Los Angeles Kings – Field of Schemes

The Staples Center has a new name that’s even dumber than “Staples Center”

November 18, 2021November 18, 2021 Neil deMause

I generally try to avoid reporting on which corporate monikers are being slathered on the side of sports venues, because nobody is paying me to drop their names into my posts. (If anyone is interested in paying to place ads in Field of Schemes posts: We don’t allow that kind of shenanigans, please stop emailing me, already!) But the sale of the name of the Los Angeles arena that has been known for 22 years as the Staples Center to a cryptocurrency company whose name rhymes with, um, schmypto-schmot-schmom, is notable for a few reasons:

The company, which makes a cryptocurrency buying and selling app and is incorporated in Malta and headquartered in Singapore, is paying $700 million over 20 years for the naming rights to the Lakers and Kings arena, which is a hell of a lot of money for a used arena name. (Do you really think anyone in L.A. is going to call it anything other than the Staples Center?) This is apparently a record price, beating out the $800 million Canadian (about $650 million U.S.) that a big bank paid to rename the Toronto Maple Leafs arena in 2017.
History shows that the success of naming-rights deals for the buying companies’ fortunes are, uh, not so good. Talk of a “naming rights curse” goes back nearly two decades, to when naming-rights sponsors Enron, PSINet, Trans World Airlines, and National Car Rental all went bankrupt in quick succession. While I am no expert in cryptocurrency beyond having read the greatest article in the history of articles, it’s worth noting that even one crypto publication called the L.A. naming rights deal “the corporate equivalent of buying a Lamborghini: functionally almost useless, but a huge signal to the world that you’re winning, exactly because you’ve got so much money to set on fire.” The buyer in this case, it noted, is only the fourth-largest crypto exchange out there and has “relatively thin brand recognition,” but that’s certainly something that lighting money on fire should remedy, at least so long as the company can remain in business while shelling out $35 million a year on a big-ass arena ad.

So aside from this maybe being a sign that maybe you shouldn’t buy stock in this one crypto company, does the naming-rights deal have much significance for the future, or present, of sports venue financing? If nothing else, it’s an indication that there are still people out there with too much money and the notion that using it to slap their name on a big building that shows up on TV a lot is the best use of marketing dollars, the history of Enron and its ilk be damned. So maybe you’ll see a few more deals where team owners use naming-rights money to fund buildings without needing to tap the public purse — the L.A. arena, don’t forget, was mostly financed privately, notwithstanding a $70 million loan from the city of L.A. — though in most cases they’ll no doubt still want the public cash so they can pocket as much naming-rights money as possible for themselves. It’s certainly a good argument for pushing back against stadium funding demands, though: Hey, why doncha ask some crypto bros for a few hundred million before you come hitting up taxpayers? is an excellent thing to practice shouting at your next city council hearing.

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Friday roundup: More Jaguars move threats, more bad convention center spending, time is an endless loop of human folly

December 4, 2020 Neil deMause

It’s Friday again! And December, how did that happen? “Passage of time,” what manner of witchcraft are you speaking of? Time is an eternal, unchanging present of toil and suffering under the grip of unending plagues! Thus has it ever been!

This notwithstanding, there was some news this week, though in keeping with the theme, it looks an awful lot like the news every week:

