It’s been a little under two months since Oklahoma City Mayor David Holt said he wanted to build a new arena for the Thunder because their 22-year-old one that was just renovated 12 years ago “will keep getting older.” (And now, it’s older still!) At the time, he said he would fund ¯\_(ツ)_/¯ million dollars in arena construction by extending the 1% sales tax surcharge that built the Thunder’s old arena and which was supposed to expire in 2028, instead keeping it in place until ¯\_(ツ)_/¯. But now, the mayor has more details:
- The arena will cost “a minimum of $900 million.”
- Most of that will be paid out of a temporary 1% sales tax surcharge running from 2028 to 2034.
- Another $70 million will come from leftover money in a city arena fund.
- Thunder owner Clay Bennett will kick in a whole $50 million.
The best part of Holt’s press release, though, is this:
The plan for the new arena and the commitment from the Thunder is conditional on passage by Oklahoma City voters on December 12 of a temporary one-cent sales tax that will not raise taxes. The temporary tax will start after the conclusion of MAPS 4 and will not increase the City’s current sales tax rate.
That’s right, “a temporary one-cent sales tax that will not raise taxes.” Roll that around in your mouth for a while.
On the one hand, it’s easy to see what Holt’s comms department was going for here: Nobody likes to ask people to vote to raise taxes, so saying “No no no, these are the same taxes you’re paying now, it’s just that you weren’t going to keep paying them but now you will” is at least confusing enough to maybe cast some doubt into voters’ minds. But come on: Is there anything more Quimbyesque than arguing that establishing a new tax to give public money to the local billionaire isn’t really raising taxes because it just replaces the old tax that gave public money to the local billionaire?
If the city council approves it on September 26, the sales tax surcharge will go to a special election on December 12, at which point it’ll be up to voters to decide if they buy Holt’s “no new taxes” spin. There was apparently a poll conducted on this back in March, but the only news outlet that covered it was the Oklahoman and that page is officially the most heavily paywalled article I’ve ever seen — if any Oklahoman subscribers can share in the comments what the results said, the world would very much appreciate it.
Unaware of any article that gave the poll results. Note that the poll question “The poll asks residents if they would be supportive of the one-cent sales tax if “The ownership group is donating $75 million toward the arena even though the city will own it.”” has the Thunder contributing $75 million, but now the amount is down to $50 million.
I can’t believe the Thunder will only pay $50 million. Is OKC crazy to let them pay so much.
sigh.
I am a subscriber to the Oklahoman. I have pasted all of the comments from readers below per the request from Field of Schemes. I was unable to find the results of the poll in the article, or via any link in the article. I can also send a copy of the article if requested.
Very much enjoy the commentary from Field of Schemes. If you want anything else from the Oklahoman, I’m happy to try to send it to you.
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Oh, my gosh, I cannot believe some of these thoughts by posters. Simple: if the Thunder leave, it will be a gigantic hole in the downtown area, many businesses who are significantly helped by the attraction of the Thunder will disappear, and all of the financial goodwill the Thunder do year round will evaporate.
The economic consequences of the Thunder accepting another offer from the list of cities who would kill for a REAL sports franchise would doom the downtown from ever replacing the Thunder with another sports team in our lifetimes. Boomtown would change to ghost town, or cow town.
In short, if you think the Thunder need us as much as we need them- you are smoking something bad. The NBA, for many years, has overlooked the arena from being deficient from the NBA’s standards, with the promise that someday, a NEW arena will be built- not a remodel, either.
The Fans excuse: gee whiz, the team TODAY only draws anywhere from 30% to 70% attendance, due to rebuilding. As a tiny market, we were SPOILED over a dozen years with a consistently competitive team. Fans always show up for a winner (note OU football) but may, or should, show up in other times. Pro sports: EVERY franchise, even LA, NY, all of them, big or small, have to rebuild- welcome to NBA parity.
To disappear during rebuild years is not LOYALTY- it is FAIR WEATHER. Next season, we will very competitive again, does that justify, THEN, a new arena? You forget what life was like downtown- before the Thunder.
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You’re right
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If people in OKC do not acknowledge the VALUE of having the Thunder in OKC then they will not support this initiative. This city and State are accustomed to doing things on a limited budget and at a cost representative of the low cost of living here relative to other places. This was one of my greatest concerns apathy if the team doesn’t immediately win an NBA championship and not understanding that with OKC being a VERY SMALL market with no natural draws how a first class arena can elevate the city and state. Oklahoma is simply a state that doesn’t know how to do anything first rate.
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The Paycom Center is more than half empty at every game- even on weekends and for big games. The city and the team are lying about attendance. There is no taxpayer need for a bigger stadium. If the players need something better, they can spend their 75M on shinier locker rooms.
