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August 04, 2011
Sorry, Islanders: Brooklyn Nets arena still too small for hockey
Now that the New York Islanders aren't getting a new arena in Nassau — not this week, anyway — there's much talk about whether they could instead share digs with the Nets at the new Barclays Center in Brooklyn. Forbes blogger Tom Van Riper calls a Brooklyn move "the most cost efficient way for the franchise to move on," while the Brooklyn Paper, with its characteristic reserve, shouts, "GAME CHANGER! Professional hockey could be coming to Brooklyn."
The only problem, as sharp-eyed FoS readers will remember (or as even dull-eyed Village Voice readers will, since I just wrote about it there on Tuesday): In order to save money, Brooklyn arena builder Bruce Ratner "value engineered" the Barclays Center to have a floor too small for hockey, essentially requiring that thousands of seats be ripped out to make room for a playing surface twice the length of a basketball court.
The Brooklyn Paper's headline was based on the same canned statement by Barclays Center CEO Brett Yormark as I cited in my Voice piece, which went like this in its entirety:
"The Barclays Center will have an ice rink that can support professional hockey. Due to the venue's design, the capacity for hockey would be a few thousand seats less than for basketball. While we hope to explore hockey opportunities in the future, our primary focus at the moment is to build the best sports and entertainment venue in the world."
The Brooklyn Paper pegs the number of seats lost at 3,500 (no source given), which would give the arena the smallest capacity in the NHL. More to the point, as I noted in the Voice (thanks in part to a tip from an FoS reader), squeezing an NHL rink into a structure built for basketball could create some seriously ugly sightlines, as happened when the Phoenix Coyotes tried a similar scheme at America West Arena a bunch of years back.
Add in that the Islanders would be tenants of the Nets at the arena, and would probably be expected to pay rent (they'd be taking up nights that could otherwise be used for Lady Gaga shows and the like, after all), and it starts sounding like a less tempting opportunity. (Though at least the Isles wouldn't have to pay a territorial rights fee to the Rangers — they already covered that back in the 1970s.)
So: Brooklyn Islanders, possible? Yes. Likely? Unless both Charles Wang and the NHL decide that the Brooklyn market is so lucrative that it's worth playing in a substandard arena, don't hold your breath.
That all makes perfect sense, Neil. This is really about the unending campaign to make Atlantic Yards look like it's good for someone besides Bruce Ratner and Mikhail Prokhorov, not about any kind of sports reality.
FWIW the old US Airways configuration saw a 19,000 seat basketball arena reduced to 16,200 for hockey, with only 12,000 of those seats unobstructed (according to a piece re-posted on ballparks.com).
On the surface, it seems a bit odd that Ratner would redo the arena to make it more or less impossible to economically house an NHL tenant.
Was it about construction cost? Seems unlikely, given that the overall building won't be much smaller or cheaper... Or was it about him being of the opinion that he already had enough attractions available to book non NBA nights, and that these might well pay him more than a tenant NHL team would?
We keep hearing about how the key to profitability for sports owners is controlling non-hockey or basketball revenues. Every time I hear that it translates as "we can't make money on the primary tenant, so we use secondaries to subsidize them". Or, at least, that is the public position taken in order to get hefty corporate welfare from dimwitted elected and/or public officials.
They claim it was to save money, yes. Remember, Ratner himself says at one point he didn't know how he'd get the financing for this thing, so they were presumably cutting corners left and right. A smaller seating bowl could actually save a bunch of money.
As for why FCRC is getting up hockey hopes now, I couldn't say, though my guess is that they don't want to drive away any potential customers. If a college hockey conference is looking for a place to play its tournament, say, they don't want Google to come up with a bunch of hits that say "Brooklyn arena too small for hockey" ... oops, sorry, guys, hope I didn't mess that up for you.
Right after I posted the original, I found myself wondering if the real benefit Ratner saw might not be that he could offload any modification/reconstruction costs to the prospective NHL owner, who would presumably have no option as regards other venues...
Funny, every time I hem myself in with a bad business decision, it costs me. When rich guys do it, it makes them money (and maybe still costs 'me'...)
The trend appears to be seperate venues for professional basketball and hockey-see Minneapolis-St. Paul, Miami, the Bay Area, Detroit, etc.
Unless the arena owner owns both teams (or a equitable sharing of revenues is agrred to)it does not make economic sense to share facilities anymore.
Also, FCR saved around $500 million in going from the Geary design to the Ellerbe-Beckett design.
Arenas that have been built which are similiar to the Brooklyn arena (i.e, Indianapolis, San Antonio)use minor league hockey to help fill dates and generate revenue.
The real issue now appears to be C. Wang-is he willing to have private equity (including a significant amount of his) help finance an arena in Nassau County.
I'd disagree that it's a trend to build separate basketball and hockey arenas. All of those cites building separate buildings did so over 10 years ago.