The Jacksonville city council ignored Mayor Lenny Curry’s pleas to stop thinking about Jacksonville Jaguars owner Shad Khan’s multi-hundred-million-dollar subsidy demand and just vote on it, and instead held another hearing last night on the team’s request for $200 million in public cash toward building a development in one of the stadium parking lots. Jaguars president Mark Lamping picked up the baton, though, and issued an impressive string of non-threat threats that the team would leave town without approval of the subsidy, saying, “We’re doing what we believe is necessary to ensure NFL football is here in Northeast Florida for decades to come,” that the Lot J development and renovations to the team’s stadium are needed to “ensure we stay in Jacksonville,” and “We are doing everything to stay here.” Council president Tommy Hazouri would like to wait to vote on the Lot J subsidy until January, but Jaguars lobbyist Paul Harden warned of “deal fatigue” and called for a vote on Tuesday, and apparently Florida law gives lobbyists equal power to council presidents — who knew? — so that might actually happen. At which point Khan can come back in a couple more years to demand additional stadium renovation money in exchange for a lease extension. It’s good to be king.
Good article in the New York Times this week about how multiple cities (Indianapolis, Savannah, Cleveland, Terre Haute) are pouring money into convention center expansions even as convention centers remain closed and in any case have been facing years of declining attendance nationwide. In fact, convention center operators say this is even more of a reason to throw good money after bad, because with fewer conventions, they have no choice but to spend more to compete for the few that are available, right? “This is a perverse world, where market realities do not affect city decision-making,” University of Texas at San Antonio economist and FoS convention center correspondent Heywood Sanders tells the Times.
When Hamilton County, Ohio passed a 0.5% sales tax hike in 1996 to fund new stadiums for the Cincinnati Bengals and Reds, lawmakers promised county residents that if there was any money left over after paying off the stadiums, it would go to lower their property taxes. That’s only happened in the amount promised back then twice in the last decade, and it’s not going to happen this year either, with the pandemic taking a bite out of sales tax revenues that will leave only enough surplus for 21% of what homeowners were expecting. This has squat-all to do with the stadium deal — it’s more about the county overpromising by making rose-colored projections of how much money the tax hike would bring in — but as I noted when this same thing happened two years ago, at least this time the county didn’t have to sell any hospitals.
The Anaheim Ducks, Boston Bruins, Los Angeles Kings, and Pittsburgh Penguins are all reportedly considering playing their NHL seasons outdoors in order to be allowed to sell tickets, which is a great plan except that California is about to be under new stay-at-home restrictions that almost certainly won’t allow outdoor sports attendance either, and in Boston and Pittsburgh it snows a lot in the winter. Add in the costs of building and operating a temporary hockey rink at, say, Fenway Park, and this doesn’t seem all that likely to happen, but it’s certainly a better idea than hoping to allow attendance at indoor arenas before enough people are vaccinated, which isn’t likely to happen until the 2021-22 season.
Santa Clara’s stadium authority met this week to discuss an audit report of the San Francisco 49ers‘ stadium, and the 49ers responded by telling Santa Clara to fire its auditor. Then the audit showed a couple of million dollars of “discrepancies” in the 49ers’ books, at which point 49ers officials said they wouldn’t cooperate with audits anymore. Is this how rich people behave with the IRS, too? Yeah, pretty much.
I went on Orlando’s Beat of Sports radio show this week to discuss MLB’s self-declared mission to reorganize much of the minors into intern leagues so it can stop paying players while also leveraging cities for more stadium money, and you can listen to it here.
There are new renderings of the under-construction St. Louis S.C. stadium, and frankly they’re kind of boring, though they do have a Ferris wheel in them. They also supposedly show how fans will have a “perfect view” of the Gateway Arch, which I can’t actually spot in any of the images, but then I’m not sure why anyone would buy tickets to a soccer match to see a structure that they can see every day for free.
The Pawtucket Red Sox are no more, and if you want to remember the team’s history by buying some Keith Foulke bobbleheads, knock yourself out.

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Anschutz puts AEG up for sale, throwing L.A. stadium plans into even more uncertainty

September 19, 2012September 19, 2012 Neil deMause

Reuters dropped a fairly major bombshell last night, reporting that Philip Anschutz is considering selling his Anschutz Entertainment Group for a price of “several billion dollars,” a report later confirmed by Anschutz’s own execs. That’s the AEG that owns the Los Angeles Kings, Los Angeles Galaxy, the Houston Dynamo, a chunk of the Los Angeles Lakers, the Staples Center, and the nation’s second-largest concert promoter — and which, not incidentally, is currently trying to build a football stadium in downtown L.A. So, a slightly big deal.

Everyone concerned has rushed to insist that even if Anschutz is selling off his sports and entertainment business, nothing will change for the L.A. stadium plan: Los Angeles Mayor Antonio Villaraigosa said, “I have the commitment from both [Anschutz and AEG president Tim Leiweke] that this sale will not affect plans for an NFL team to return to Los Angeles in the near future and will not affect my support for moving ahead with Farmers Field and the Convention Center site.” And Leiweke released a statement that said in part that AEG’s “virtuous circle” of entertainment businesses “uniquely positions us to execute new, world-class projects that no other company can imagine or attempt.”

It’s certainly possible that this won’t affect the stadium plans, especially if Leiweke remains at the helm of AEG: If you read the New Yorker’s long profile on Anschutz’ empire earlier this year, you’ll recall that the whole downtown sports/entertainment zone concept is Leiweke’s puppy, and Anschutz is just signing the checks. L.A. Times sportswriter T.J. Simers actually takes this so far as to speculate that if biotech billionaire (and Lakers minority owner) Patrick Soon-Shiong is a potential buyer as rumored, he’ll immediately move to buy the San Diego Chargers and relocate them to a new downtown L.A. stadium.

Speculation aside, though, anything could happen in a sale, and there’s no guarantee Leiweke will remain in place, or if he does that he’ll still have a boss who’s willing to sign blank checks for his construction projects. This is a major, major wild card, not just for L.A.’s NFL hopes but for the arena world in general, where AEG is one of two concert superpowers (along with LiveNation). The landscape is about to shift, and it’s anyone’s guess where it’ll end up.

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