Glendale picks arena manager, still doesn’t know cost, because some things man was not meant to know

The city of Glendale finally announced its decision in the bidding to run the Gila River Arena now that the Arizona Coyotes management is out, and the winner is … AEG! Let’s have a big hand for the largest arena management behemoth in the nation!

And the question that everyone wants to know the answer to: How much will the city have to pay AEG to keep the lights on at the arena?

Glendale did not release AEG’s proposal, nor the proposals of the other bidders: Spectra by Comcast Spectacor, which formerly was known as Global Spectrum and is based in Philadelphia; and SMG, which is based in West Conshohocken, Pa., in suburban Philadelphia…

[Glendale City Manager Kevin Phelps] expects the city will have to subsidize the arena in the short term, but anticipates the amount will be less than the $6.5 million the city is paying to keep the venue operational.

So, wait, AEG didn’t actually include a price tag in its proposal? Or it’s some kind of floating number dependent on revenues or something? What the hell, Kevin Phelps, we’ve been following this fershlugginer lease battle for years now, we want some answers!

The city and AEG are expected to have something to submit to the city council within 60 days, so at least we should know a bit more by … eesh, April, seriously? The two parties would then need to hash out a lease deal with the Coyotes, at least for the short term, since any new arena the team has planned wouldn’t be ready for a while. (Yes, they could move back in with the Phoenix Suns, but that didn’t work so well the first time.) At this rate, Arizona really could become unlivable due to the heat before the Coyotes situation gets worked out.

Coyotes plan to announce something about arena plans someday

Here’s Arizona Coyotes owner Anthony LeBlanc talking about his plans for a new arena in Phoenix or Tempe or someplace that’s not Glendale, because screw those guys for not wanting to pay him to play there:

“I’m very positive that we will have something out in the community if not in the next month or two but certainly by the end of the regular season,” LeBlanc said. “We need to partner with a community or institution that wants to be a partner and that’s the first and foremost thing. The good news is that all of the discussions we have had have been pretty open as have other organizations — be it the city of Phoenix or Tempe or Arizona State. Everybody has been pretty open that we have had discussions with and they have all been positive.”

So the owner of the Coyotes is hopeful that by April he’ll have “something out in the community” about partnering with somebody on building something somewhere, and everyone he’s talked to is “positive.” Got it. My only concern is that the English language may need a new verb tense for this — may I suggest the hyper-subjunctive?

 

Developer offers to sell imaginary arena to Senators for imaginary price

The private developer competing with Ottawa Senators owner Eugene Melnyk to build an arena (among other things) on the LeBreton Flats site now says it would consider allowing Melnyk to own the rink if that would make things easier:

“Our attitude is, if we win the bid – and we firmly believe that the Senators should be downtown – we’re there and we’re willing and able to have a variety of discussions,” said Daniel Peritz, Canderel senior vice-president and spokesman for the Devcore Canderel and DLS Group, in an interview.

When asked specifically if that included the Senators owning the arena, Peritz answered: “Under the right conditions, everything is on the table.”

Presumably Devcore wouldn’t build an arena and then just give it to Melnyk for free, so how much would he have to pay for it? And how much would he be willing to pay for it? There’s a hint of a hint elsewhere in the Ottawa Sun report:

Earlier in the day, Melnyk told Postmedia’s Bruce Garrioch that playing in a new downtown arena could mean as much as $10 million more for the Sens’ payroll, so the team “can spend more.”

Does that mean $10 million more after paying for arena construction? Because if not, a new arena sounds like a pretty crappy investment, since it would cost around $500 million to build and only produce $10 million a year in new revenue. And even if that’s net gain, it’s a pretty marginal return on that kind of investment — Melnyk would be better off just putting his money in a mutual fund. (Okay, not the past few months, but in the long term.)

The takeaway here, as always, is follow the money. Once somebody has any idea how to pay for all this, it’s worth taking seriously. Until then, it’s not even pretty pictures.

With Rams gone, Blues owner wants St. Louis to throw money at him instead

Okay, who didn’t see this coming?

The St. Louis Blues want local governments to renovate their city-owned downtown arena as part of a project that will also upgrade the city’s convention center and former home of its recently departed NFL team.

The Blues ownership’s renovation request is expected to cost more than $100 million (the entire franchise sold for just $120 million in 2012), while adding upgrades to the convention center and the Edward Jones Dome — which won’t be home of the Rams anymore, but is still used by conventions every once in a while — could run into the “hundreds of millions,” says the St. Louis Post Dispatch. Blues owner Tom Stillman first asked for arena upgrades last October; convention center president Kitty Ratcliffe says “it would not have been the right time” to ask for this money before, what with Missouri being in the middle of debating shoveling money at the Rams and all, but now it’s a different story.

