BY Art Thiel 04:02PM 06/21/2012

Thiel: Why rich guys won’t fund entire arena

Chris Hansen has done a good job with transparency about his arena plan. But he can do a better job answering the rich-guy question. Vote here on how you feel about the financial proposal.

Is Seattle big enough to support six pro sports operations? Bill Schultz, Wiki Commons

From most witnesses, Chris Hansen has drawn high marks for his presentations to city and county councils, both for his mastery of information and his willingness to engage officials, fans and media in the discussion.

He does tends to stumble on a frequent question: “If this deal is so good, why don’t you rich guys pay for the whole thing instead of bothering yourself and us with public participation?”

The shallow answer is that the $490 milllion project is a good deal because there is public participation, in the form of construction bonds of up to $200 million that will be retired from tax revenues on the arena’s business, not from new taxes or a diversion of existing taxes.

But the reason behind the virtues is not made clear. It’s no secret and has been discussed. It just hasn’t come out of Hansen’s mouth in a public forum. I think the answer makes him uncomfortable because it may not go over well. But since he’s been credited for transparency, he may as well address it and avoid the “gotcha” stuff.

The reason behind the answer has two parts:

1) Municipal governments can borrow such sums more cheaply than private investors. For a fuller explanation, read a previous column here. The difference can mean millions of dollars of year in savings on a project of this size. Even to rich guys like Hansen and Steve Ballmer, it’s a big deal. It’s also a big deal to the city because in this proposal, it will end up the owner of the building and land, meaning it makes sense to save on the project’s front-end financing instead of back-end cost cutting (see Kingdome roof).

2) The owners assume 100 percent of the risk in the purchase of the NBA and NHL teams. While it’s easy to say the risk is small, in view of the fact that pro sports are monopoly operations whose assets have always appreciated even when they lose money on annual operations (see Sonics), that doesn’t change the facts that every market is different, and no one alive has previously experienced a four-year recession whose end is not yet discernible.

Adding NBA and NHL teams would make Seattle home to six major pro teams (NBA, NHL, Seahawks, Mariners, Sounders and Pac-12 football/basketball, which has become a more professional operation than Seal Team Six, only more ruthless).

What makes Seattle unique is that it is the only market in the country with a hugely successful soccer operation. And by 2013, all of its current big teams are playing in a building owing big public debt. Even though the Husky Stadium remodel is being funded largely through private construction bonds issued by the university, the UW is risking its full faith and credit just like a municipal government.

What this means is that every sports operation in town, current and future, will scrap with each other for ticket buyers, suite sales and sponsorships as we’ve never seen.

What is known about this market is even though there is huge private wealth here, the number of big, Fortunate 500 companies are relatively few, particularly when companies like Amazon.com don’t believe in playing the sports game.

What isn’t known: How this all plays out. Therein lies the risk to each ownership. Sure, a loser team can be sold out of town, but then its old owner can do lunch with only one guy the rest of his life — Howard Schultz. The Huskies don’t even have the option of moving to Oklahoma City.

Everyone involved in sports and media in this town a guess as to how it will work. But that’s all it is. The only guess I’ll offer today is that every day the Mariners trot out Ichiro to start in right field over Casper Wells, is one day closer the franchise comes to being ticket No. 6 in the potential pecking order. And that’s with four teams in the marketplace.

Such personnel decisions illustrate how precarious financial life may become in, say, 2017, should Hansen’s dream becomes reality. More business partnerships may be one-year deals, as they shop for the hot team in the marketplace.

Hansen, Ballmer, the brothers Nordstrom and other investors so far unidentified in the project understand the risk. That’s why they don’t want to be on the hook for the entirety of the building too. I don’t blame them.

But neither should they shy away from a fuller explanation of the rationale for the deal. The modern, privately funded stadiums built or planned in the Bay Area, often cited as comparables by skeptics of the Seattle deal, are in a much larger marketplace than Seattle. The wealth in Silicon Valley is a couple of orders of magnitude greater than Seattle.

Could the wealthies here fund the arena? Sure. Will all the teams be financially break-even? No idea. So they are willing to assume majority of the risk. But as Hansen told the city council Wednesday, “It’s fair for the city to have skin in the game.”

With an agreement to cover cost overruns and several other protections added, the risk seems reasonable. But I would also ask Hansen to be careful in minimizing the public risk.

