MSG investing in new Islanders arena on Long Island is so crazy it might just be crazy

There are rumors, and then there are rumors that lead to eyebrow-raising headlines:

A supergroup of New York sports executives, including owners of the New York Rangers and the New York Mets, is lining up to invest in a new arena just outside of Queens for the National Hockey League’s Islanders, according to people familiar with the discussions…

The new arena proposal is a joint venture between the Islanders, Oak View Group and Sterling Project Development, said the people, who asked to be anonymous because the talks are private. James Dolan’s Madison Square Garden Co., which controls the Rangers, long the Islanders hated rivals, is an investor in Oak View Group, the private equity group run by Tim Leiweke and Irving Azoff. The Wilpon family, which owns the Mets, controls Sterling Project Development.

Much of this isn’t new: Bloomberg News reported last summer that the Islanders owners were looking at the Belmont Park racetrack site as a potential backup to building an arena next to the Mets‘ stadium in Willets Point, and apparently (according to those “people familiar with the discussions”) it’s now moved up to being Plan A. The new bit is the involvement of Oak View, the company run by former AEG exec Leiweke that has also expressed interest in renovating Seattle’s KeyArena, and which includes Dolan’s Madison Square Garden Co. as an investor.

Let’s start with the ways this makes some sense: Belmont Park is close to the Islanders’ old fan base, it has decent transit and highway access, and the state has been looking for a way to redevelop the site for years to no avail. And if you’re going to look to build a whole new arena in an already-glutted market, who better to turn to than Leiweke, who is desperate enough to make a splash in the arena game that he could well be willing to take on plans that more established arena operators might consider too risky.

On the other hand … this makes no damn sense. The New York City area already has arenas in Manhattan, Brooklyn, Newark, and Nassau County — it just had to close one in New Jersey because there weren’t enough concert acts to go around, and it’s now apparently being used as rehearsal space. Adding another arena would just put one of the existing ones on the brink. And it really makes no sense for MSG to want to spend hundreds of millions of dollars to compete with itself — unless Dolan thinks he’s better off owning two arenas to try to drive Mikhail Prokhorov’s two arenas (Brooklyn and Nassau) out of business, which would be a strange kind of loss leadering, but then, Dolan is after all an idiot.

There’s also always the possibility that the Islanders owners, Mets owners, and Oak View could try to demand public money to sweeten the pot: Bloomberg reports vaguely that “New York Governor Andrew Cuomo has taken part in the proposed arena talks and is seeking to attach infrastructure improvement projects to it,” and we know that Cuomo is big on building things that he can call “infrastructure,” especially when he can do so via a combination of tax breaks for private developers and Ida Know. There’s also always the possibility of going back to Nassau County voters to see if they’d be more amenable to funding a new arena now, or maybe seeing if Islanders fans on Long Island would buy commemorative bricks or something to stop having to trek to Brooklyn to see games.

All of which is to say that there are way too many unknowns here to say whether this story could have legs, or is mostly just the Islanders owners trying to leverage Prokhorov into giving them a lease extension in Brooklyn that lets them keep their guaranteed-income deal and/or renovates the Barclays Center to be a less sucky place to watch hockey. I’m in an optimistic mood today, so I’ll say I hope that this is another indicator of a burgeoning arms race within Big Arena that sees billionaires throwing money at new venues without demanding big public subsidies, just because they’re trying to drive each other out of business. It couldn’t end well — anybody remember the Borders-Barnes & Noble war? — but at least the only casualties would be some private corporation’s bottom line.

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20 comments on “MSG investing in new Islanders arena on Long Island is so crazy it might just be crazy

  1. Neil,

    Weren’t you the one who said that the Brooklyn arena sucks for concerts?

    Oak View is all about concerts (it’s Irving Azoff’s group, much moreso than Dolan’s). To me it makes total sense to build a cheap arena for the Islanders, with as few suites and as much attention to acoustics and sightlines as possible.

    1. Pretty much all new arenas suck for concerts. And already MSG and Barclays and Prudential are in a price war when it comes to attracting performers — adding yet another option isn’t going to help matters for them.

