Seattle arena finally making money, now that NBA has left town

Ever since the Seattle Sonics abandoned KeyArena for Oklahoma City, the old venue has been … doing really, really well, actually, according to the people who run it:

The arena is now quite profitable, thank you — much more so than in the days of the Sonics, to the surprise of many who saw an uncertain future for the sports venue after the team’s departure in 2009.

The Lower Queen Anne facility has gone from losing money in the Sonics’ final years to turning more than $1.2 million in profit for Seattle last year.

The trick? Instead of having to set dates aside for the Sonics, the arena is booking more concerts, which actually pay rent. Hmm, where have we heard this before?

It certainly helps that KeyArena’s construction debt is paid off, with the help of the Sonics owners paying off a chunk of it as part of their deal to skip town. Still, this is a good reminder that sports teams aren’t quite the economic anchors they pretend to be, and maybe a good sign that KeyArena could coexist with a new building if one is ever built to bring back the NBA to—

Ironically, if the NBA ever returned to Seattle, likely in a new arena, the Sonics’ old home would suffer. Another reason KeyArena has remained sustainable is because it hasn’t had to compete with another arena.

Forget I said anything. Seattle, be very happy you only have one arena, and one pro basketball team.

Vegas would be “disaster” for NHL expansion, Seattle not much better, according to Fivethirtyeight’s numbers

Fivethirtyeight has taken a look at the hard numbers behind the possible NHL expansion targets [or at least as hard as you can get from counting up Google searches for "NHL" — see comments], and pretty much concurs with what I said off the top of my head the other day: Quebec could work, as could Toronto (leaving aside the pesky problem of the Maple Leafs wanting that market all for themselves), but Seattle and especially Vegas would be pretty lousy NHL sites:

Teams in markets with fewer than 300,000 hockey fans, however, have tended to lose money, and that’s where the wisdom of adding franchises in Seattle and (especially) Las Vegas gets iffy. We estimated that Seattle contains about 240,000 NHL fans — fewer than that of Phoenix and Florida’s Tampa Bay, home to two franchises that have struggled to turn a profit for many years. And if Seattle is an enigmatic choice by this metric, Las Vegas would be a disaster. According to our estimates, there are only 91,000 hockey fans in the Vegas media market, which is nearly 40 percent fewer than even Nashville, Tennessee, the least-avid current NHL city, has.

Interestingly, Fivethirtyeight estimates that Kingston and Halifax, and maybe even Moncton, Sherbrooke or Sudbury, could viably support an NHL team better than the U.S. cities under consideration — and better even than five current NHL cities, Phoenix, Columbus, Raleigh-Durham, Miami, and Nashville — thanks to the fact that there are actually people who like to watch hockey in Canada. No doubt there are other factors here at work as well — TV networks, in particular, care as much about overall media market size as whether the market contains any actual hockey fans — but it’s still a worthwhile reminder that just because a city has possible arena plans and some name recognition doesn’t mean it’s necessarily a good place to start up a sports franchise.

NHL to add four new teams for $1.4B by 2017 purple monkey dishwasher

If you loved last March’s unsourced rumors about how the NHL is ready to expand, expand, expand, you’ll love today’s similarly unsourced rumors about the exact same thing! Take it away, Tony Gallagher of British Columbia’s The Province:

Sources close to the situation have indicated Las Vegas is a done deal, the only thing to be determined being which owner will be entitled to proclaim that he brought the first major league sports franchise to Sin City…

A new team close to the newly renamed Arizona squad and California’s big three is all but assured, the only question being when and with which other city. Or should that be plural?

With all the activity going on in the Seattle area in the last little bit it would be quite a stretch to imagine that much time and effort being spent by so many wealthy men being frittered away for nothing.

(Is it just me, or does this entire thing read like a gossip column? I kept waiting for “What mid-sized city was spotted on the dance floor, cavorting with NHL deputy commissioner Bill Daly?”)

As Deadspin notes, Howard Bloom of Sports Business News then upped the ante by predicting that Quebec, Seattle, Las Vegas, and a second Toronto team will all be joining the NHL by 2017, in exchange for $1.4 billion in expansion fees.

This is simultaneously crazy and not-crazy. On the not-crazy side, $1.4 billion, people! In a world where Steve Ballmer is willing to plunk down $2 billion for an NBA team, and MLS franchises are going like hotcakes, it would be foolish not to at least consider taking some of the money that the world’s billionaires are waving around like drunken sailors.