After all, Aubrey McClendon, Frank McCourt, the Wilpons, Tom Hicks and Bruce McNall are just a few pro sports owners who were hailed as white knights until the chessboard went upside down.

CLARIFICATION – The Seattle Storm has made no decision about their interest in tenancy at Chris Hansen’s proposed arena, said Dawn Trudeau, managing partner of Force 10 Hoops LLC, which owns the WNBA team. A Sportspress Northwest story Wednesday quoted a Seattle City Council staffer informing council members in open session that the Storm, which has a lease at KeyArena, “wanted to be” in the new arena.


YourThoughts

  • Mparker7410

    This was great until you compared Hansen to McClendon.

    • art thiel

       Hansen is about to step into a class of businessmen whose casualty rate has grown markedly. Personally, I believe him to be well-suited to the task. But nice things have been said about every ownership group in Seattle sports. The market changes, the sports change their rules, their lives change (see Chris Larson divorce) and fortunes go away. The guy appears to be sincere as a tax audit, only much more pleasant. But I can find you people in this town that thought George Argyros and Ken Behring, to name two other rich guys from California, who were swell too.   

  • Mparker7410

    This was great until you compared Hansen to McClendon.

    • art thiel

       Hansen is about to step into a class of businessmen whose casualty rate has grown markedly. Personally, I believe him to be well-suited to the task. But nice things have been said about every ownership group in Seattle sports. The market changes, the sports change their rules, their lives change (see Chris Larson divorce) and fortunes go away. The guy appears to be sincere as a tax audit, only much more pleasant. But I can find you people in this town that thought George Argyros and Ken Behring, to name two other rich guys from California, who were swell too.   

  • http://twitter.com/SteilacoomHawks Stephen Turella

    How does the potential of a regional sports network affect this dynamic. Hansen was explaining to one of the KC council members (Patterson, I think) that TV is much more important now for revenue than it was in the past. Could a Regional sports network help out the M’s if they partner with the Sonics and yet to be named NHL team?

    • art thiel

      Great question, Stephen, with multiple answers, too many to address here. Nevertheless . . .

      We already have an RSN here, ROOT Sports, but it is losing all its Pac-12 content and owns the broadcast rights to a baseball franchise that’s become one of the game’s most mis-managed. Hansen is correct about TV, but it is also possible that the TV-rights-fees increase is a bubble that could burst. Did any among us imagine a few years ago that house prices would crash?

      What is fair to say is that all the national media companies are watching Hansen and Seattle very closely.

  • http://twitter.com/SteilacoomHawks Stephen Turella

    How does the potential of a regional sports network affect this dynamic. Hansen was explaining to one of the KC council members (Patterson, I think) that TV is much more important now for revenue than it was in the past. Could a Regional sports network help out the M’s if they partner with the Sonics and yet to be named NHL team?

    • art thiel

      Great question, Stephen, with multiple answers, too many to address here. Nevertheless . . .

      We already have an RSN here, ROOT Sports, but it is losing all its Pac-12 content and owns the broadcast rights to a baseball franchise that’s become one of the game’s most mis-managed. Hansen is correct about TV, but it is also possible that the TV-rights-fees increase is a bubble that could burst. Did any among us imagine a few years ago that house prices would crash?

      What is fair to say is that all the national media companies are watching Hansen and Seattle very closely.

  • Hammtime

    Art, you make some good points. One point you made way back that I think get’s overlooked is the demand for luxury boxes. Key Arena wasn’t hemorrhaging money before Safeco and Qwest field. After Safeco and Qwest were built, Key Arena became a money loser. With Safeco, Qwest, the new Husky stadium and the new Arena, there will be a flood of luxury boxes and only so many corporate sponsors to go around. I think this is the REAL reason the Mariners are fretting……

    • jafabian

      There’s two reasons why Key Arena became problematic IMO.  First and foremost the Sonics weren’t performing anywhere as well under Howard Schlutz’s stewardship as they did under Barry Ackerley.  Secondly, the Mariners and Seahawks looked at what the Sonics did with Key Arena and asked themselves “How can we be at least comparable to them with our new stadium?”  In a short amount of time Key Arena became yesterday’s news with the construction of Safeco Field and then-Sehawks Stadium as they were able to top in their amenities what Key Arena established. And IIRC, the fact that the Sonics were essentially renters in Key Arena prevented them from getting the kind of profit that other NBA franchises in their arena deals. 