      1. You could’ve said that about the Pond and Staples center in LA (along with the Hollywood Bowl & other outdoor venues eight months per year) before the Forum was renovated. And I’d expect to see multi-night stays in the NY metro area; split between MSG & Long Island, if this happens. It won’t necessarily hurt MSG as an arena.

        1. Nah, acts typically pick one from among Prudential, MSG, or Barclays on each tour. It’s not like the club scene, where you might see someone play a show in Manhattan and a show in Brooklyn (though even then, that’s rare).

          1. In Chicago, the Ringling Brothers Circus would play United Center for a week, and then move out to Rosemont for a week, but they want be doing that anymore. That clown car has driven off into the sunset.

          2. Neil,

            I owe you $50 from the fact that Alberta did not give Edmonton $50M (CAD, which equates to $1.7M USD we go by the value of the person in charge of the country), and I’d be willing to go double or nothing that acts will book MSG and Elmont back to back if Oak View builds an arena in Elmont.

          3. The problem with that is that if the Elmont arena sits on the drawing board forever, I can never collect my loonie winnings.

  2. I figure by 2023 Jay-Z and Springsteen will have residencies at Barclays and Prudential. Maybe Billy Joel at Nassau.

  3. Here’s a theory. Maybe the Rangers want the Isles out of Brooklyn so that they can gain more of a foothold there. If the Islanders play in Brooklyn, then they will dominate that market, if they play near Queens, they Rangers and Islanders will likely share the market.

    1. I have literally never seen any Islanders gear worn in Brooklyn aside from when it’s by people headed to/from a game at Barclays. The Nets have done a better job of infiltrating the market, and the Nets are barely a basketball team right now.

      1. Well the Nets have been there longer but I guess you would know more about the subject, given that you live there.

        1. I saw Nets gear, and heard talk about Nets tickets, before they even arrived.

          I think some of it is bad marketing by the Islanders (they’re called the *Islanders*, for pete’s sake), and some of it is that the Isles are seen as enemies in Rangers territory where the Nets were never really the Knicks’ rivals.

    2. Brooklyn is already a highly dominated Rangers market. It would take a rebranding (as Neil implies) and 20-something years for the Islanders to make a serious dent.

      For most of their first 2 decades, the Devils were way behind the Rangers in North Jersey popularity. It took 3 Stanley Cups & children who watched those successful teams to broaden their fan base. The Islanders did the same thing in the early 80s. The decades of futility and (to a certain degree) cruddy arena made a lot of that base go away.

  4. James Dolan and Cablevision do have an interest in keeping the Islanders in the NYC area since they own the TV rights to the Isles through 2030. If they leave for another market, those TV rights are worth nothing. Cable TV is a much bigger business for the Dolans than sports teams or arena ownership, and it’s possible they would sacrifice some dollars in the arena business to keep the cable TV money flowing. Of course, this only makes sense if the Islanders are a legitimate threat to relocate.

    1. True, but I would say the Isles owners have a far more vital interest in staying in the market than the Dolans have in them staying. The owners paid for a NY team. Any move out of the NY market means they paid for something they no longer own.

      This is all about them trying desperately to find a better option than the one they have (at Barclays, which despite it’s problems still guarantees them more revenue than they claimed to earn at Nassau). The urgency is, I think, based on the idea that they may not have their current option much longer.

      This is something the Islanders have done to themselves. Nearly all of it is down to a series of terrible decisions by Wang, first not to participate in funding the original Brooklyn design (which lead to a redesign specifically to save money/make the building unsuitable for hockey). The second was to move to Brooklyn anyway.

      What can you expect from a clown who made his backup goalie his GM?

      While we might feel some sympathy for the new majority owners (who didn’t create the mess), the fact is they knew what they were buying. Further, I have to assume that the sale price was heavily discounted because of the hurdles Wang created for himself. As I recall Wang and Kumar paid approx $185m (or $260m in present value). Didn’t Ledecky and Malkin pay just a shade over $305m for the team?

      Consider what other franchises (even NHL franchises) have sold for in recent years… Chuck took a haircut, and well deserved.

      1. Totally agree.. If rumors true , the wildcard is the Mets involvement. They can easily get public funding for a baseball arena built with hockey in mind.

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