And why exactly would St. Louis want to spend hundreds of millions of dollars to upgrade its convention center and its NHL team’s arena, entirely at public expense?

“We’re looking at this as a boost for the region’s tourism industry,” said Mary Ellen Ponder, St. Louis Mayor Francis Slay’s chief of staff. “But right now it’s basically us listening to their needs.”

Translation: The Blues owners said they need it, so we’re going to try to give it to them. Excuse me now while I go write a letter to Mayor Slay explaining why I need a pony.

Calgary mayor on Bettman’s attempted Flames arena shakedown: “That’s not how we operate here”

Monday’s attempt by NHL commissioner Gary Bettman to shake down Calgary for more Flames arena money on the grounds that “the cost is never going to be lower than it is today” didn’t go over too well with subsidy-skeptic Calgary Mayor Naheed Nenshi, leading to one of the better media skirmishes in recent days. First, Nenshi went before reporters and, in essence, said not to listen to anything that NHL guy says:

“I don’t know why anyone would think this is surprising or news, this is the man’s job, this is what he does,” said Nenshi.

“Perhaps in other cities that he has come to, the city councils have just written cheques based on back-of-the-napkin proposals without any consultation to the public or without any analysis, that’s not how we operate here.”…

“I know that Calgarians require very wealthy people from New York to come and tell us what we need to do in our community because they understand vibrancy better than we do,” he said.

Then Nenshi doubled down the next day:

(High point: “I never thought I would have a column in the Hockey News praising the fact that I am willing to ask questions of the NHL commissioner.”)

At which point Bettman went on Calgary radio and got into a fight with his interviewer:

(High point: “It would really be easier for me to explain it if you were not interrupting me,” right after he tried to answer a question about arena subsidies by talking about the owner’s charitable contributions. Second high point: “I don’t comment on clubs’ economics” right after being asked if the Flames turn a profit, immediately followed by saying “their long-term stability will be threatened” if they don’t get a new arena.)

This is shaping up to be a battle for the record books, especially with Nenshi enjoying strong public support for his “prove to me what’s in it for taxpayers” stand on the Flames’ arena plans.

Bettman to Calgary: Get new Flames arena for only $490m, act now, supplies limited!

Your request for at least $490 million in public money for a combined hockey arena/football stadium Frankenstein monster is going nowhere with the skeptical mayor. So who you gonna call? You got that right:

[NHL commissioner Gary] Bettman told [Calgary]’s business community at a chamber of commerce event Monday there should be more urgency to get the project underway, particularly from city council.

“I’m having trouble understanding why there hasn’t been further progress on CalgaryNEXT,” Bettman said. “No matter what anyone thinks of the proposed CalgaryNEXT project or the cost of the project, the cost is never going to be lower than it is today…”

The Scotiabank Saddledome, built in 1983, will be the oldest NHL arena when Canada celebrates its 150th birthday in 2017, he said.

Wow, is that really possible, that no other NHL stadium is more than 32 years old? Why, no, it’s not: Even once the new Edmonton Oilers and Detroit Red Wings arenas open this year and next respectively, there’ll still be the New York Rangers in Madison Square Garden, born 1968. (And renovated a couple of times since then, but Bettman didn’t say “oldest unrenovated arena.”)

Anyway, this appears to be a somewhat new twist on the old stadium playbook, with Bettman arguing that Calgary residents shouldn’t look at the sticker price, but rather act now because this sale won’t last forever! Which isn’t a new twist in the marketing world, but hey, half of Bettman’s job consists of declaring these kinds of ultimatums, so give him credit for at least coming up with a new way to phrase it.

Calgary news anchor asks readers to vote on whether to vote on new Flames arena

When writing about public votes on stadium or arena plans, I’ve occasionally gotten in trouble from readers for mixing up “referendums” with “initiatives,” which are apparently very different things, at least in some places like California where people actually get to vote on things directly on a regular basis.

Which is why I’m really glad to see that in Canada, they just avoid the whole nonsense by holding “plebiscites,” which is what CBC Calgary anchor Rob Brown is proposing for the Flames-arena-plus-Stampeders-stadium proposal:

The mayor isn’t in favour of that idea, saying in his interview that he’d like to see council make the decision. He points to the complexity of the proposal, and how difficult it would be to arrive at a simple yes or no question.

It’s a fair point.

This idea represents a massive change to our city, with a lot of moving parts. Council is supposed to have the expertise to scrutinize this stuff and arrive at conclusions. That’s why we elect these folks.