      You can bet any new arena that’s built will look at Safeco Field and Qwest Field that the architects will make sure they top those venues. 

      • Hammtime

        Understood, but I wonder if this arena is built, given the limited market in this area for luxury boxes, will the Mariners or Seahawks now start to lose money. If so, will they then ask the city/county/state for money to upgrade their stadiums to compete with the new arena? It feels a little like that game whack-a-mole. 

        But, as Stephen pointed out below, TV deals seem to be exploding (see baseball) so maybe that is the next (new) way to generate the cash to be profitable.

        I’m not against the arena deal, I just wonder if we have the population to keep all teams in the area profitable.

        P.S. I don’t know if it was an intentional spelling error but I kind of like the name “Schlutz” for Howard. We should call him a Schlutz from now on.

        • jafabian

          That’s exactly why Howard Schultz wanted a remodel of Key Arena.  And yeah, it’s all pretty whacked.  These parties need to realize that all their problems would take care of themselves it they’d just build a winning franchise rather than a great arena/stadium.  You don’t see Microsoft telling the city they need a new campus because the Zune failed. 

        • art thiel

           That’s the economic question overarching all others: Can this market support so many franchises? Don’t know. No one does.

          And I’m fixing the typo. I take enough legit shots at Howard; I don’t favor the cheap ones.

      • art thiel

        Mostly right. Sonics attendance declined in seven of their final eight years in Seattle, even B.C. (Before Clay). And the baseball and football stadiums did take suite business away from the Key, but aside from Vin Baker, Danny Fortson and Robert Swift, decline started with the lockout in 1999 and was abetted by the dot-com crash in 2000.

  • Hammtime

    Art, you make some good points. One point you made way back that I think get’s overlooked is the demand for luxury boxes. Key Arena wasn’t hemorrhaging money before Safeco and Qwest field. After Safeco and Qwest were built, Key Arena became a money loser. With Safeco, Qwest, the new Husky stadium and the new Arena, there will be a flood of luxury boxes and only so many corporate sponsors to go around. I think this is the REAL reason the Mariners are fretting……

    • jafabian

      There’s two reasons why Key Arena became problematic IMO.  First and foremost the Sonics weren’t performing anywhere as well under Howard Schlutz’s stewardship as they did under Barry Ackerley.  Secondly, the Mariners and Seahawks looked at what the Sonics did with Key Arena and asked themselves “How can we be at least comparable to them with our new stadium?”  In a short amount of time Key Arena became yesterday’s news with the construction of Safeco Field and then-Sehawks Stadium as they were able to top in their amenities what Key Arena established. And IIRC, the fact that the Sonics were essentially renters in Key Arena prevented them from getting the kind of profit that other NBA franchises in their arena deals. 

      You can bet any new arena that’s built will look at Safeco Field and Qwest Field that the architects will make sure they top those venues. 

      • Hammtime

        Understood, but I wonder if this arena is built, given the limited market in this area for luxury boxes, will the Mariners or Seahawks now start to lose money. If so, will they then ask the city/county/state for money to upgrade their stadiums to compete with the new arena? It feels a little like that game whack-a-mole. 

        But, as Stephen pointed out below, TV deals seem to be exploding (see baseball) so maybe that is the next (new) way to generate the cash to be profitable.

        I’m not against the arena deal, I just wonder if we have the population to keep all teams in the area profitable.

        P.S. I don’t know if it was an intentional spelling error but I kind of like the name “Schlutz” for Howard. We should call him a Schlutz from now on.

        • jafabian

          That’s exactly why Howard Schultz wanted a remodel of Key Arena.  And yeah, it’s all pretty whacked.  These parties need to realize that all their problems would take care of themselves it they’d just build a winning franchise rather than a great arena/stadium.  You don’t see Microsoft telling the city they need a new campus because the Zune failed. 

        • art thiel

           That’s the economic question overarching all others: Can this market support so many franchises? Don’t know. No one does.

          And I’m fixing the typo. I take enough legit shots at Howard; I don’t favor the cheap ones.

      • art thiel

        Mostly right. Sonics attendance declined in seven of their final eight years in Seattle, even B.C. (Before Clay). And the baseball and football stadiums did take suite business away from the Key, but aside from Vin Baker, Danny Fortson and Robert Swift, decline started with the lockout in 1999 and was abetted by the dot-com crash in 2000.

