Will Houston Ice Seattle’s NHL Hopes?

July 26, 2017

With the Houston Rockets now for sale, the possibility arises that the NHL could again look at that market.  The Rockets owner remained unwilling to consider sharing the arena on any terms that would have been acceptable to NHL partners throughout his ownership of the franchise (though minor league hockey was played there).  And during his ownership reign, the NHL continued its sun belt market focused strategy.  It’s fair to conclude that given Houston’s size, wealth and location, the city would have appeared near the top of the list with a more welcoming arena partner.

Houston’s strengths as a market still apply, which could impact Seattle’s NHL hopes.  The Toyota Center is NHL ready, a franchise there could be placed in either conference, or allow another Central time zone club to switch conferences.  That lessens the need for Seattle as an addition to the shorthanded Western Conference.  It probably also helps to have a ready made rival nearby in the Dallas Stars.  And Houston has a surprisingly robust hockey history, ranging from the WHL to various minor league teams.

This all goes to show that those who claim to want a modern arena developed within Seattle, along with their involvement in the excruciatingly slow process, best get moving.  Events far from here, and outside local politicos reach, can have just as much impact in determining whether the city gets to suit up in the NHL or NBA (again) in the future.


The Arena Plans Are In

April 30, 2017

Both AEG and OVG submitted their Key Arena proposals earlier in the month.  With each willing to build before a tenant is guaranteed, they take substantial risk.  And because of the returns their projects must generate for their proposals to operate profitability, that theoretically leads to less revenue and profit available for whomever may partner with them to own the team(s) in the building.

In the NFL, the recent proposal to keep the Raiders in Oakland, along with AEG’s Farmers Field project in Los Angeles a handful of years back, were frowned upon by the league because they didn’t want another party (the proposed stadium developers) standing between the ownership groups and the building revenues.  I haven’t heard either the NHL nor NBA voice such concerns outright for arenas, or these Seattle proposals, in their leagues.

But it stands to reason that future NHL or NBA ownership groups in a remodeled arena will not benefit from the full profitable potential of the building because AEG or OVG will have rights to certain revenue streams.  This may not matter to owners who just want to own a franchise.  And it might appeal to some owners who may not have the wherewithal to finance both an arena and team themselves.  Because of this, it’s quite possible that an ownership group operating out of a remodeled arena may not have as great a revenue potential as the Puget Sound market might suggest.  Whether that hampers the competitiveness of the team(s) may be determined by the willingness of the owners to reach into their own pockets on occasion.


Why The Arena Decision May Slide To 2018

February 27, 2017

The KeyArena RFP calls for proposals by mid April, with a city decision by the end of June.  Concurrently, the MOU with Chris Hansen’s SoDo project expires at the end of November.  Though with Hansen offering to essentially scrap the MOU by privately funding the arena, that date isn’t as significant.  However, the city says the new proposal triggers a new review, estimated to be completed in late summer or early fall.  This despite the only major change being the financing.

With a mayoral election this November, along with two city council seats, one held by retiring pro SoDo Burgess and the other by anti SoDo Gonzalez, it’s quite possible that any second look at the SoDo proposal gets pushed to next year.  That could even be the fate of the winning RFP bid, favored to be current KeyArena operator AEG.  Because while a decision by early summer may be preferred, action on that bid may be delayed as the city “process” grinds on, taking every and all possible KeyArena constituents into account.  That’s why some have estimated the winning bid may not see completion of the project until 5-7 years out.  Entertainment and sports facilities understandably don’t rank high on elected officials’ agendas, though there is something to be said for acting within a reasonable time frame on private offers that other cities would elevate immediately.

And while SoDo naysayers such as the Seattle Times believe this whole process is rushed, with no prospective NBA or NHL teams on the horizon, those with an understanding of the situation know that such claims are ridiculous.  Right now, NHL clubs in Brooklyn, Raleigh and Phoenix are actively looking for arena or ownership solutions in their home markets, for now.  Just over the past few years, NBA or NHL teams experienced sudden ownership turmoil that led to the sale of teams in Sacramento, Los Angeles and Atlanta (to Winnipeg).  Stuff happens.  It’s imperative for a region that wishes to host teams to be prepared for such situations, to say nothing of the cleaner expansion possibilities.

But Seattle, under current elected officials, is not such a city.  That’s why the process has dragged along.  And it’s why the likely winning bid to renovate KeyArena will be focused around turning the old, temporary, 1962World’s Fair building into a midsized concert venue.  If the NBA or NHL and prospective owners don’t like that, well, that’s not the city’s problem.

So we wait, and wait and wait.  After having over 10 years to consider KeyArena’s future, the city is forced to react only when a legitimate proposal emerges in SoDo.  Given the city’s intent on slowing or stopping the SoDo plans, barring a miracle, sports fans are left hoping a serious arena proposal emerges outside the city limits.  That would be a miracle in itself, likely on par with city politicos giving Hansen’s plan the green light any time soon.