On the crazy side, with the exception of Quebec, all of these are seriously problematic markets. Seattle doesn’t have an arena that really fits hockey, and any hopes of building one would depend on the NBA first approving a new basketball team for Seattle, which doesn’t sound like it’s happening anytime soon. Vegas is Vegas, which is a small, poor city with a bunch of people with lots of spending money visiting all the damn time, which isn’t a great recipe for season ticket sales. Toronto would run up against the Maple Leafs corporate buzzsaw, which would undoubtedly try to seize a chunk of that expansion fee as payment for incursions into its territory.

So, there are some stumbling blocks that make one wonder if Gary Bettman has really thought this thing out. (Not that thinking things out in advance has exactly been Bettman’s strong point in the past.) If the reports are true, and NHL officials are thinking clearly, it seems far more likely that this is a trial balloon designed to see what arena concessions they can get by waving a possible expansion team under a few municipal noses. Guess we’ll find out soon enough — 2017 isn’t that far away.

Hansen finds owner for nonexistent NHL team to play in nonexistent Seattle arena

Hey! Chris Hansen, the would-be Seattle arena building, knows a guy who wants to own an NHL team! He doesn’t have an NHL team, but if he did, he would totally agree to play in Hansen’s arena, which he also doesn’t have! In fact, they have an agreement to do so — a “non-binding” agreement!

To be slightly fairer, Vancouver, B.C., real estate baron Victor Coleman does apparently have at least some support in the NHL, according to KING-TV’s Chris Daniels, who reports that “one league executive describes him as ‘the real deal,’ and he was flanked by the NHL’s top leaders during a clandestine meeting in Seattle back in May.” Still, Hansen has made clear that he’s not building an arena until he has an NBA team, which he really doesn’t have. And anyway, getting approval from the NHL was never going to be the problem (though deciding on whether it would be a relocated team or an expansion team could take a while), it’s getting an arena, which see above re: no NBA team.

In other words, not much to see here, move along. Unless you just want to hear a man reminisce about the day that the Canucks played their first game.

Gretzky denies interest in owning nonexistent Seattle NHL franchise in nonexistent Seattle NHL arena

This is from the New York Post and so probably pretty unreliable, but everyone else is writing about it so I suppose I might as well too: Wayne Gretzky is reportedly—wait, what’s that?

Wayne Gretzky’s agent is denying a report that the Great One is trying to bring an NHL team to Seattle…

Darren Blake, Gretzky’s agent, told The Canadian Press in an email that the 53-year-old Hall of Famer isn’t involved in any bid.

“As you can imagine prospective team owners from various franchises call frequently to gauge his interest in coming on board. Seattle is no different,” said Blake.

Oh, good, we can ignore this after all. And not just because what any prospective Seattle NHL team needs isn’t an owner, but somebody willing to build an NHL arena. How’s Gretzky with a trowel?

Ballmer reportedly wins $2B bid to buy Clippers, entire sports world turns upside-down

Okay, hands up everybody who saw this coming:

Los Angeles Clippers owner Donald Sterling does not have the authority to stop a $2 billion sale of his team because he has been determined to be mentally unfit to make decisions related to the family trust, a person familiar with the situation told USA TODAY Sports.

The Sterling Family Trust owns the team, with Donald and his wife Shelly each owning a 50% share. The trust spells out provisions and procedures related to the mental capacity of the trustees, and Donald Sterling did not meet the standard in a determination by experts, giving his wife sole decision-making power for the trust, the person said.

Shelly Sterling reached a deal Thursday with former Microsoft CEO Steve Ballmer to sell the Clippers for a record $2 billion.

That’s pretty … I guess “crazy” would be an insensitive way of putting it, huh? Let’s go with “unexpected,” though that seems a bit understated if the denouement of this whole Clippers mess is that everyone involved gets to avoid messy lawsuits and ownership votes to eject Sterling because of a family trust’s private psychologist.

Easier to designate as madness, meanwhile, is that $2 billion sale price. (As yet unconfirmed, but reported by multiple sources.) As I discussed yesterday over at Sports on Earth, it was expected that the Clippers were going to sell for a record price, given escalating sports team values, their presence in the mammoth L.A. market, and the fact that for once they aren’t league doormats anymore. But consider that the previous record, set just last month, was $550 million for the Milwaukee Bucks; and that earlier this year Forbes estimated the Clippers to be worth just $575 million, with the NBA’s most valuable team, the New York Knicks, clocking in at just $1.4 billion; and that the only sports franchise ever to sell for $2 billion was the L.A. Dodgers in 2012, a team that plays in a more popular sport and earns more than double the Clippers’ annual revenues, a figure that will likely hold true even after the Clips renegotiate their TV deal in 2016; and you’ll be forgiven for wondering whether Ballmer shouldn’t have his head examined as well.

