BY Art Thiel 02:55PM 06/06/2014

Bettman chills Seattle expansion talk . . . or not

NHL commissioner said expansion isn’t being considered, partly because Seattle doesn’t have a suitable arena underway, Maybe it’s time for Chris Hansen to change his plan.

NHL Commissioner Gary Bettman, left, learned his passive-aggressive tactics from the master, David Stern. / NBCSports.com

Overshadowed this week by the starts of the Stanley Cup and NBA Finals, a horse with a real shot at the Triple Crown and the Mariners causing MLB to swoon at their June — not to mention the cramps of LeBron James, which has been to Twitter what milk is to kittens — NHL Commissioner Gary Bettman appeared Wednesday to have slipped in a stiletto into Seattle’s hopes for an expansion franchise.

Bettman, speaking to reporters before Game 1 of the Finals, said:

We’re not planning on expanding. We’re not in an expansion mode or formal expansion process. We listen when people say, ‘We’d like to come visit you and tell you why we’re interested and where we’re interested.’

“Seattle, which seems to have the most number of people interested . . . the fact is, there’s no building that’s on the horizon. The person who controls the rights to build a building in Seattle is intent upon having an NBA team before he builds a building.”

Bettman, who apparently has a connection to the Internet, was aware that Steve Ballmer, once Chris Hansen’s partner in the SoDo arena project, dumped Hansen for gratification more instant, buying the Los Angeles Clippers for $2 billion. Along with many others, Bettman seems to have concluded that the arena deal is dormant, if not dead.

“Based on what’s happened to date,” Bettman said, “and the fact that his partner has now bought a different franchise, I don’t know that there’s any prospect of a building in Seattle. It’s nice that there’s interest, but there’s really not a whole lot for us to do with it.”

That sounds definitive. But if you were to have joined me at the foot of the master of passive-aggressive manipulation, David Stern, over these many years, you might recognize that his remarks were less of a rebuke and more of a prod.

Bettman, named sports executive of the year last month by Sports Business Journal for creating the NHL’s best business profile in its history, worked his way up in Stern’s NBA junta to No. 3 before becoming NHL commissioner in 1993. He expanded the league from 24 to 30 teams, but none since 2000.

He was criticized, justifiably at the time, for overreaching into the American south, where hockey has no tradition. And trouble remains in markets for the Coyotes in Phoenix and the Panthers in Florida.

Nevertheless . . . the worlds of sports, media and technology have changed dramatically in the last 15 years.  So much so, that all sports find themselves in the fortuitous position of being the last and only regularly scheduled subject matter on television, broadcast or cable, that is appointment TV. Everything else, including news, is easily obtainable by increasing numbers of consumers on mobile devices and via subscription services.

The rapidly expanding TV-rights fees for all sports reflects the fact that games are the only programming that can guarantee millions of eyeballs at an appointed time to see commercial advertising. Bettman knows his sport is growing sufficiently that expansion is reasonable, particularly when there is an opening in the 13th-largest U.S. market that is a three-hour drive from an NHL hotbed in Vancouver.

He saw the Seahawks parade, as well as 12th Man flags across British Columbia. And he knows that, for civic extortion purposes, the Seattle market temporarily is more valuable to the NBA vacant than occupied.

Otherwise, he wouldn’t have bothered to fly to Seattle May 6 to meet Mayor Ed Murray and King County Executive Dow Constantine. Since Bettman didn’t hear what he wanted regarding the city’s immediate willingness to accept a rewritten memorandum of understanding with Hansen to put hockey first in the proposed building, he did what he could do this week.

Carefully avoiding use of anyone’s name, a classic Stern tactic, he indirectly kicked the butts of Hansen, the city and county, and potential team owners to get busy. This is how the CEOs of monopoly operations use their bully pulpits.

To cite a locally painful precedent, during Hansen’s attempt to purchase and relocate the Kings from Sacramento, Stern in February 2013 publicly warned Sactown mayor Kevin Johnson that his early efforts at assembling investors to match Hansen’s offer were inadequate. A little later, he trumpeted the glories of the Seattle group.

