BY Art Thiel 05:19PM 07/07/2015

Thiel: NHL expansion window reveals little, but . . .

NHL expansion window opens for up to two candidate cities in 2017-18. But Hansen’s arena plan has yet to announce hockey partner, and Bartoszek’s Tukwila plan is in infancy.

A 20,000-seat arena in Las Vegas will be ready April 1, 2016 / MGM Resorts Intrnational

The latest municipal extortion gambit by the NBA was launched this week when the Milwaukee Bucks president directly invoked the cities of Las Vegas and Seattle as relocation options if the city, county and state didn’t cough up $250 million in direct tax subsidies.

Even though there is no suitable arena solution in Seattle, according to the NBA’s own reckoning from 2008, which remains unchanged in 2015.

In other words, the NBA is saying: Seattle, we need your wizened Sonics carcass for committing more extortion, then go away.

Consider us Fredo Corleone to Adam Silver’s Michael Corleone in The Godfather:

“Fredo, you’re nothing to me now.”

With Steve Ballmer already in the NBA with the Clippers, Seattle no longer has a mega-wealthy crazy man appealing to the NBA as an owner ready to buy the the Bucks and relocate them, which the league really doesn’t want to do anyway.

Repeating with Milwaukee the ugliness of the Sonics relocation to Oklahoma City would be a symbol of economic failure and a throwback to the petty tyranny of the loathsome tin-pot dictator, David Stern.

Even if the NBA decided to move the Bucks, Las Vegas is scheduled to open its new, 20,000-seat arena April 1, 2016, a $375 million edifice privately financed between the MGM Resorts and Anschutz Entertainment Group. Given the choice between a turn-key building and support from a would-be owner, Vegas billionaire Bill Foley, versus more dithering in Seattle, the choice is plain.

What Seattle does have is Chris Hansen, the arena developer with a basketball-first arena agreement who soiled his reputation with Seattle politicians after his handling of the attempted poach in 2013 of the Kings from Sacramento.

Those city council members are all up for election this fall, and five of them must support any arena plan once he is certain to get a team via relocation or expansion.

Voters in ultra-liberal Seattle are likely to make Hansen and arena support so radioactive that no council candidate will touch it. Particularly after Hansen’s former partner, Ballmer, who was in on the 2013 ask for up to $200 million in city-county borrowing capacity, paid $2 billion for the Clippers, about four times market value.

Ballmer not only screwed Hansen by inflating the going rate for franchises, he undercut him by giving council candidates a big club:

“Your partner had $2 billion for a team, and you’re borrowing from us?! Getouddahere.”

But if the NBA currently is a non-starter, the NHL is little better. As the commissioner, Gary Bettman, put it when he disclosed that that league would open Monday through Aug. 10 an expansion process for interested cities, “Nobody has the arena act together yet in Seattle.”

On top of that, Bettman said that he thought the one-time expansion fee of $500 million per city sounded good to him. But at least one among the potential expansion candidates, Kansas City, quickly gagged on that number.

Lamar Hunt Jr., who owns a minor league hockey team as well as the NFL Chiefs, called $500 million “a ridiculously big fee,” and told the Kansas City Star is he is not aware of anyone in Kansas City who will make a push for a team. “It’s not on my radar. It’s not on this team’s radar.”

That observation may also apply in Seattle. A person familiar with conversations among potential investors interested in the NHL reported no excitement in making a strong commitment to an arena/expansion-fee project that is likely north of $1 billion for a sport with no track history in the market and is far more reliant on local gate revenues than national TV revenues. Plus, it is the only city in America where an MLS franchise is a legitimate contender for the discretionary sports dollar.

“There was only one Ballmer,” he said. “Others might be in the Howard Schultz class, and he took on 57 partners.”

That was a reference to the CEO of Starbucks who was the 30 percent and largest owner of the Sonics. Schultz sold out to Clay Bennett in 2006 partly because he couldn’t manage his investors, nor help fund a replacement for KeyArena. And that was before the passage in 2007 of I-91, an initiative that became a city law unique in the nation, mandating pro sports teams renting city facilities return a modest profit to Seattle.

