Coyotes owner announces planned arena site, won’t tell you where it is

Arizona Coyotes owner Anthony LeBlanc made his long-awaited announcement yesterday about new arena plans, and it’s that: He’s picked a site, but he’s not saying where it is. Seriously:

Coyotes president and CEO Anthony LeBlanc said Thursday afternoon that the team has chosen a site for its new arena and is working through the legal documentation of the real estate agreement.

LeBlanc declined to provide any other details, or name the site.

This is officially the weakest non-announcement ever, especially since there’s no way even to know if he’s telling the truth about having settled on a site. (I suppose the people he’s working out the real estate agreement with know, but if he later switches to another site before revealing what it is, how will anyone on the outside tell?) Technically, it’s an announcement in advance of tonight’s NHL draft, which is what LeBlanc promised, but it’s still not much more than waving a piece of paper in the air and claiming it has specifics on it.

It’s still pretty likely that the report from earlier this week is correct and LeBlanc is aiming for a site in Scottsdale that’s part of the Salt River Pima Indian Reservation, but it’s also possible that he isn’t, or that he is but he’ll change his mind later if a better offer comes along. I’ve been saying for a while that LeBlanc’s best leverage here is to get a bidding war going among various Phoenix-area governments, and it sure looks like he’s trying to drag that war out as long as possible.

Las Vegas gets NHL team, clearly anyone with a $500m check can have one

As expected, the NHL announced yesterday that it will add an expansion franchise in Las Vegas in 2017, leading to celebration in that city and lots of derisive snorts from people who’ve noted that there are at least half a dozen bigger markets without NHL teams, most of which have a stronger history of hockey support than Vegas. (Seriously, Hartford has more TV households than Las Vegas.) What they don’t have, as I discussed last night in an article for Vice Sports, is a bunch of rich guys willing to sign a $500 million expansion fee check (at least not $500 million in U.S. dollars), and since the rich guys in question include one Florida financier and two Maloofs, there’s at least some suspicion that this is more an attempt to get into the NHL club than a long-term commitment to Las Vegas.

As for the arena angle, the new team (possibly to be called the Black Knights after owner Bill Foley’s financial company, but that’s yet to be decided) will play in T-Mobile Arena, which was privately built by MGM and AEG as part of Vegas’s arena land rush, and which is all new and shiny and apparently exciting to NHL bigwigs. What I haven’t been able to find any record of, probably because it’s a transaction between two private parties, is how much Foley and the Maloofs will be paying the arena as part of their lease, or how long the lease is for, all of which will have a huge impact on the team’s profitability, and on whether the Vegas franchise ends up there for the long haul or follows the Atlanta Thrashers into the long NHL history of failed experiments.

As for cities that didn’t get a team this time around, NHL commissioner Gary Bettman left the door wide open for further expansion, particularly citing the strength of the Quebec application, which was unfortunately undermined by the weakness of the Canadian dollar. Given the glut of billionaires compared to the limited number of major pro sports franchises, the NHL is clearly interested in following MLS’s lead and cashing in on expansion fees while the cashing is good — so if you have half a billion dollars burning a hole in your pocket and a desire to watch hockey from the owner’s box, give them a ring.

Coyotes owner may be settling on Scottsdale arena site, who’ll pay for it still TBD

The Arizona Coyotes owners may finally be close to deciding where to try to build a new arena, if not how to pay for it:

The site is on privately-held tribal land at the northeast corner of the Loop 101 and 202, at McKellips and McClintock. It was home to the Scottsdale 6 drive-in for more than 30 years…

An announcement connected to the site could come on Thursday, I’ve been told. The arena would be part of a larger project at the site.

That’s from Brahm Resnik of KPNX, who doesn’t cite his source, though with the NHL draft starting this Friday and Coyotes owner Anthony LeBlanc having said he’ll have an announcement before then, it’s a fair bet he’ll announce something on Thursday, even if it’s only a front-runner in the arena site competition.