“There’s a great and strong application from a terrific city to bring in a third and possibly a fourth team in a brand-new building, well-financed ownership group, without the ability yet to build, because there are several things that have to be overcome,” Stern said. “But that’s really good. So if you’re a commissioner, you like that.”

Commissioners like pitting cities against each other. But Stern’s flattery of the Seattle bid was pure BS. He had no intention of allowing the Kings to move. He deliberately manipulated events to get his desired outcome.

Now Bettman is attempting the same to induce his desired outcome in Seattle, although his chances are not as good because the NHL has no residency here and can’t threaten the loss of something the city never had.

Bettman knows that Hansen, along with potential NHL team owners and the city’s political leadership, have to generate a belief in a good opportunity. Hansen said in interviews earlier this week that he is willing to take on hockey partners as long as they get some skin in the arena game, as well as put up guarantees protecting the city’s investment, which would be about $120 million for a single team.

The arena plan, as Bettman pointed out, must come first. Presuming that a final environmental impact statement is released in September, the SoDo site will come under more intense criticism and very likely litigation. Until that is resolved, the NHL will hold off considering expansion, which means the city council will not be compelled to take a vote on whether to re-do the MOU for hockey.

All of that makes the arena project sound like a long shot, which it us. Unless, of course, the prospective NHL owners, with Hansen, see their way clear to finance privately the arena construction, which removes all politics from the equation.

While that may seem unlikely from Hansen’s perspective, given what he believed was already a screamin’ deal he presented the city, much has changed since he drew up that financing plan in 2011 that counted on the city’s ability to borrow construction money more cheaply than could a private developer.

TV rights continue to soar, Seattle’s economy continues to grow, sports success has come to the region, technology continues to find ways to extract more revenue from sports consumers, the Golden State Warriors have proposed an all-private arena for San Francisco — and a middling NBA franchise is worth $2 billion.

Beyond sports, there is a larger utility for an arena. For all its continuing influence in tech and world health, Seattle still lacks a building big enough to host a top-end, indoor convention/sport/event. Every mover and shaker in this town knows it.

Next time you’re at a high point that overlooks downtown, count the construction cranes. Most are astride private projects. The money to create these projects comes from all over the world, and is plentiful. Something must be happening in Seattle to draw this amount and diversity of private investment.

The point? Things change fast. When it comes to sports business, things change faster than fast. And 2011 is so  . . .  2011.


YourThoughts

  • 1coolguy

    Art – As I recall when Ackerley remodeled the Key in the mid-80′s he purposefully kept the seating below the minimum needed for an NHL team, which I believe was 18,000.
    If this is accurate, can you expand on what Ackerleys’ motivation was and why the city went along?
    I concluded he didn’t want to share the Seattle market with a team that may compete for ticket sales.
    It seemed counter intuitive at the time and still does.

    • RadioGuy

      My two cents’ worth until Art responds: Your take is exactly what I’ve heard over the years. The last thing Ackerley wanted was an NHL team that he’d have to battle for prime playing dates while draining attention away from the Sonics. As a result, the Key seats about 11,000 for hockey (the NHL minimum was 15,000 at the time) and the scoreboard was moved into a position that at least partially obstructs sightlines for about 2,000 of those seats in the end zone. It wasn’t counterintuitive to ACKERLEY, who was creating an arena monopoly for his team, but the Seattle City Council signed off on the renovation without considering that the NHL might want to put a team there someday because Ackerley was footing part of the cost. We’re now benefitting from their shortsightedness

      • LennyLuvsLonnie

        The Key remodel occurred during the ’94-’95 season. Sure, Ackerley wanted to limit competition, but the limited scope also lowered costs, requiring no additional taxes, and retained the original Coliseum’s iconic roofline.
        At the time, it was a reasonable civic and business move but eventually failed in part because the NBA had a broken business model from the late ’90s through their new union agreement in 2011. Since then, player salaries have flattened, the game has grown a more international audience, and the TV dollars have exploded.