  • Jamo57

    Stephen’s question touches on something I have wondered about the marketplace for corporate sponsorships and suite sales, etc.   That being rather than being in cold-blooded competition with each other, why don’t the franchises form some partnerships in marketing to the corporate community?    I imagine it happens to a certain extent between the Hawks and the Sounders.    But could the hockey and basketball teams also partner.   What about franchises that are in different parts of the calendar year?   Or the Huskes and the Seahawks?   Sell suites or signage in bundles.

    Partnerships and cross-platform branding have been increasing in consumer marketplaces as the years pass.   Let’s see our local franchies get creative in similar ways.   Grow the pie, don’t fight over the slices.   What was that phrase Tod Leiweke always used.   Finding synergies?

  • Jamo57

    Stephen’s question touches on something I have wondered about the marketplace for corporate sponsorships and suite sales, etc.   That being rather than being in cold-blooded competition with each other, why don’t the franchises form some partnerships in marketing to the corporate community?    I imagine it happens to a certain extent between the Hawks and the Sounders.    But could the hockey and basketball teams also partner.   What about franchises that are in different parts of the calendar year?   Or the Huskes and the Seahawks?   Sell suites or signage in bundles.

    Partnerships and cross-platform branding have been increasing in consumer marketplaces as the years pass.   Let’s see our local franchies get creative in similar ways.   Grow the pie, don’t fight over the slices.   What was that phrase Tod Leiweke always used.   Finding synergies?

  • Matt

    Art it seems like you’re more hesitant to embrace this proposal than most in the sports media. Seem to be playing a little devils advocate. What’s not to love about getting a world class arena, possibly Sonics back, possible NHL franchise, enhanced entertainment downtown, and all for a fraction of the cost of what it’s ultimate value will be. What’s not to love and why not get 100% behind this plan?

    • jafabian

      Simply because of how and why the NBA left Seattle in the first place.  And also the money involved.  The city doesn’t want a repeat of what happened before and end up in 10-15 years having two white elephants on their hands with Key Arena and the proposed new arena.  Yes, this is a great solution for sport fans and the proposed team ownership but is it a viable option for Seattle?  That’s what city and county officials are asking themselves.

    • Hammtime

      I think Art is just more methodical in his judgement than most in the sports community. Sure, this is a very good proposal but that doesn’t mean it should be accepted blindly without asking some questions. I think that is Art’s stance.

      Honestly, I think the sports community headed by the radio stations has been too giddy to jump on the bandwagon. One thing I keep hearing that is patently incorrect is “We will bring our Sonics BACK”.

      Well, guess what, our Sonics are in OKC and they’re not coming back. Instead, the future of the NBA in Seattle means poaching a team from another city erasing that teams history and renaming it the Sonics. That to me isn’t “bringing the Sonics back”.

      Second, realize many people are not so eager to get involved with a league that had no problem abandoning a city that it had 40 years of history with. Look at how hard Stern is working to keep the Kings in Sacramento. He did nothing like that for Seattle. He helped broker the deal for Schlutz (yes, Schlutz) to sell to Stern’s buddy Clay-Clay. You can’t convince me Stern really wanted to keep the Sonics in Seattle.

      If you watch Sonicsgate, why would anyone be overly eager to get back into bed with the Stern-Bennett’s NBA?

      Read this, I think it vocalizes the feelings of many local sports fans who are not so eager to rejoin the NBA.
      http://seattletimes.nwsource.com/html/take2/2018493071_davidsternthethiefwhoisbackformore.html

      • art thiel

         Hammtime, thanks for recognizing what I’m attempting to do. You’re right, the sports talk stations, and really, every media outlet, including this one, would be helped by NBA and NHL teams. But not at any price, and not at cost to taxpayers, especially in this economy.

        Sports is all about passion and emotion, but sports business is all about tough, even ruthless, business judgments. Gotta use our heads. Impulse is what keeps getting us, and every sports community, in trouble with stadiums.   

        • Hy Dudgeon

          Art, I’m glad that I’m not the only sports fan (& citizen) who appreciates your careful, thought-provoking, and humorous at times approaches to complicated sports/business stories like this one on the latest new arena/palace proposal.  You still compare quite well in my own mind with the late, great Jim Murray of the ‘L.A. Times’.  Who also favored strawberry rhubarb pie, it is reputed.  Peace.