The site described is this one, which is actually in Scottsdale, and as you can see from Google Maps is currently a big ol’ pile of nothing. There’s certainly plenty of room for a “larger project” there, but that won’t necessarily help pay the bills for a pricey arena, especially when LeBlanc’s bottom line is he wants to be paid to play anywhere. I’ll be absolutely stunned if there’s no public subsidy demand attached to this, either in cash or tax kickbacks or both, though I won’t be at all surprised if that bit isn’t revealed this week, since “announce where to put it first, explain how to pay for it later” is tried-and-true sports owner strategy.

Quebec arena could cost public $370m after city pays half its operating losses

Quebec City is not getting an NHL expansion team today (Las Vegas is), but it still has the $400 million arena that taxpayers put up around $330 million to build. And quelle surprise, it’s already losing money:

The $400-million arena opened its doors to the public last September and ran an operational deficit of $1.4 million in its first four months.

That’s not good.

The contract states that the city has to pay 50 per cent of the operational deficit incurred by QMI Spectacles, an affiliate of Quebecor, up to the amount of the arena’s rent.

That’s even worse! CBC News says this will cause Quebec to have to pay the arena operators $730,000, but if you project it out over a full year, it’ll be a $2.2 million check, or a rebate of almost the entire $2.5 million annual rent payment from Quebecor. That would bring the total public subsidy for the new arena to around $370 million, which would be a crazy-high amount to get an NHL team (you could buy a slightly used one for less than that price), if they were getting an NHL team for that price.

The lesson here is … well, all the usual lessons about not spending so much public money on a sports venue and hoping you’ll earn it back on new revenues, and not building on spec, and so on. Mostly, though, it’s that when the mayor jokes that his cousin will be the main attraction at your city’s new arena, be afraid, be very afraid.

Columbus arena projects $47,000 profit by ignoring $14m in annual unpaid costs

Writing about stadium and arena economics in a way that’s easily digestible by a general-interest newspaper audience is hard — and doubly hard on newspaper deadlines. I get that. But the result is way too often stories that are only likely to confuse readers, and leave them with a false impression about how sports finance works and what’s important for economic success, and — you know, let me just skip to the Columbus Dispatch story itself:

Nationwide Arena reports small profit

That’s a great headline: Simple, direct, easy to understand. There’s some question about why the Dispatch replaced its more downbeat headline on an earlier version of the story (“Nationwide Arena to end fiscal year barely in black, with tax bill, debt looming”), but it’s two different ways of saying the same thing, really.

Except that neither way of saying it is really accurate, or at least doesn’t paint a full picture of what’s going on with the Columbus Blue Jackets arena following their $60 million(ish) public bailout in 2011. Here’s how the arena “turns a profit”:

  • The city and county send the Franklin County Convention Facilities Authority, which took over the arena in 2011, about $4 million a year in casino taxes.
  • The state provides the arena with a $4 million a year property tax exemption, though that expires this year.
  • The state, which is owed $10 million on an arena loan, and former arena owners Nationwide Realty Investors, who are owed $44 million on their own loan, have never received any payments on these debts, though the casino taxes were supposed to cover loan payments.
  • The county is deferring about $2 million a year in maintenance costs, which will have to be paid somehow eventually, but there’s no money for it now.
  • After receiving all these breaks — figure about $14 million a year total in various tax subsidies and unpaid obligations — the arena is projected to end the year with about a $47,000 surplus in its bank account. Profit!

Much like the Sprint Center in Kansas City, in other words, Nationwide Arena is a financial success on its books, but only because its books are propped up by massive subsidies from other people (mostly taxpayers, but by Nationwide as well via that unpaid loan). So the entire premise of the news story is dumb — whether the arena is “profitable” is entirely about how much cash the state, county, and city has decided to send it this year, not about whether the arena can actually bring in more revenue from operations than it spends on expenses, which is the usual definition of “profit.”

This is especially important because the next battle is likely going to be over that $4 million a year property tax break, which is already being framed as a way to keep the arena from losing money, though really it’s just about who’ll be $4 million a year in the red, the arena or the Columbus school district. Economic literacy in journalism matters, not just for being technically factually accurate, but because big policy decisions end up being based on how the public perceives the issues — and even if it’s too late to undo the costly public bailout of the arena, there are still plenty of future mistakes that can be avoided by actually understanding how money works.