The leading theory for what the hell just happened is what you might call billionaire glut: Thanks to the U.S. economy’s increasing propensity for concentrating all its wealth in a tiny number of people, there are a heck of a lot more rich guys like Ballmer in the market for sports teams these days, and not an appreciably larger number of sports teams for sale. That imbalance of supply and demand drives prices through the roof, with would-be hoops magnates bidding each other into oblivion in order to find something to buy with their money. (It’s not too unlike the real estate market in places like Vancouver, where Asia’s one-percenters have created a housing bubble by buying up condos left and right simply as a place to park their money — though you could argue that owning an NBA team, even the Clippers, is more fun than an apartment in Vancouver.) It has to stop somewhere, and it could yet be that $2 billion for the Clippers will be seen as an outlier — even Nate Silver, in his regression-analysis-driven projections of the effects of billionaire glut, could only come up with a Clippers value of $580-950 million — but it does help indicate why sale prices seem so suddenly out of whack with actual team revenues: These are rich men’s toys, yes, but they’re exclusive toys, and there are a lot more rich men wanting to be the ones to find them under their Christmas tree.

The fact that it’s Ballmer who is Clippers owner-in-waiting, meanwhile, means that he’ll no longer be part of Chris Hansen’s proposed ownership group in Seattle, where he was the moneybags behind Hansen’s hey-kids-let’s-put-up-an-NBA-team enthusiasm. Hansen’s supporters are trying to put a happy face on this, but with no team, no deep-pocketed partner, and an arena deal that expires in 2017, things aren’t looking too rosy right now. Though maybe once the NBA sees what nutso prices those billionaires are willing to pay for teams, they’ll rethink expansion.

Could Seattle get an NHL team to play in KeyArena? (SPOILER: no)

NHL officials may be decidedly noncommittal about putting a team in Seattle, but that isn’t stopping the sports media from getting all excited about how Seattle may be getting an NHL team, dudes! Or at least speculating where one would play, with the Seattle Times sports business writer Geoff Baker speculating that maybe a team could play at the existing KeyArena:

With no Sodo arena deal in sight to entice the NHL to award a franchise, [investment banker Ray] Bartoszek is seeking alternatives: the most eye-catching being a proposal to pump tens of millions of dollars into overhauling KeyArena into a modern, NHL-only facility.

“I think we’ve got to get away from this idea that the key to this is through that real estate,’’ Bartoszek said of the Sodo project, still awaiting political approval in a stalled process. “I assumed those guys held the keys to the city and the ability to get this all done. Now, it’s time to look at other approaches.’’

“Eye-catching” would be one word for it. “Cracktastic” would be another. Here’s a seating map of KeyArena for hockey:

That’s not easily fixed, unless you either saw the arena in half and stretch it out, or use TARDIS technology to make it bigger on the inside.

Before anyone says anything: Yes, yes, the New York Islanders are going to playing games starting next year at Brooklyn’s Barclays Center, which has a similarly screwy hockey layout. But there’s a different between convincing a single NHL owner, stuck in an arena he was unhappy with, to move to a new building with lousy hockey sightlines in order to grab a piece of the lucrative Brooklyn market, and convincing the NHL to give you an expansion team over a bunch of other similar mid-sized cities without an NHL-friendly arena.

Look, I would dearly love for a way for Seattle to get a new sports franchise without having to go through the expense of building a whole new arena. (Among other things, the world doesn’t need the carbon footprint of new construction.) But the odds on the NHL actually approving Bartoszek’s scheme are vanishingly small, even if he could figure out a way to pay for it. Right now, whatever interest the NHL has in Seattle, it’s only if Seattle gets a new arena; and with the only people in town interested in building a new arena unwilling to do so without an NBA team first, this could be a long wait.

NHL commissioner visits Seattle, looks around, doesn’t see new arena, leaves

OMG OMG Gary Bettman went to Seattle! And met with people! About hockey!

NHL Commissioner Gary Bettman and Deputy Commissioner Bill Daly flew to Seattle last week and met privately with King County Executive Dow Constantine and Seattle Mayor Ed Murray. Bettman has publicly stated the league has interest in placing a franchise in the Seattle market, but that “building issues” have gotten in the way.