Moreover, Hansen is clear that not only he will not be an NHL owner, he wants any potential NHL owner to partner with him in arena construction costs and ask for nothing further from the public side or him, beyond the current terms of the MOU.

A tough sell. The NBA already has conveyed privately its disdain for the MOU’s terms, because it asks so little from the public side and puts too much risk on the private side — a bad precedent for sports leagues.

If Hansen’s Sodo project is boxed in, that leaves Ray Bartoszek, the Connecticut investment banker who has a suburban site in Tukwila, the ear of NHL and and apparently a scheme to fund privately the entire project.

But $1 billion? In the ‘burbs? Really? Apparently so. Unlikely as it sounds, a source said Bartoszek will make expansion application to the NHL despite no apparent connection to the many wealthies in this region with massively disposable income.

Which is a good point to mention a caveat to the gloominess outlined above:

In the matter of sports franchise creation/relocation, nobody ever knows. Things change. Stuff happens.

Anytime a business circumstance combines sports and crazy men with crazy money, preposterousness usually rules.

Recall if you can the wild Hansen/Ballmer pursuit of the Kings and the ends to which Sacramento went to save them. There has likely never been a nuttier drama in modern sports franchise history.

Now, besides Hansen and Bartoszek, two separate groups are reportedly considering creating bids for Bellevue arena location.

Implausible as it sounds, remember that no one had a clue about Hiroshi Yamauchi in 1991 buying a team he never saw (nor would see) in a place he would never visit. And no one imagined that the Nordstroms in 1988 would sell the Seahawks to a California car collector who would attempt to move the team to Orange County eight years later.

Nor would we have imagined the Seahawks being rescued by a statewide vote funded completely by Paul Allen, who took voter approval and bought the team from the dubious Ken Behring.

My best analogy is that the experience of watching the sports elites maneuver, disappear and reappear, is akin to watching through a ballroom keyhole an 18th century waltz among European royal families. Lots of color, wealth and wonder, but little factual news regarding new principalities.


YourThoughts

  • Jamo57

    “There has likely never been a nuttier drama in modern sports franchise history.”

    I always thought the story of the Pilots equipment truck leaving Arizona at the end of spring training and not knowing where they were headed, Seattle or Milwaukee, was pretty darn nutty. Of course the constant between the two is our fair city.

    “akin to watching through a ballroom keyhole an 18th century waltz among European royal families. Lots of color, wealth and wonder, but little factual news regarding new principalities.”

    Maybe Bartoszek can add John Malkovich to the ownership group to help navigate the politics.

  • MrPrimeMinister

    “The latest . . .”? You mean there will be more?

  • MelloDawg

    Well, Art’s head is conveniently up his rear as always. I do like the continuous anti-Hansen, anti-Sodo nonsense. My guess is the Ray B camp is the one that butters his “Sports Press NW” bread. Didn’t he also imply that Hansen wouldn’t be able to afford the Bucks after Ballmer left?

    Best of luck with your continued attempts to get click views Art!

    • art thiel

      Thanks for clicking, Mello. If it hurts you so much, feel free to stop.

  • MelloDawg

    I mean, I read 2 sentences from the article and it’s clear that this is nothing more than sensationalism in an attempt to get page views. There is no objectivity in the piece whatsoever, yet Thiel apparently makes his claims on Hansen’s group’s wealth as if it’s fact

    • art thiel

      If this was sensationalism, you have a low threshold, Mello. And yes, it’s analytical, as has been most of my stuff. But I have no dog in the hunt.

  • jafabian

    Hansen needs a Slade Gorton more than he does a partner to replace Ballmer. Someone with some political clout who can help in putting together a solid ownership group and talk to Silver on working with them. Just like Gorton did with the M’s.

  • Kirkland

    I really wonder why a hockey person or group outside of Bartozek hasn’t pushed his chips in the pile publicly. Seattle is a natural fit for the NHL, and the league wants to be here. Is everyone just too put off by the Seattle politicians and/or unable to work with Hansen?

    As for Vegas, if the Bucks stay put, the NHL will get there first. Ownership, ticket pledges and the building are there.

    • art thiel

      As the column says, the market is unproven for hockey, which relies much more on expensive tickets than TV revs. More unknowns than with NBA. Many rich guys here are wary.