbies are cities supposed to build facilities for?

Add to that the tendency of franchise owners to break leases early, and it seems unlikely that cities can continue to fund these types of projects without far longer leases and more assurance from the NBA to honor those leases.

Especially when owners of these franchises have demonstrated, as they did in Seattle, that they can escape leases early by via smooth talking corporate lawyers.

Lawyers that frankly, are better than the lawyers cities can afford!

 

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Read Phil’s latest article on this subject at: http://bleacherreport.com/articles/610697-time-for-a-competing-professional-basketball-league-in-north-america

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Read part one – Seattle and The Ironic Message Sent By The NBA by Phil Caldwell October 5, 2010, at:   http://bleacherreport.com/articles/483219-seattle-and-the-message-sent-by-the-nba-by-banning-key-arena

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Read part three – NBA’s Financial Situation: David Stern‘s Conflicting Message About the Thunder   http://bleacherreport.com/articles/510189-david-sterns-conflicting-message-about-the-thunder-nbas-finanical-situation

Written by PhilCaldwell

October 30, 2010 at 2:00 pm