    • art thiel

       Matt, as a journalist, my job to be as honest as I can to all readers. That includes non-sports fans and discerning fans who like sports but aren’t offended by a dose of truth-telling. Anyone involved in local sports can cheerlead this project. Not everyone can think, or even be bothered to think.

      I’ve lived through all the modern ordeals of Seattle stadium-making, and in a future column I’ll show you some scars. We’ve messed it up so damn many times that this project deserves scrutiny in order that we don’t mess it up. Why are you and many other fans not embracing the idea of a thorough exam to make sure we don’t blow this one too?  If we’d done that with the KeyArena remodel, the Sonics would still be here.

  • Matt

    Art it seems like you’re more hesitant to embrace this proposal than most in the sports media. Seem to be playing a little devils advocate. What’s not to love about getting a world class arena, possibly Sonics back, possible NHL franchise, enhanced entertainment downtown, and all for a fraction of the cost of what it’s ultimate value will be. What’s not to love and why not get 100% behind this plan?

    • jafabian

      Simply because of how and why the NBA left Seattle in the first place.  And also the money involved.  The city doesn’t want a repeat of what happened before and end up in 10-15 years having two white elephants on their hands with Key Arena and the proposed new arena.  Yes, this is a great solution for sport fans and the proposed team ownership but is it a viable option for Seattle?  That’s what city and county officials are asking themselves.

    • Hammtime

      I think Art is just more methodical in his judgement than most in the sports community. Sure, this is a very good proposal but that doesn’t mean it should be accepted blindly without asking some questions. I think that is Art’s stance.

      Honestly, I think the sports community headed by the radio stations has been too giddy to jump on the bandwagon. One thing I keep hearing that is patently incorrect is “We will bring our Sonics BACK”.

      Well, guess what, our Sonics are in OKC and they’re not coming back. Instead, the future of the NBA in Seattle means poaching a team from another city erasing that teams history and renaming it the Sonics. That to me isn’t “bringing the Sonics back”.

      Second, realize many people are not so eager to get involved with a league that had no problem abandoning a city that it had 40 years of history with. Look at how hard Stern is working to keep the Kings in Sacramento. He did nothing like that for Seattle. He helped broker the deal for Schlutz (yes, Schlutz) to sell to Stern’s buddy Clay-Clay. You can’t convince me Stern really wanted to keep the Sonics in Seattle.

      If you watch Sonicsgate, why would anyone be overly eager to get back into bed with the Stern-Bennett’s NBA?

      Read this, I think it vocalizes the feelings of many local sports fans who are not so eager to rejoin the NBA.
      http://seattletimes.nwsource.com/html/take2/2018493071_davidsternthethiefwhoisbackformore.html

      • art thiel

         Hammtime, thanks for recognizing what I’m attempting to do. You’re right, the sports talk stations, and really, every media outlet, including this one, would be helped by NBA and NHL teams. But not at any price, and not at cost to taxpayers, especially in this economy.

        Sports is all about passion and emotion, but sports business is all about tough, even ruthless, business judgments. Gotta use our heads. Impulse is what keeps getting us, and every sports community, in trouble with stadiums.   

        • Hy Dudgeon

          Art, I’m glad that I’m not the only sports fan (& citizen) who appreciates your careful, thought-provoking, and humorous at times approaches to complicated sports/business stories like this one on the latest new arena/palace proposal.  You still compare quite well in my own mind with the late, great Jim Murray of the ‘L.A. Times’.  Who also favored strawberry rhubarb pie, it is reputed.  Peace.

    • art thiel

       Matt, as a journalist, my job to be as honest as I can to all readers. That includes non-sports fans and discerning fans who like sports but aren’t offended by a dose of truth-telling. Anyone involved in local sports can cheerlead this project. Not everyone can think, or even be bothered to think.

      I’ve lived through all the modern ordeals of Seattle stadium-making, and in a future column I’ll show you some scars. We’ve messed it up so damn many times that this project deserves scrutiny in order that we don’t mess it up. Why are you and many other fans not embracing the idea of a thorough exam to make sure we don’t blow this one too?  If we’d done that with the KeyArena remodel, the Sonics would still be here.