Markets hosting both the NBA and NHL

February 8, 2012

Given recent discussion about the possibility of a new arena in SoDo, filled by the NBA, NHL or both, some in the media have wondered about the success rate of markets that contain franchises from both leagues.  And beyond that, some question whether success is determined by whether the franchises share an arena, or have their own.   In reality, it may depend on whether the same ownership group owns the arena and both franchises.  Otherwise, if one team is renting the building and not getting all the possible revenues the arena provides, it may be at a disadvantage compared to its co-tenant.   Without diving into attendance records, which often fluctuates with on court or on ice success, or the suite and club seat sales, reflective of the amount of corporate presence in a market, I’ll just show the common markets and their arenas for comparison sake, along with distance between buildings.  The markets are mainly determined by primary census statistical areas.  And just for fun, I’ll throw Seattle into the comparison to see how it fits, with a twist.  Again, this is conditioned on major league sized arenas based on capacity (minimum 17K seats).  I didn’t measure distance between arenas in the New York area, they’re all relatively close together, except Nassau Coliseum.

Top 10 markets

1. New York/New Jersey

Madison Square Garden (Knicks/Rangers); Barclays Center (Nets, Fall 2012); Prudential Center, Newark (Devils/Nets); Nassau Veterans Memorial Coliseum, Uniondale (Islanders)

2. Los Angeles

Staples Center (Lakers, Clippers, Kings); Honda Center, Anaheim (Ducks) – 30 miles

3. Chicago

United Center (Bulls/Blackhawks)

4. Washington/Baltimore

Verizon Center (Wizards/Capitals)

5. Boston/Providence

TD Garden (Celtics/Bruins)

6. San Francisco/Oakland/San Jose

Oracle Arena (Warriors); HP Pavilion (Sharks) – 40 miles

7. Dallas/Fort Worth

American Airlines Center (Mavericks/Stars)

8. Philadelphia/Wilmington

Wells Fargo Center (76ers, Flyers)

Next 10 markets

11. Miami/Fort Lauderdale

American Airlines Arena, Miami (Heat); BankAtlantic Center, Sunrise (Panthers) – 35 miles

12. Detroit

Joe Louis Arena (Red Wings); The Palace, Auburn Hills (Pistons) – 33 miles

13. Phoenix

US Airways Arena (Suns); Jobing.com Arena, Glendale (Coyotes) – 20 miles

14. Seattle/Tacoma

KeyArena; Tacoma Dome – 35 miles

15. Minneapolis/St. Paul

Target Center, Minneapolis (Timberwolves); Xcel Energy Center, St. Paul (Wild) – 10 miles

16. Denver/Boulder

Pepsi Center (Nuggets/Avalanche)

Some observations.  It’s not surprising that nearly all the top 10 markets have teams in both leagues.  Their population, corporate base and local media should be able to support them.  The only top 10 markets that do not host both leagues are Houston and Atlanta.  Atlanta, of course, had both sharing an arena until the Thrashers moved to Winnipeg last year.  The second time the NHL has left Atlanta.  Houston has never had an NHL team, and while they have a relatively new arena, there may be concern about the NHL adding another Sunbelt market.  However, I tend to think Houston would be a success, more modeled after Dallas than Atlanta.

The next 10 markets aren’t as certain due to smaller populations, corporate bases and local media support compared to the larger markets.  For all dual markets, you can see it’s a mixture of shared arenas and arenas for separate sports.  Detroit seems to be doing fine with two arenas, while Phoenix and Miami/Fort Lauderdale haven’t.  The Twin Cities also appear to be doing fine with two, as does Denver does with one.  Again, it’s all subjective until one starts measuring attendance and high end seat sales.  I added Seattle/Tacoma to remind that we already have two arenas, they just happen to both need significant renovation to be useful for the NBA or NHL.  And while it’s likely that if a new arena is built in SoDo it would host both leagues, it’s not the only option.  Some other time I may dedicate a post as to how the Tacoma/South Sound market alone (ie, without greater Seattle and it’s benefits) actually compares reasonably well to some current NHL markets.

Measured by total personal income (TPI) in each of these dual markets, and the TPI necessary to support each of the major league franchises the markets have, Detroit, Phoenix, Minneapolis/St. Paul and Denver are overextended.  In other words, they don’t have enough TPI to support all of their major league franchises across all sports.  If Seattle/Tacoma was to become a dual market, in addition to hosting the NFL, MLB and MLS, it’d be overextended as well, but by less than any of those markets mentioned above.  This is because we live in a relatively wealthy market for our size.  But the decision to place teams in a particular market, and the eventual success of that market, is determined by things beyond just the amount of wealth in a region.  And not all of those criteria are necessarily measurable.