Constantine spokesman Frank Abe described the meeting between Bettman and Constantine as a “meet and greet” and that “nothing was really brewing right now.”…

It’s unclear why Bettman and Daly made the personal appearance in Seattle, as opposed to discussing matters over the phone.

That’s our old pal Chris Daniels of KING 5 TV reporting, and I should think he knows as well as anyone why they went to Seattle in person: Nobody gets headlines in USA Today for making a phone call. Hop on a plane, though, and it’s Katie, bar the printing presses.

In any event, the only phrase to pay attention to in this whole article is “building issues,” since in this case that means Seattle doesn’t have an arena that can fit hockey, and isn’t going to get a new arena unless it gets an NBA team, so it doesn’t really matter what Bettman and Daly want. It’s great for making Seattle officials look like they’re doing something to try to get a new sports team, though, and for NHL officials to make it look like there are lots of cities vying to get expansion teams, so it’s all good. Except for conveying any actual meaning, if that’s what you expect from your news.

NHL ready to expand to Seattle as soon as it builds arena that it’s not going to build for hockey

It’s time for another round of “Where will the NHL expand next?” with your old pal, David Shoalts of the Globe and Mail! Shoalts reports that expansion talks are “happening at the highest level,” with Seattle, Las Vegas, and Quebec City “the cities in play.”

Quebec has a ready-made fan base for a reformed Nordiques and an arena already under construction; Las Vegas has more arena plans than you can shake a stick at and a couple of potential ownership groups (one of which, alarmingly, is the Maloof brothers). Seattle, meanwhile, says Shoalts, “seems to be the darling of many NHL governors (even though its arena plans are tilted more to the NBA).”

That’s a revealing little parenthetical, because right now the Seattle arena plans actually require the NBA: Would-be builder Chris Hansen has only committed to the project if he first gets a basketball franchise that he can turn into a revived Sonics. That deal could be revised for hockey, but Seattle city council president Tim Burgess says it probably won’t be:

Responding to an email from Sportspress NW, City Council president Tim Burgess wrote Tuesday that the memorandum of understanding is unlikely to be changed because the financial risk is too high.

“I don’t believe the MOU could be modified to allow an NHL team to go first,” Burgess wrote. “During our initial consideration of the MOU, it was quite clear that the financial risk to the city increased dramatically with the NHL-first scenario.”

And:

A source within the group helping Hansen, the Seattle native who has proposed a $500 million basketball/hockey arena in SoDo, said Hansen has given no consideration to asking the city to change.

“Chris has not proposed changing anything,” he said. “He’s always said he’s a basketball guy.”

What’s so special about basketball, anyway? For starters, Hansen actually likes the sport — all signs are that he’s willing to overpay for both a franchise and an arena if it gets him a hoops team to sit courtside for. Also, Seattle has a proven track record with basketball that it doesn’t with hockey (most of the fans of the 1917 Stanley Cup-winning Seattle Metropolitans aren’t so much around anymore), and the NBA is in general a more profitable entity than the NHL — leaving more money floating around to potentially fill in all those gaping holes in the arena construction spreadsheet.

All this is, of course, subject to change. But right now, it looks more like the NHL is using Seattle for leverage with the other expansion candidates, while holding out hope that somehow an arena deal will emerge overnight once Hansen, Burgess, and the rest catch hockey fever. Shoalts can talk all he wants about how adding two West Coast teams would make conference scheduling easier, but when it comes down to it, this decision is going to be made based on what plan makes Gary Bettman’s owner friends the most money.

Seattle arena still missing traffic data, on hold until summer

For eons now, the final hurdle for Chris Hansen’s proposed Seattle arena project has been the completion of an environmental impact study. (Well, that and that the arena won’t be built until Seattle gets an NBA team, which isn’t happening anytime soon, or gets an NHL team, which could happen soon but would require completely renegotiating the arena deal.) The EIS was supposed to be done this month, but now that ain’t happening:

“The final EIS likely won’t be available any earlier than the end of summer,” says Bryan Stevens, of DPD.  “We’ve asked for some updates on the traffic analysis, location of parking during event days, and examples for how impacts could be mitigated along South Holgate Street.”…

Sources close to the Hansen group have also suggested, in the past few weeks, that they can easily provide the answers and speed up the timeline.  Hansen has been unavailable for comment.

Okay, then! Either a Seattle arena and NHL expansion franchise is imminent, or there are so many unanswered questions that they may never happen. Somewhere in between those two.