  • Eric K

    In general I think out of all sports a basketball arena is the one where public participation is most defensible since it has so many uses, concerts etc.

    • art thiel

       Good point, Eric. More event dates in the arena than the other two combined. Which is, of course, a large issue for the Port of Seattle, even if the events are a max of 18,500 customers.

  • Eric K

    In general I think out of all sports a basketball arena is the one where public participation is most defensible since it has so many uses, concerts etc.

    • art thiel

       Good point, Eric. More event dates in the arena than the other two combined. Which is, of course, a large issue for the Port of Seattle, even if the events are a max of 18,500 customers.

  • jafabian

    I don’t blame Hansen and “sons” (isn’t that a furniture store?)  trying to save as much money as they can.  No one wants to spend money needlessly as that money doesn’t last forever.  I’ll give Hansen credit that up to this point he’s been fairly patient.  But really, what choice does he have?  But if he continues to be patient and more importantly show more class than the the OKC owners and the NBA did he might be able to win over some supporters among the councils.

    I’m not sure Seattle can support two more sport franchises but if the new arena was located in Bellevue it might.  It depends on who they (assuming the tenants will be the NBA and NHL) view their customer base.  Will they go for Joe Average or Microsofties?  When you see in the NBA how the Lakers, Heat and Knicks have Hollywood celebrities, well known business executives and Wall Street high rollers sitting courtside it’s painfully obvious the NBA caters itself to the upper class which is why the teams in large markets succeed and smaller market clubs at best are inconsistent. (the Spurs not withstanding)  If that’s to be the approach I’d think Bellevue would be a better option than Seattle.  The Fortune 500 companies around here are dwindling with WAMU gone, Safeco Insurance being acquired by Liberty Mutual and Microsoft being soundly thrashed by Apple I have my doubts if an arena that seats 18000 and has 90+ luxury suites will sell as well as the large market NBA teams if competing with other sport teams in the area.  Is it enough to survive the lean years that almost all sport teams go thru?

    I think Stephen raises a good point with his question regarding a regional sport network.  The MSG and Yankee networks are huge money makers.  Granted the population there is much, much more than the Pacific NW but if you look at the entire NW, maybe B.C., Northern California, Utah, Hawaii, Alaska, Montana and I think a comparable network could be created.  With the way the economy is  I don’t believe fans are into the stadium experience as they used to be.  This is the digitial age and Puget Sound has always been a huge part of it.  With more and more magazines and newspapers ceasing publication and going online it stands to reason that other businesses would follow suit and not just because it’s the trend.  A much larger customer base can be reached than just 18,000 in an arena and traffic concerns are all but eliminated.  Think of the corporate sponsorship possibilties.  If the city and county councils really want to sell the idea of staying at Key Arena to Hansen they need to put something like that together to sweeten the pot for him.

    • Hy Dudgeon

      Good points all, Jafa.  And ‘Hansen and Sons’ is actually a moving company, and reputedly not a very good one. Hope Chris isn’t a long-lost scion of that family.

  • jafabian

    I don’t blame Hansen and “sons” (isn’t that a furniture store?)  trying to save as much money as they can.  No one wants to spend money needlessly as that money doesn’t last forever.  I’ll give Hansen credit that up to this point he’s been fairly patient.  But really, what choice does he have?  But if he continues to be patient and more importantly show more class than the the OKC owners and the NBA did he might be able to win over some supporters among the councils.

    I’m not sure Seattle can support two more sport franchises but if the new arena was located in Bellevue it might.  It depends on who they (assuming the tenants will be the NBA and NHL) view their customer base.  Will they go for Joe Average or Microsofties?  When you see in the NBA how the Lakers, Heat and Knicks have Hollywood celebrities, well known business executives and Wall Street high rollers sitting courtside it’s painfully obvious the NBA caters itself to the upper class which is why the teams in large markets succeed and smaller market clubs at best are inconsistent. (the Spurs not withstanding)  If that’s to be the approach I’d think Bellevue would be a better option than Seattle.  The Fortune 500 companies around here are dwindling with WAMU gone, Safeco Insurance being acquired by Liberty Mutual and Microsoft being soundly thrashed by Apple I have my doubts if an arena that seats 18000 and has 90+ luxury suites will sell as well as the large market NBA teams if competing with other sport teams in the area.  Is it enough to survive the lean years that almost all sport teams go thru?