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10% isn’t enough in my opinion, I would hope for at least 25%. But this has nothing to do with the attendance at games, it has to do with the inability to offer the same money making fan amenities that all but maybe two other NBA arenas offer. If the team doesn’t have a facility to compete for additional non-nba revenue (which they are not required to share with other teams) then they will not be financially viable compared to their peers much longer. Our arena, whether used for games, concerts, comedy shows, or anything else is simply not up to par with the other facilities we compete with to attract a lot of those events. Also, if you have paid attention, attendance is much higher than half full since January….especially with weekend games and big name teams. We do have an issue with late arriving fans, and that is one thing that the new arenas attempt to handle by having amenities on site to get the fans on site sooner.
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I love the Thunder and the positive influence they’ve had on OKC. That being said, they are absolutely high if they think paying only 10% of the cost of a new arena is going to fly with the average, fiscally conservative OKC citizen. I *really* hope this is only an opening negotiation bid. Ownership offering only to pay $75 million of a $750 million arena could doom their chances of getting this passed. Something between 30-50% seems reasonable. 10% is a slap in the face.
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Remember how we got the Sonics: Seattle and the State of Washington wouldn’t build a new arena.
I would suggest Mayor Holt and Thunder ownership consider a state-wide tax. True, the team is the “Oklahoma City” Thunder, but there are tens of thousands outside OKC who would want to secure this team.
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I agree with most of your points. I only differ in the amount the owners should contribute. 50% is the minimum they should contribute. The team is worth far more than when they purchased it. Even with current attendance, I believe they are turning a profit.
If they aren’t willing to contribute at least 50% to an arena upgrade, the owners relationship to OKC would be better described as a sponge than a partner, soaking up profits while leaving OKC to fund an arena that will also need to be upgraded in another 20 years.
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MYTH: good attendance is the key for “turning a profit.” FACT: the so-called profits that the Thunder make from ticket sales would MAYBE pay the salary of one star player, and after the next Collective Bargaining Agreement, (CBA) seldom will that happen. Ask yourself: Why?
ANSWER: the CBA centers on the National TV Revenue (including streaming) of several major sports networks and basketball is exploding in America in viewing, hence the great majority of revenues a team has come from the gigantic TV contracts for the League as a whole. I don’t recall the amounts, but it seemed like $2,600,000,000, as in Billions, annually, and it’s going to take a huge leap where you will see individual players making $70-80 million annually.
To think that ticket revenues locally are the guiding revenue of a team? Nope. Ever notice that most of the seats in the lower bowl are full? That is where the ticket money is, not in the loud city, aka 300s, where tickets are almost given away. A MAJOR LOCAL TV market, like LA, can generate $250 million annually to the Lakers, where, the poor folks here get maybe $15 million- compete with that. We couldn’t, without national TV money flowing to us.
In the end, the big stars, which you MUST have, will be paid according to their value, like it or not. Frankly, I’m surprised at this 10% offer: cities are out there who would ask for nothing but a move- it’s a crucial sellling point to attracting businesses to Oklahoma- another FACT.
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Never said good attendance was the key to turning a profit. I said I believe that even with their current lower attendance the Thunder are making a profit. My point was not that good attendance is the key to turning a profit. My point was I believe the team is turning a profit even with mediocre attendance. I agree with your point that shared league revenue, which mostly comes from TV contracts, provides most of the revenue the Thunder generate.
Never said anything about how much the stars are paid or how that should figure into what % of the arena construction cost the owners should pay.
Name 5 businesses that employ more than 100 people who have relocated to OKC since the Thunder arrived in 2008 who state that having the Thunder in OKC was a crucial selling point in their relocation to OKC. It’s a positive, but saying it is crucial may be overstating the importance of a NBA team in the business plans for companies when deciding where to relocate.
You may be over-estimating the number of cities capable of supporting a NBA team who are willing to take on 90% of the cost of constructing a new arena. Can you name one NBA arena constructed or upgraded for $750 million in the last 10 years where the city/state the arena was located paid 90% of the upgrade/construction costs? The days of municipalities and states being willing to fund 90% of such an arena upgrade construction are rapidly coming to an end, if they have not already done so.
I like the one guy who points out the stadium is more than 50% full for weekends and games against good teams. Why should the Thunder have to pay for an arena when they have to play weeknight games against the Hornets and Pistons?
“Why should the Thunder have to pay for an arena when they have to play weeknight games against the Hornets and Pistons?”
I love this logic. unassailable.
It’s a good thing for OKC that there will be a public vote.
I live in Tempe, AZ in which city leadership remarkably enough put a hockey stadium up to the public vote. It solidly failed, boy were they pissed.
I bet they never make that mistake again. Imagine!
The chutzpah of the OKC owners here is rather impressive. Why even bother offering the $50m?
Yeah, that.
Maybe they were worried that if they offered $5m the ownership group would burst out laughing during the negotiation?
I enjoy the folly of a “temporary” tax. Hey look! We have that 1%. You know we could keep collecting that and use it for whatever new project comes along! Or to fill a budget shortfall, or to create a budget surplus for something, etc