Flames owners on arena Plan B: Reply hazy, ask again later

Ever since the city of Calgary shot down the Flames owners’ plan to build a $1.2 billion combined arena-stadium complex (after discovering it would actually cost $1.8 billion, and the public would be on the hook for the difference), we’ve been waiting for someone to announce next steps. And it sounds like the next step is … to figure out a next step:

In a letter that season ticket holders received Monday, CEO Ken King said the company “accepted an offer from the City to examine a Plan B.”

The less ambitious Plan B would see an arena and event centre located on the Stampede grounds, a separate field house in the northwest, and some renovation to McMahon Stadium.

How much would such a scaled-back (but still sizable) plan cost? Nobody knows, which is what “examine” means. The Flames owners are supposed to provide a response to the city’s report later this month, but even that doesn’t guarantee that an actual plan or price tag will be in place — it’s a fair assumption that we could be here awhile as the details get worked out, which when hundreds of millions of public dollars are at stake isn’t a bad thing at all.

NHL seriously putting expansion team in Vegas, sports world just shakes its head sadly

Las Vegas Black Knights? Las Vegas Black Knights:

A person with direct knowledge of the NHL’s decision says the league has settled on Las Vegas as its choice for expansion, provided organizers can come up with a $500 million US fee.

The person spoke Tuesday on condition of anonymity because details have not been released by the league ahead of its Board of Governors meeting on June 22 in Las Vegas. Quebec City was also considered for expansion.

A second person who had been briefed on the decision said Las Vegas was a “done deal” following the recommendation of the NHL’s executive committee.

This has been in the works for a while now, though no one could actually believe that the NHL would go ahead with adding just a single team (resulting in continued unbalanced divisions), and that it would be in Las Vegas, of all places. I mean, nothing against Las Vegas, but it’s a very small city, and anything but a hockey hotbed, and — you know what, let’s let Nate Silver tell it, as he did in April 2015 and reprinted yesterday at Fivethirtyeight:

The city has had several professional sports franchises (albeit none from the four or five largest North American sports leagues), and it hasn’t supported them very well.

Consider that the city’s Triple-A baseball franchise, the Las Vegas 51s of the Pacific Coast League, had the lowest attendance in the PCL last year.

Or that the city’s professional hockey franchise, the Las Vegas Wranglers of the ECHL, disbanded earlier this year after years of middling attendance and an inability to find a suitable home arena.

The Las Vegas Gladiators of the Arena Football League were relocated to Cleveland in 2007 after five seasons of attendance well below AFL averages. Las Vegas has a new AFL team this season, the Las Vegas Outlaws, but their attendance was poor in their first two games…

If the city has some positives, it also has some negatives, like irregular working hours, middling public transit and abundant competition for the entertainment dollar, which may depress sports attendance.

To their credit, the backers of the Las Vegas NHL franchise, after a monthslong campaign, have gotten commitments from about 11,000 would-be season ticket holders. That sounds impressive until you consider that the Winnipeg Jets sold out their entire allotment of 13,000 season tickets in 17 minutes after the Atlanta Thrashers were relocated there in 2011. Hockey’s a bit more popular on the frozen tundra than in the middle of the desert.

Gary Bettman has spent his entire career as NHL commissioner devoted to the idea that he can increase the value of the league by expanding to areas where people traditionally don’t like hockey, and despite all signs that this was a terrible idea, he’s doubling down on it with this move. At least the other 30 NHL owners will get to pocket half a billion dollars in expansion fees, I guess, but running a league as a Ponzi scheme is … actually, a long NHL tradition, so forget I said anything.

