• COUNCILWOMAN PERRY ANNOUNCES DATES FOR NEXT TWO MEETINGS OF THE AD HOC COMMITTEE — Press Release
Sprint Center doing fine without NHL or NBA franchise
PETE GRATHOFF, The Kansas City Star
July 15, 2011
Build it and they will come. That was the plan for the Sprint Center.
In 2004, when voters approved the $276 million arena, Tim Leiweke, president of Anschutz Entertainment Group, which operates the facility, was confident that either an NBA or an NHL franchise would one day play in Kansas City.
But four years after the arena opened, the wait continues. In fact, the Sprint Center has never seemed further from landing an anchor tenant.
The NBA is embroiled in a labor dispute that makes expansion appear ludicrous and relocation a long shot. The NHL’s Atlanta Thrashers recently relocated to Winnipeg, but there was nary a mention of the team moving to KC.
For either league to set up shop here, a critical first step would have to be taken.
“You have to have some kind of local buyer,” said Luc Robitaille, president of business operations for the Los Angeles Kings. “I don’t know to what level were the talks in Kansas City, but there were some rumblings from time to time. But you have to have a buyer. What happened with Winnipeg is they had this buyer who was willing to do whatever it took for that.”
If Robitaille’s name sounds familiar, it’s because in November 2006, Leiweke appointed Robitaille as point man in the search for an NHL team for the Sprint Center. That was a coup for Kansas City, because Robitaille retired in 2006 as the NHL’s highest-scoring winger. He played 19 seasons, winning a Stanley Cup, and had deep ties to the league.
Soon after Robitaille’s hiring, the Penguins said they might leave Pittsburgh, and venture capitalist William “Boots” Del Biaggio III announced his intention of owning an NHL franchise here. Talk of expansion also was in the air. The future seemed promising for Kansas City.
But the Penguins got a new arena in Pittsburgh, expansion never happened, and Del Biaggio was arrested for bilking investors and banks of millions of dollars after buying a stake of the Nashville Predators.
While Del Biaggio showed interest in owning an NHL team that would play at the Sprint Center, he was apparently alone. It appears that AEG had no backup plan when Del Biaggio bugged out.
“No,” Robitaille said when asked if there were other interested parties. “Tim had talked to a bunch of local people. At the time, it just seemed to be one person.”
And Robitaille didn’t keep his role as Kansas City’s point man for long. On May 25, 2007, he assumed his current job with the Kings, and the Sprint Center search was taken off his plate.
Is someone else looking to bring a team to Kansas City? Leiweke declined to comment because he is on the NHL executive committee, which oversees team relocations.
Robitaille said it might be up to Brenda Tinnen, the general manager and senior vice president of the Sprint Center. But she said it is ultimately Leiweke’s responsibility.
“It’s come up from time to time,” Robitaille said. “I can’t tell you when and how. I’ve had discussions with Tim. … Kansas City is his baby, so he’s not going to let it go.”
• • •
One thing Leiweke did promise — and deliver on — was that the arena would be successful with or without an anchor tenant.
Even without an NBA or NHL team in town, the city’s share of Sprint Center revenues last year was $1.8 million, thanks largely to a seemingly endless string of major entertainment events. Meanwhile, the most recent Forbes valuations showed that 33 of 60 NHL and NBA teams had negative operating profits.
And completion of the arena was a key component in keeping the Big 12 basketball tournament in town, not to mention attracting potential future NCAA events.
All things considered, Kansas City mayor Sly James is fine without an NBA or NHL team at the Sprint Center. At a recent luncheon at the Kansas City Club, he said that if a mediocre basketball or hockey team became an anchor tenant there, the city would suffer.
“The trade-off is that teams won’t come to an arena and pay millions,” James said. “They want a sweetheart deal on their lease and locked-up dates.”
Adding an anchor tenant at the Sprint Center certainly could make it difficult for AEG to schedule concerts, which has earned the company a pretty penny. A sign outside the arena is already promoting the Michael Jackson Cirque du Soleil show, even though it’s not until Feb. 21-22.
Could a show like that be scheduled before a NHL or NBA team had set its schedule?
And would a major pro sports team draw as well as some of those entertainment events?
“It’s a tradeoff,” James said. “If it’s the (Los Angeles) Lakers, let’s do the deal. You’ll know you’ll fill it up. … I know we don’t want an expansion team (hockey or basketball). If the Penguins came here, ha ha, that would have been great.”
But the Cordish Companies, which developed the Power & Light District, is not laughing. In the past, Cordish officials have been pointed in their criticism about the lack of an anchor tenant at the Sprint Center.
Tax revenues generated by the entertainment district have missed original projections, leaving a $10 million to $15 million shortfall.
If anyone else would have a gripe with AEG for failing to find an anchor tenant for the Sprint Center, you’d expect it to be former Kansas City mayor Kay Barnes. Getting the arena built is one of the legacies of her tenure as mayor from 1999-2007.