        Reflecting that changed reality, the new arena in Brooklyn holds just 700 people more than the Key. It does, however, have more lucrative suites, like the proposed SoDo arena.

        • jafabian

          Agreed with both you and RadioGuy. IMO, the Key Arena remodel didn’t fail the NBA, the league’s economics has. For a team to make as much profit it can it needs to have their own facility, something that can’t happen in the city-owned Key. It’s still a great place to house many events but the NBA wants full profit.

          • art thiel

            You’re right, the NBA failed the Key, the Key didn’t fail the NBA. The NBA locked out in 1999 and 2011, which proved its model wasn’t working.

            One problem with the Key is that by now, it is outdated, but people don’t believe it, and because it’s paid off, no one is moved to do any heavy lifting.

      • art thiel

        The info in this thread is largely correct. Some elaboration here: Ackerley owned SoDo land where he wanted to build a basketball/hockey arena. I nicknamed it the “Ackdome,” which he wasn’t thrilled with. But no one came forward in Seattle with willingness to buy a hockey team and be Ackerley’s tenant in second place behind his NBA team.

        So the idea died, and Ackerley turned to remodeling the Coliseum. It’s true that he wanted no winter competition, but his experience told him it was probably pointless to go to the trouble of building out for hockey.

        The flaw in the Key was in the lease. The city let the Sonics have a 15 year lease, even though the construction bonds went 20 years. That’s what Schultz took over, and what made the Sonics so valuable to Clay Bennett.

        • LennyLuvsLonnie

          Interesting details about the short lease and a previous SoDo arena vision that echoes Hansen’s. (“Ackdome”–brilliant!)

          A reminder that the real reasons behind the Supes departure were nuanced and complex. But you can sell more DVDs by demonizing some admittedly unpleasant folks who drove the blade in at the end.

          Whatever the cause, there’s a hole in my heart where a pro basketball team used to be.

  • What do I know anyway?

    Expansion (NBA/NHL) will happen in Seattle (existing teams now too expensive, thanks Steve) and the arena will be built — unless MSFT stock collapses. Why? The two most well healed NBA owners will be Seattleites practiced at getting their way. The venue with be sitting at the “T” of the two major U.S. freeways. It will be stunning, like Safeco Field, which I would go to regardless of whether the Mariners were winning or not. The Seattle Sonics (YES) will be like the Charlotte Hornets (YES), part of a New Deal for smaller markets, reducing the money pressure. NHL will directly feed into Seattle’s passive-aggressive nature. Canadians will visit. I will assume that is a plus.

    Here is how to make this happen: Celebrity ownership is working, think Michael Jordan and Drew Carey. Make Magic Johnson and Oprah Winfrey the lead owners.

    • art thiel

      Well, there we have it. The plan. I hope you meant “heeled” instead of “healed”; don’t want Ballmer or Allen injured.

      Does Kenny G qualify as a celebrity?

      • RadioGuy

        Maybe to the bluehairs who still listen to him when they can’t find their copy of John Klemmer’s “Touch,” which was the template for noodlers like Kenny G and David Sanborn but still a good date album in its time (although nothing can match Al Green).

  • jafabian

    Talk is cheap. First Bettman wants in Seattle, then he says no. Then he brings in prospective NHL owners, then backs off. With the Key finally hosting some other national sporting events like NCAA basketball semi-finals that could get the attention of the NBA and NHL to own up that Seattle is a great sports town worthy of their attention. But I’m sure at this point the city is pretty sick and tired of the games those respective leagues play. I know I am. Color me uninterested until they bring something real to the table. I get more excited reading about the Seahawks OTA’s.

    • art thiel

      Your adrenal gland is your own.

      Bettman wants to come here, which is why he engaged in his passive-aggressive scold of the principals in the deal. As I wrote, that’s how a bully pulpit works.