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January 03, 2007
Lemieux to Pittsburgh: I'd love to stay, I must be going
Last week, PIttsburgh Penguins owners Mario Lemieux and Ronald Burkle (combined lifetime goals: 690) sent a letter to Pennsylvania Gov. Ed Rendell, saying they wanted a new arena settled well before the governor's March 31 target date, as "time is of the essence" and they were "in the process of exploring all of our options." In case Rendell didn't get the message, today Lemieux and Burkle agreed to meet with Kansas City officials to discuss moving to that city's new Sprint Center.
Whether they're serious is anybody's guess - the Pens remain popular in Pittsburgh, and hockey in K.C. didn't work out that well the first time - but it's certainly a good example of Jerry Reinsdorf's dictum about leverage. With Kansas City having built the Sprint Center on spec, and now having to scramble to find a tenant, you have to expect that most every NBA and NHL owner will be paying a visit, much as Tampa Bay became a requisite stop for baseball owners seeking new stadiums in the late '80s and early '90s.
What seems more likely is that Rendell and Pittsburgh officials will sweeten the pot on their "Plan B" financing plan, which would already have the Penguins owners kicking in less than a third of the arena costs. In their letter to the governor, Lemieux and Burkle said they looked forward to "seeing what has been described as a plan that is significantly better than the original 'Plan B.'" So would members of the Allegheny County council, who say the county's chief executive won't return their phone calls asking about the details of the latest proposal. Maybe they didn't say the magic word.
Well free rent for 40 year old franchise. I quess sometimes your parents will offer you their
basement for free while you work out your divorce with your old wife who you havent seen eye to eye for the last 7 years. Those type or arrangements
are always with conditions and only for a short time.
Ironic that the Kansas City Scouts last active NHL player Wilf Paiement ended his career with the Pittsburgh Pengiuns on the team that had a young Mario Lemieux. Wilf Paiement is famous for two things scorer of the 100,000 th goal in regular season play for the NHL and the last man to wear number 99 before wayne gretzky entered the league.
As a journeyman right winger Paiement should have warned Lemieux of three things. Dont take any ownership deals for pay, moving a franchise does not always work (Paiement moved with the Scouts to
Denver to become the Rockies and they moved to new jersey to become the devils in 1982, Wilfs experience with teams he played small markets didnt stop there. Wilf played to the Quebec Nordique) and finally Kansas City is a Basketball Town.
2000 season tickets sold the last year the Kansas City Scouts played does not look like a promising market even if the market was 31 years ago. All the free rent in the world will not pay the payroll if the building is empty and you have two young stars in the persons of Sidney Crosby and Evgeni Malkin. Memo to Mario
have a pre-sale ticket survey done first before you decide to leap off the cliff. Kansas City Chiefs, Scouts didnt characters with those titles
used to drive buffalo off cliffs to their deaths ??? Sometimes Dorothy there is no place like home and home may not be kansas LOL.
paul
Posted by paul on January 5, 2007 09:35 AM
Um, Kansas City (including the Sprint Center) is mostly in MISSOURI.
Most of the money, however, comes from Johnson County, which is on the Kansas side.
Posted by KingmanIII on January 5, 2007 02:51 PM
Anyone that dredges up the Scouts as an argument or point of discussion really hurts their own credibility when discussing hockey and Kansas City. The NHL of 1975 bears little resemblance to the NHL of 2007 - just as professional sports and sports leagues themselves has changed. In 74 the NHL was fighting off the challenge of the WHA and allowed an underfinanced group to start an expansion team in Kansas City. The Scouts were basically doomed to failure from the start.
The NHL might fail in Kansas City a second time, but it's failure would almost certainly have nothing to do with the failure that was the Kansas City Scouts. There are plenty of valid reasons to consider a Penguins to KC move to be bad without bringing up ones that really have no current relevance.
Posted by Andy Mead on January 5, 2007 08:20 PM
Kansas City does not exactly have a long and glorious history as a hockey hotbed, is my point. It's certainly possible that Lemieux might end up considering a move to K.C. - among other things, I imagine they'd offer him a pretty sweet lease. But abandoning a proven hockey town for a smallish city south of the snow line would be a risky move, which is why I believe he's talking with them more for leverage than anything.
Posted by Neil on January 5, 2007 08:53 PM
I question whether Pittsburgh is a proven hockey town. The team has been in bankruptcy twice, averaged in the past 5 seasons 15,649, 14,749, 11,877, 15,804 and 15,888, and they have not been able to get a deal done with the city and/or state for an arena.
I lived out in Pittsburgh for a couple of years. The fans are loyal, but quite fair-weather as well. A couple of seasons ago, when the Steelers had a bad season I was able to get 40 yard tickets, lower bowl for $30 each. The season in which the Pens had 12,000 a game I never paid for tickets, I could get them for free quite easily. They are loyal, but then the teams plays poorly the fans stay at home.
Posted by Mike on January 6, 2007 12:50 AM
While KC isn't a huge city like NY or LA, the metro area is still over two million, and it's at least as large as Pittsburgh. Frankly, I doubt the "success" of any NHL team in either Pittsburgh or Kansas City would come down to attendance. The chief revenue sources would be sponsorship, local broadcast rights, and ancillary venue revenues.
One reason why the Hurricanes are far more "successful" to Peter Karmanous than the Whalers were is that he isn't fighting against teams in Boston and New York for sponsorship revenues or broadcast space. The Hurricanes, even during the lean years in Greensboro, were still bringing in at least as much sponsorship as the team did in Hartford. And their corporate parent Gale Force Holdings, which overseas the RBC Center, is making money hand over fist.