But, like James, she’s not concerned.
“Part of our understanding with AEG was that they would make every effort over time to bring the NHL or NBA,” Barnes said. “However, it was clear from the beginning that that might not happen quickly. As you may know, a few years before we even completed the Sprint Center, there had been an exhaustive study done by consultants brought in by the Greater Kansas City Sports Commission to evaluate whether a new arena could function profitably without an NBA or NHL franchise, and that study made it clear that, yes, it could.
“That was the basis on which we moved forward, knowing we were very likely to be in a win-win situation. Either with or without a franchise, the Sprint Center would be very successful, which obviously it’s proven to be extraordinarily successful.”
• • •
In 2005, Nashville Predators general manager David Poile said an exhibition game planned for that year at Kemper Arena would show “what the interest is in Kansas City for the National Hockey League.”
Apparently, the NHL still is unsure about Kansas City.
Robitaille spoke last week of the exhibition game planned for this fall between the Kings, the organization for which he now works, and the Pittsburgh Penguins.
“I’m hoping we get a great crowd, a lot of excitement, a lot of buzz,” he said, “and it will send a message to everyone what kind of market we have in Kansas City.”
Skepticism of Kansas City’s viability as a market for another major pro sports team might not be unfounded. A 2009 NHL exhibition game at the Sprint Center featuring the Kings and New York Islanders drew just 9,792 fans — though, to be fair, the low turnout was at least partially attributable to the absence of the Isles’ then-recent No. 1 overall draft pick, John Tavares. The year before, 11,603 attended a split-squad preseason game between the Kings and St. Louis Blues that included relatively few established players.
The dismal showing for the Islanders-Kings game led one Canadian columnist to say Kansas City was off the NHL’s radar. NHL commissioner Gary Bettman told The Star earlier this year that’s not the case, but attendance is certainly one key measure of a market’s ability to sustain a franchise.
“A prospective owner or management group is going to look at the attendance potential, because ticket sales are so much more important in hockey than it is in other sports,” said Patrick Rishe, an economics professor at Webster University in St. Louis. “In other sports, ticket revenue is the second-leading source of revenue. Media is first. In hockey, ticket revenue is first, and media revenue is second.”
NBA commissioner David Stern told The Star in April that his league hasn’t ruled out Kansas City as a potential market. But while the New Orleans Hornets are often rumored to be a relocation candidate, Rishe has his doubts, even if LeBron James and the Heat sold out the Sprint Center for an exhibition game last fall.
“They have more revenue overall, but 17 of 30 teams are losing money,” Rishe said of the NBA. “… I think if you’re going to see anything in the NBA, it’s going to be contraction of two teams at some point in the next couple of years rather than seeing a relocation.”
Rishe, who also is director of the sports consulting firm Sportsimpacts, said the popularity and close proximity of the Kansas Jayhawks could leech support for an NBA franchise. He wonders if Kansas City’s market size could handle another major-league franchise, particularly since the NBA left in 1985 and the NHL bolted in 1976.
Perhaps, then, Kansas City should get used to watching concerts, NCAA events, the Big 12 basketball tournament and arena football at the Sprint Center.
“In Kansas City, where is your evidence that you will have some level of support?” Rishe said. “People can always say they’re going to support it, but people vote with their dollars.
“If you don’t have a team and haven’t had a team in a long time, it’s tough for investors and potential owners to have the guts to move a team somewhere it hasn’t been.”
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COUNCILWOMAN PERRY ANNOUNCES DATES FOR NEXT TWO MEETINGS OF THE AD HOC COMMITTEE ON THE PROPOSED STADIUM & EVENTS CENTER
Evening Meetings Set for Downtown & Valley City Halls; Public Hearing and Discussion to be Held on Draft MOU for Farmers Field & Convention Center Modernization Proposal
LOS ANGELES— Council President Pro Tempore Jan Perry will hold public hearings on the draft Memorandum of Understanding (MOU) for the proposed Farmers Field and Convention Center modernization at the next two meetings of the Ad Hoc Committee on the Proposed Stadium and Events Center. The first meeting will be held on Wednesday, July 27 at 5:30 p.m. at City Hall, followed by a second meeting on Thursday, July 28 at 5:30 p.m. at the Van Nuys City Hall to offer the public and the committee an opportunity to review the MOU prior to the July 29 single-topic Council Meeting.
The agendas will be posted on Monday, July 18. The negotiating team expects to release their report on the draft MOU by Monday, July 25.
WHO:
Council President Pro Tempore Jan Perry, Chair
Councilmember Bill Rosendahl, Vice-Chair Councilmember Ed Reyes, Member Councilmember Tom LaBonge, Member Councilmember Tony Cardenas, Member
WHEN/WHERE:
Los Angeles City Hall 200 N. Spring Street 5:30 p.m., Wednesday, July 27, 2011
Van Nuys City Hall 14410 Sylvan Street 5:30 p.m., Thursday, July 28, 2011