But city hall could also decide to use that expertise to negotiate a much better deal with CSE, and then bring it to a thumbs-up/thumbs-down public vote.

It’s a fine enough idea in the abstract, and one that CBC readers seem to mostly agree with in the site’s own web, er, plebiscite. (Really, it’s amazing that even 29% of respondents would say “No, I don’t want to have a vote on this” for anything, but maybe Canadians are just polite that way.) But there are some problems with “Let the people decide!” as a complete solution to the question of sports subsidies.

First off, holding a public vote isn’t always a guarantee of the public getting what it wants, for the simple reason that money can often play a bigger role in referenda/initiatives/plebescites than in the usual political process. Back when Joanna Cagan and I were researching the first edition of Field of Schemes, we got to hear Jay Cross, then an executive with the Miami Heat, talk on a panel about public votes where another panelist had said it was too risky to put your entire project in the hands of voters. Nonsense, countered Cross: He’d rather put things to a vote every time, because he knew that by spending enough money on a campaign, he could all but guarantee a win — at which point he showed video clips of the multimillion-dollar ad campaign that eventually won the Miami Heat more than a hundred million dollars in arena subsidies.

In Calgary’s case, Mayor Naheed Nenshi has been a staunch skeptic of the Flames/Stampeders plan, such that the teams’ owners might see making their case directly to the people as a better option, especially given that this is one of those everything-including-the-kitchen-sink development plans that makes the financing (and benefits) as confusing as possible. Nenshi, interestingly, would rather have the city council decide than go to a public vote, which could just be local elected officials defending their turf, or could be a tactical move of his own.

Anyway, all this is to say that direct democracy, while a fine goal, isn’t any less susceptible to the corrupting influence of money than anything else in this universe. (Or even the alternate universe that is Canada.) The best solution, as always, is transparency and education about the real economics of sports subsidy plans — hopefully CBC Calgary can tackle that next.

Three biggest arena management firms in nation bid for Glendale contract

We now have the names of the arena management companies bidding to run Glendale’s arena in place of the Arizona Coyotes, and man, are they names: AEG, SMG, and Spectra by Comcast Spectacor (formerly Global Spectrum), which only happen to be the three biggest arena managers in the country. As an added twist, Spectra is currently subcontracted to run the Glendale arena by the Coyotes, though here they’d be writing up their own contract.

This blows a hole in theories that nobody would be interested in managing the Gila River Arena because it’s such a money pit, though it doesn’t yet answer the more interesting question: What do each of these companies want in order to run the place? If it’s less than $7 million a year, then Glendale will be saving money by canceling the old Coyotes lease; if not, then not. Stay tuned.

Glendale gets three bids to run arena, no word yet how they compare to Coyotes’ old lease in awfulness

The deadline for applications to run Glendale’s arena was Friday, and lo and behold, the city got three bids! We don’t know who the bidders are yet or what their bids are because city officials aren’t talking — finalists will be announced January 4, with a winner to be selected on February 8.

If you’re coming late to this story and wondering why on earth you should care about Glendale’s arena management contract, this was the huge sticking point in the Arizona Coyotes‘ old now-canceled lease: Coyotes owner Anthony LeBlanc insisted it was perfectly reasonably for Glendale to pay him $7-8 million a year to run the place, while Glendale officials figured they could get a better deal by shopping around. We do know that none of the new bidders are LeBlanc, so if nothing else, we’ll now see what the market rate is for operating a money-losing arena in an outlying suburb.

It’ll also be interesting to see if the new arena management plans include any contingencies for whether or not the Coyotes are there, since LeBlanc has already started exploring every option under the sun to get the hell out of there rather than have to be renters. It’s rare that we see owners’ claims about what’s a reasonable deal put to any kind of a market test — even one with only three bidders — so I can’t be the only one eagerly waiting to see what is revealed on January 4.

Senators owners on competing developer’s arena plan: “Whatsamatter with you?”

Ottawa Senators owner Eugene Melnyk is locked in a battle with a competing developer over the downtown LeBreton Flats site, and on Friday he responded to rumors that the other guys could include an arena for the Sens with some quotes for the ages:

“The long and short of it is, the team is not for sale. Never will be in my lifetime, for sure. Number two: you can’t come into my territory. What’s a matter with you? Like, who is going to play there?”…

“How in God’s name do they want to build an arena? I don’t get it because there’s no NHL team available. This team is mine for life. My daughter has already taken first dibs on it when I go to heaven,” he said.

Melnyk said if he doesn’t get development rights to LeBreton Flats, the Senators will continue to play in their current arena out in the boonies, which, um, isn’t much of a threat given that he’s the one complaining about that arena not being “built to last.” Any threat in a storm, I guess.