The other thing to consider is that a basketball-specific arena can lead to higher gate revenues because the sight lines are better. It can also help for events like WWE, UFC and boxing because there's less floor space.
I'd say it makes no economic sense to have separate arenas for basketball and hockey. One of the reasons arenas are, relatively speaking, successful is that they can have more than one tenant. But guys like the Timberwolves old owners - Harv and Marv, was it? - are a little too obtuse on this point. They think "Oooh, if we have only an NBA team here we get all the goodies!" not stopping to think that unless they own the NHL tenant outright (a la Madison Square Garden) or have a reasonably equitable deal (like Chicago's United Center) then no NHL owner with a brain is going to go into an agreement with an NBA owner who's going to take the lion's share of all revenues. (Yes, I know, tough to find an NHL owner with a brain. But I digress...)
Of course Harv and Marv found out the hard way that the danger of separate arenas is that you divide the market for events and so no one gets a profit, since no one is getting enough revenue on the non-tenant events to pay all that long term debt. This of course is when you palm off the building on the city, county, whoever....
Neil, what's your take on Van Riper's argument that the cable revenues alone are enough to tilt the results to Brooklyn?
The cable money helps, no doubt. But it still means moving from one suboptimal arena in Nassau (old, low revenue streams) to another suboptimal one in Brooklyn (bad hockey sightlines, subtenant). It'd probably be better than moving to Kansas City, but that's not saying much.
I'll be surprised if Wang, his earlier threats notwithstanding, doesn't give it one more try to get something done with Long Island, especially seeing as he's stuck there for four more years anyway. At that point he can always sell out to a new owner who can move them if he wants (though he's unlikely to get top dollar then).
Ben, what multisport arenas have been built lately? Orlando, Houston, Memphis, and Brooklyn are all basketball-only, and Newark and Pittsburgh are hockey-only.
I think Marty is absolutely correct: We're not getting shared arenas because nobody wants to be the subtenant. From an economic perspective it's nuts to have two arenas competing for booking shows (unless it's a market like New York or L.A. where there are plenty of shows to go around, but then you probably have multiple teams in each sports league anyway), but with no owner wanting to be bottom dog, that's the way it usually works out.
Or to put it another way: If you think you can get somebody to build you your own arena, you'd be crazy to rent somebody else's.
Re: the cable revenues....
Do you think they might be impressive enough to make the "12k" clear view seating capacity at Atlantic yards immaterial? We've discussed in the past the possibility that the next round of NFL stadia might do away with the 30-40 thousand seats for, you know, actual working stiffs, and focus on TV revenue and high end corporate seats/suites (which isn't to say that they don't focus on that now, just that in the example cited they would actually not even bother building the seats for schmucks like, well, us - or me at least)?
I admit the NHL has never really lead in any facet of the sports business, but with a small (14k) arena in Wpg coming in next year, how could Bettman reasonably tell Wang that he can't move to an arena in Brooklyn that has about the same number of seats???
And furthermore, if (I think it's unlikely, but...) Wang wanted to move there, I can't see Bettman throwing himself on the pyre to save Hempstead as an NHL host city/town when Brooklyn would be the alternative, can you?
I don't think Bettman's going to stop Wang. I think Wang's going to stop Wang, because an arena where 1/3 of the seats are no good for hockey and he'd be a subtenant isn't very enticing.
As for making it up on cable revenue, something I haven't heard mentioned: Most of Brooklyn is Cablevision territory. The same Cablevision that current pays the Islanders big money in Nassau. And also the same Cablevision that owns the Rangers and MSG, and would probably be none too happy to have the Islanders in the five boroughs, even if they couldn't stop them. The image of them offering a lucrative cable deal just so the Islanders could move into a rival arena ... I guess it's possible, but it sure seems unlikely to me.
I didn't realize they were on the same network... well, that about finishes that thought...
Sorry for being six months late in posting this but as for the Rangers being upset if the Islanders are in the five boroughs. Wouldn't they be happier to have them there instead of someplace like Quebec or Kansas City. They save on travel expenses and also have a substantial number of their fans in the building for a road game that is only a few miles away from their home. Optimally the Dolans would probably prefer the Islanders being in Nassau County but previous ownership forty years ago helped Nassau County get an NHL franchise when they were initially thinking minor league like the Long Island Ducks. A hefty territorial rights fee didn't hurt either.
My understanding is the cablevision contract with the Islanders runs until 2030
"Ben, what multisport arenas have been built lately? Orlando, Houston, Memphis, and Brooklyn are all basketball-only, and Newark and Pittsburgh are hockey-only."
Dallas, KC, Toronto, L.A., Philly, D.C., Denver...
An arena built for a hockey tenant is more than serviceable for basketball, if not entirely optimal. The opposite, obviously, is not true.