Warriors: We need a new $1B arena because we don’t like the restaurant manager at the old one

The San Francisco Business Times has a report out on the pressing matter of “Why the Raiders, A’s and Warriors want new homes” (verbatim headline), and the answer is: They all need to tear down their old venues and build entirely new ones at a cost of billions of dollars because they don’t like the concessionaires, duh!

Consider the recently opened BMW Club at Oracle Arena. BMW is a Warriors sponsor, but the Oakland-Alameda County Coliseum Authority contracts arena operations to Anschutz Entertainment Group. AEG, in turn, contracts arena restaurant management to Levy Restaurants.

“It’s a little bit of a challenge” to make customer service part of the overall game experience when food service and stadium operations aren’t in the Warriors’ control, team President and COO Rick Welts said.

Here’s a crazy idea: If your main complaint is the guys the county hired to run the arena operations, why don’t you offer to buy the arena operations rights from the county, and then pick your own operator? Sure, it might cost you something, but less than the billion dollars it will cost for a whole new building.

The real answer, of course, is that this is about the 74th most important reason for these teams wanting out of their old stadiums, but it’s what the Warriors president told the Business Times, so it’s what they’re going to report, dammit. Remember, kids: Friends don’t let friends read news stories that only include sports team execs and stadium developers as sources!

10 comments on “Warriors: We need a new $1B arena because we don’t like the restaurant manager at the old one

  1. Ah, yes…when I was talking to people at the city, I was told that renovating Yankee Stadium was not an option because the Yankees couldn’t take the year off and play at Shea. Why not? As the Yanks and Mets had different soda sponsors (Coke/Pepsi, the eternal battle) and different concessionaires, they would never be able to work out an appropriate rental agreement.

    So there you go.

  2. Total non-issue. They are building an arena with private money on privately purchased land. They can do what they want and really don’t have to justify much of anything.

  3. Inclined to agree with Anon here. While it’s a lame excuse, the Warriors don’t really need to make any excuses seeing as they’re paying their own way. If they think they can make more money across the Bay in the same market who are we to question that? They’re not the Oakland Warriors and they’ve never had the most cordial of relations with that city. So if they want to pay to extricate themselves from that, more power to them. They’re not the team that NEEDs a new stadium but big deal.

    The A’s too so far have also not asked for a dime despite the city’s maintenance of their current venue being below par leading to the unfortunate sewage fiascoes.

  4. I’m surprised you haven’t mentioned the Forbes’ valuations of NBA franchises, Neil.

    Apparently, since one idiot overpaid for the Clippers, every franchise rapidly escalated in value. This makes no sense to me at all. Since one idiot bought in, now everyone’s an idiot? And the funny part of that is, the Clippers are worth $400M less than what Ballmer paid. His overpayment is more than what the average franchise was worth 5 years ago. It’s mind-boggling.

    The Warriors will be worth way more in San Francisco, for sure. I’m just having a hard time grasping these valuations when, at those prices, you’re looking at probably 2% year-over-year ROI. That seems like a bubble to me, and we all know what bubbles do eventually.

  5. Doesn’t seem like the “bubble” concept means a whole lot when the amount of product is so limited and sales are so infrequent. Valuations based on income are pretty meaningless, it’s all about demand and guys with money to burn.

  6. @MikeM

    Yes, the valuations have some to do with Ballmer but it has more to do with the new tv deal that Silver negotiated. When the Forbes rankings came out last year, the deal had not been struck yet so you only had around 3 teams worth a billion. Now, with an extra $50 million a year per team, you have that billion total up to 11 teams.

  7. Oh, and I forgot to mention: That privately financed arena on privately purchased and held land is going to give SF the arena it doesn’t have. It’s the biggest city in the US without a full sized arena in city limits. So again, I’m not seeing any real issue here.

  8. Speaking of AEG, does the fact that they (along with MGM) are building the new arena in Las Vegas actually reduce the chance the city will get a top level franchise? It would seem that any prospective resident wouldn’t get the kind of revenue streams (naming rights, concessions, luxury box revenues) that are expected by franchises today.

  9. To me, these teams should have a P/E ratio, just like stocks do, and once you get to a point where the average P/E ratio is 100/1, you are looking at an imminent fall in the prices.

    We have seen the value of franchises adjust in the past. NHL. I don’t really see why the NBA would be immune here. I’m already priced out of arenas, with the price of tickets these days.

    There are quite a few better ways to invest your money. Once that psychology takes over, things might get pretty weird.