    I think Stephen raises a good point with his question regarding a regional sport network.  The MSG and Yankee networks are huge money makers.  Granted the population there is much, much more than the Pacific NW but if you look at the entire NW, maybe B.C., Northern California, Utah, Hawaii, Alaska, Montana and I think a comparable network could be created.  With the way the economy is  I don’t believe fans are into the stadium experience as they used to be.  This is the digitial age and Puget Sound has always been a huge part of it.  With more and more magazines and newspapers ceasing publication and going online it stands to reason that other businesses would follow suit and not just because it’s the trend.  A much larger customer base can be reached than just 18,000 in an arena and traffic concerns are all but eliminated.  Think of the corporate sponsorship possibilties.  If the city and county councils really want to sell the idea of staying at Key Arena to Hansen they need to put something like that together to sweeten the pot for him.

    • Hy Dudgeon

      Good points all, Jafa.  And ‘Hansen and Sons’ is actually a moving company, and reputedly not a very good one. Hope Chris isn’t a long-lost scion of that family.

  • SUDS

    My understanding is the debt has been retired on Safeco Field (the taxes were able to be eliminated last year). So does that make the Safe paid off (with the exception of ongoing maints and upgrades)?

    Also, wasn’t the real underlying reason behind the Key’s uncompetitiveness was the lease with the City? I recall it was a decent deal when signed with Ackerly, but as the NBA’s economics changed it became a lead anchor around their necks. The City’s steadfast refusal to renegotiate the lease is what lead to the caterwauling about Key Arena’s “uncompetitiveness”. 

    • Jamo57

      Arenas are much larger now with more retail, bars, and eating establishments, etc.   They’ve morphed almost into malls. It’s all about increasing revenue way beyond tickets and a beer and a dog. Teams want people to arrive early and stay late. And spend, spend, spend.

    • art thiel

      SUDS, the debt on Safeco remains for another 8-9 years, but it is being retired faster than expected.

      The 1995 lease Ackerley signed was in his favor; what happened (see answer below) is a lousy team, the 1999 lockout and the 2000 dot-com bust. Many suite buyers also defected to the football and baseball stadiums. The NBA economy kept getting worse, making for the lockout of 2011 that fixed a number of things that the 1999 lockout failed to do.

  • SUDS

    My understanding is the debt has been retired on Safeco Field (the taxes were able to be eliminated last year). So does that make the Safe paid off (with the exception of ongoing maints and upgrades)?

    Also, wasn’t the real underlying reason behind the Key’s uncompetitiveness was the lease with the City? I recall it was a decent deal when signed with Ackerly, but as the NBA’s economics changed it became a lead anchor around their necks. The City’s steadfast refusal to renegotiate the lease is what lead to the caterwauling about Key Arena’s “uncompetitiveness”. 

    • Jamo57

      Arenas are much larger now with more retail, bars, and eating establishments, etc.   They’ve morphed almost into malls. It’s all about increasing revenue way beyond tickets and a beer and a dog. Teams want people to arrive early and stay late. And spend, spend, spend.

    • art thiel

      SUDS, the debt on Safeco remains for another 8-9 years, but it is being retired faster than expected.

      The 1995 lease Ackerley signed was in his favor; what happened (see answer below) is a lousy team, the 1999 lockout and the 2000 dot-com bust. Many suite buyers also defected to the football and baseball stadiums. The NBA economy kept getting worse, making for the lockout of 2011 that fixed a number of things that the 1999 lockout failed to do.

  • GarryH

    The gullible public is expected to fund a single-use facility which depreciates in value (and needs expensive repairs and upgrades) and is neither moveable nor marketable as anything else, while the rich owners get the team, a branded asset that appreciates and is easily resold.  We the public ‘own’ the facility, but rent it for pennies to the team, which then sells ‘naming rights’ to our stadium for millions.  I wish I could own a team and legally bilk the public like this!

  • GarryH

    The gullible public is expected to fund a single-use facility which depreciates in value (and needs expensive repairs and upgrades) and is neither moveable nor marketable as anything else, while the rich owners get the team, a branded asset that appreciates and is easily resold.  We the public ‘own’ the facility, but rent it for pennies to the team, which then sells ‘naming rights’ to our stadium for millions.  I wish I could own a team and legally bilk the public like this!