As soon as news broke last week that the Golden State Warriors owners were planning to build a new arena in San Francisco entirely with private money, I wondered if having only their old home, Oakland’s Oracle Arena, to compete with would make it easier for them to avoid the fate of, say, Brooklyn’s Barclays Center, which has had to offer discounts to touring acts to beat out Madison Square Garden for concerts. And now the San Jose Mercury News reports that the Bay Area might not be big enough for the both of them:
For now, the Oracle Arena has two things going for it: The Golden State Warriors and the fact that the nearest competitor for major shows is 40 miles away in San Jose.
But that soon will change, and the arena, which already fails to turn a profit, will have to change too if it is to survive, sports facility experts said…
The Warriors accounted for nearly half the 110 events staged at the arena during a recent 12-month period — and even with the team still around, the arena is forecast to post roughly $6 million in operating losses this year and next, according to budget records from the Alameda County-City of Oakland Joint Powers Authority.
A San Francisco arena would definitely have the upper hand in luring acts — it’s the side of the bay where more of the money is — but the competition could end up being bad for both buildings, since promoters could play the two off each other to get the best rates. Which could be bad for Warriors owners Joe Lacob and Peter Guber as far as paying off their construction costs — though, of course, since it’s their own money they’re risking, that’s not our problem.
All this is assuming, of course, that Oakland doesn’t simply pack it in on Oracle and demolish it to make way for a new Raiders or A’s stadium, something arena board chair Nate Miley floated last week, though of course without any details about cost or who’d pay for all this or anything. One complication, according to the Merc News, is that the Warriors apparently have a lease clause that lets them off the hook on $62 million in outstanding Oracle Arena debt if the building ceases operations. Meaning we could be seeing Oakland weighing whether it’s a good idea to keep a money-losing arena in operation just to avoid letting its former tenant get out of paying for the arena’s last renovation. I really can’t say it often enough: Get somebody to read these leases before you sign them, people.