And Kansas City, which definitely isn't "below the snow line" would sink or swim in the NHL based on the local business community's willingness and ability to fork over sponsorship dollars. At this point the Chiefs and Royals are a huge corporate presence in town. College sports, which draw decent TV ratings, are almost exclusively a television phenomena in town with the closest regular action being down K-10 in Lawrence. An NBA or NHL team at the Sprint Center would have a gap in the Royals and Chiefs coverage to exploit with the local businesses for sponsorship revenues, and between KC Metrosports and the Royals network, there's plenty of air time on local cable available to show games.
I don't know the Pittsburgh market that well at all. I'm guessing the population is roughly the same, and like KC, it's not really hemmed in by other cities. They should have a broadcast market that extends from Columbus/Cincy/Cleveland to Philly. And the business community has the same coverage gap in the winter between the Steelers and Pirates coverage.
I doubt game attendance, as long as it's in the 2/3rds range, really won't be the decider - financially - in either market. It will all come down to the public subsidies, ability to make money on the facility (like Gale Force Holdings in Raleigh), lack of competition for broadcast dollars, etc...
I think we can all agree that team's shaking down cities for handouts and control is a bad thing. Whether it's in KC or Pittsburgh. DC or Seattle, etc... But the "new math" of sports ownership means that what is a success or failure of a franchise has far less to do with butts in seats than ever before. A team, like Pittsburgh, that is basically selling out every game these days is a "failure" while other teams that discount large groups of seats and still rarely - if ever - sell out are considered "successes". Success and failure, these days, are pretty much determined before the first ticket is put on sale.
Posted by Andy Mead on January 6, 2007 10:04 AM
well Andy you certainly make a good point in regards to sponsorship and bums in seats. With four fortune 500 companies headquartered I believe in the Kansas City Area it is certainly no devoid of money.
How do the St. Louis Blues do in the same state ?
Do people from Kansas go to St louis to see the blues?? I really cant recall that the WHA in the 1970's had a franchise near Kansas City or in the region. Yes times have changed and putting Sidney Crosby on the sprint centre ice would fill the place no doubt but the question is always for how long. Personally I can see houston being involved in this as well as they have a very new arena for the houston rockets and the AHL houston Aeros.
Anyway you look at it someone is probably going to be giving mario an arena rent free with the offer on the table from kansas city and the anschultz group.
paul
paul
well Andy you certainly make a good point in regards to sponsorship and bums in seats. With four fortune 500 companies headquartered I believe in the Kansas City Area it is certainly no devoid of money.
How do the St. Louis Blues do in the same state ?
Do people from Kansas go to St louis to see the blues?? I really cant recall that the WHA in the 1970's had a franchise near Kansas City or in the region. Yes times have changed and putting Sidney Crosby on the sprint centre ice would fill the place no doubt but the question is always for how long. Personally I can see houston being involved in this as well as they have a very new arena for the houston rockets and the AHL houston Aeros.
Anyway you look at it someone is probably going to be giving mario an arena rent free with the offer on the table from kansas city and the anschultz group.
paul
paul
I dunno - depending on the numbers, it might be more lucrative to pay a small rent but get 100% of the arena revenues.
Posted by Neil on January 8, 2007 02:50 PM
well neil if an arena has control of concessions, parking during the games and all other non sports events in a building without a cut going to the primary tennant it would certainly be in the favour of the Anschultz group. Being the second largest music event promoter in america Anschultz would maximize profits by control of the venue in a key geographical region of america.
MSG I remember at one time took 55 percent of gross for merchantdize for concert tours playing there. I am sure that is the biggest reason for Anschultz to build this arena on spec. You have a promoter owning the arena in the middle of america with no possible arena being put up to compete with you .You are also potientially denying other promoters the kansas city market place for shows up to 20,000 if the kemper arena comes down.
In the interum you can have the AHL team play the sprint arena thus closing the doors on a kemper arena most likely. Anschultz goes into a market with a old arena and two major league tennants not needing an arena but having demands met for stadium renovation. Kansas City is not on an agressive path to getting the sprint occupied they leave that to anschultz. With the mayor of las vegas you have a different case but you also have a great deal of capital available to the city for entertainment venues. In Las vegas who know who would step to the plate, Steve Wynn? Plenty of billionares around that might convince the NBA to allow sacrameto to relocate to sin city. The NBA having their all-star game there in febuary might be the start of a franchise relocationing to LV.
Anschultz knows the odds are in their favour and who knows what type of push they can get from kansas city hall to shift everything from kemper to sprint. The better deal may be in Pittsburgh for the Pens
as you dont have an NBA tennant in Pittsburgh and probably will not or a while. Kansas City however I could see having a NBA tennant and a NHL team.
The Anschultz group are going to try to fill the arena with everything they can of course. Beer, concert tickets , merchantdize and parking can add up to a great deal of money fast. They have the naming rights already and venue advertizement I am sure is not far off.
The NHL team would lose in battle with the NBA in KC.
With the portland trail blazers paul allen making noises about the rose garden who knows what part the sprint arena could play. Many possible suitors. Sometimes a deal for free rent can have down sides. It can cut off the revenues that made Harold Ballard and his son fortunes in Toronto with Maple Leaf Gardens. His son became wealthy on his own with concert productions international developing a concert venue stream in his fathers building and then taking it coast to coast in canada renting arenas. Without CPI no one played canada because the Ballards would refuse them maple leaf gardens if they went with another promoter.The ballards being the only game in hogtown for decades built their fortunes way beyond mere hockey. The dynamics business wise can go beyond a sport franchise in a venue.
You usually have a few rackets going on to spread
your business beyond a sport franchise and venue
paul