Broward got land rights in exchange for $86m Panthers subsidy, doesn’t know what to do with them

Remember back in December when the Broward County commission gave Florida Panthers owner Vincent Viola $86 million in cash plus a new out clause to escape his arena lease earlier, all on the reasoning that this would prevent the Panthers from leaving town? (It still boggles my mind to type that.) At least Broward got something out of the deal, it turns out: development rights to 140 acres around the arena that Viola transferred back to the county. And what do they plan to do with their new windfall?

Now the county has to figure out what to do with the land, a vast asphalt sea of parking lots.

“A putt-putt course?” county commissioner Beam Furr quipped Sunday, as consultants held their first meeting to sort out options.

I haven’t kept up with the value of swampland in Florida, so it’s entirely possible that the property around the arena will be good for something, hopefully before the entire region is underwater. It would have been nice for Broward officials to figure this out before trading $86 million and a lease out clause for it, but hey, magic beans are better than nothing.

MSG to build concerts-only arena in Vegas, because three arenas with no pro team wasn’t enough

Las Vegas just opened its third arena without a pro sports team to play in any of them, plus it’s considering building a pro football stadium, plus it has yet another arena (with a retractable roof!) that broke ground in 2014 and then has never been heard from again. So you know what that city really needs? Another arena:

[Madison Square Garden] announced Wednesday that it will build a 17,500-seat arena just off the Las Vegas Strip…

The new venue is a partnership among Madison Square Garden Co., Sands Corp., Azoff MSG Entertainment, concert promoter Live Nation and Oak View Group, an entertainment advisory firm.

“This will be a state-of-the-art venue of the future, an entertainment-only venue,” O’Connor told The Times.

On the one hand, this is not entirely crazy, because MSG successfully remodeled the L.A. Forum as a concert-only venue, and certainly they and Live Nation know something about the concert business. (The plan is for this new as-yet-un-price-tagged arena to have all its seats in front of the stage, so really “arena-sized theater” might be a better description.) On the other hand, it is completely crazy, because even if Las Vegas is a huge tourist destination, how many arena concerts can one city reasonably host? Even New York City only has three arenas (four if you count the Nassau Coliseum), and New York has like five times as many people living there as Vegas would have even if you double-booked all its hotel rooms.

This can only end with at least one of the Vegas arenas eventually going out of business. The good news, at least if you believe MSG officials, is that this will involve no public money, so it’s just the sort of crazy land rush that corporations would occasionally engage in even if subsidies didn’t exist. At least in Vegas, because that place apparently makes even corporate bean counters lose their minds.

Coyotes to Glendale: If we can’t run arena, we’ll take our puck and go … somewhere

Arizona Coyotes owner Anthony LeBlanc had already made pretty clear that he doesn’t want to keep the team in its current arena in Glendale without its prior sweetheart management deal, but he hammered in home yesterday by sending an open letter to city manager Kevin Phelps declaring that they’re outtie as soon as they can figure out a place to be outtie to:

Simply put, the Arizona Coyotes have every intention of leaving Glendale as soon as practicable. … By unilaterally breaking a 15-year signed management agreement with the team — a contract the Coyotes would have honored for the length of its term — the Council effectively evicted us from our home. While you claim that the Council has had a change of heart, we have not. As a business responsible for hundreds of employees, and a team, that relies on the support of hundreds of thousands of fans statewide, we simply cannot afford to do business with partners who do not keep their word, or honor their contracts.

Boom! Burn those bridges, Anthony! Except, of course, that the Coyotes don’t actually have another place to go to, so unless they’re going to relocate to the Suns‘ old arena or move in with their friend Oscar, they have to stay in Glendale for the time being, hence that “as soon as practicable” line in LeBlanc’s letter.

Local news coverage had this as LeBlanc declaring that he wouldn’t engage in lease talks with AEG, the arena management giant that recently won the rights to operate the Glendale arena, but realistically he’s going to have to talk to them at some point, since right now the team doesn’t have anywhere to play starting in September 2017, and nobody’s going to build them a new arena by then. LeBlanc keeps saying that he’s going to have an arena announcement real soon now, and maybe that will include a new temporary home, for all we know. If not, he’s painting himself into a potentially ugly corner, but we’ll just have to wait and see.