Indianapolis, Kansas City, and the changing arena economy

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What do you look at to tell if a team is doing well? Attendance, right? After all, the way to tell how good a team is if they have fans coming to games.  Low attendance means you’re not making money. Sure, the Clippers are the exception, but it’s L.A. Everything’s overpriced. But attendance is still the real determining factor in success.

Right?

In the words of Dwight Schrute, “False.”

The real key to a franchise’s success is a more complicated algorithm that factors in sponsorships, partnerships, and attendance. But the attendance piece isn’t built on sheer numbers, but in quality.

The Dallas Morning News’ Mark Francescutti has an excellent article today outlining the success teams are having by doing something counter-intuitive. Slashing prices. The Mavs are obviously the centerpiece, with this money quote from Mark Cuban:

“Bottom line is that the upper bowl is becoming a smaller and smaller
part of our total revenue,” owner Mark Cuban
wrote in an e-mail to The Associated Press. “So we would rather
have a full house than make a couple dollars more. More fans means a
better home-court advantage, it means a better fan experience, which in
turn means more sales.”

The reason that the Mavs can make those kind of cuts is because the modern arena economy is now dependent on corporate suites and club seating. By focusing on those tickets, it allows the teams to fill out the big house.

This is why so many owners are requesting new arenas (outside of sheer greed). The modern economy has shifted to a sleeker, more efficient model and many older arenas are simply not fitted to that model.

Which brings us to the case of Indianapolis versus Kansas City. We told you yesterday about the Pacers potentially being sold for dirt cheap (that’s right, $230 million is cheap in what we’re talking about). One of the reasons a potential owner may want to relocate the team is because of the way the arena is configured.

Conseco Fieldhouse has 69 luxury suites. To put that in perspective, American Airlines Center in Dallas has 144 suites. Geez. Even smaller markets like the Rose Garden in Portland has 70 suites. Arco Arenas is severely behind with only 30 suites, one of the reason a new arena is a major issue in Sacramento. The Toyota Center in Houston has 80 suites.

Now, market size is going to be a huge factor, but so is how new the arena is, as well as what kind of club level seats are available. Kansas City has been a place discussed as a potential arena location for years, because they have a brand new arena, the Sprint Center, with no tenant. Huge building, no tenant. The arena also features 72 suites and a higher capacity for club seats than Conseco. So you’d have a similar overhead structure in a cheap city, with a building that maximizes profit, if you can fill it.

The arena itself is beautiful. When I spoke with Hornets’ guard Chris Paul at a preseason game in KC, he remarked that he “couldn’t believe how nice the arena was.” Everyone that attends an event there is stunned it’s so nice and even more amazed it has not regular tenant, outside of whatever Miley Cyrus/Jonas Brothers/Nickelback merchandise-fest is in town.

The public funding issue is going to be a problem anywhere in this country during the recession, but somewhere like Indiana with traditional Midwestern values is going to be even less likely to pony up for some new owner to build an arena he can charge more for to see a team that won’t be good for some time.

The Pacers are an institution. But this situation become representative of the changes going on in modern arena structuring.

UPDATE: Some interesting numbers on a few other arenas. The new Amway Center for the Magic will only feature 56 suites with 10 specialty suites. Similarly Charlotte features 67 suites, but does feature another 60 “lodge boxes.”

Additionally, a commenter points out that Conseco features two hosptiality suites, making for a total of 71 suites in Conseco to 72 at Sprint Center. It’s easy to argue that moving from Indiana to KC would be a lateral move, and a costly one at that.

Cavaliers fan makes good on bet, eats shirt after Warriors win West

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Don’t make a bet you’re not willing to follow through on. I mean, we all do it — “If Trump wins I’m moving to Canada” — but never really mean it. We don’t follow through.

Except sometimes people do.

Reddit NBA user ‘PARTYxDIRTYDAN’ made a bet that he would eat his shirt if the Warriors repeated as Western Conference champions. Call it a bad beat if you want — he came about as close to winning that bet as he could without actually winning it — but the man was good to his word. He had a little BBQ sauce on it, but he ate his shirt.

He probably shouldn’t make a similar bet in the Finals, no matter how big a Cavs fan he is.

(Hat tip Deadspin)

NBC/PBT Podcast: Cavaliers vs. Warriors NBA Finals preview with Dan Feldman

CLEVELAND, OH - JANUARY 18: Stephen Curry #30 of the Golden State Warriors and LeBron James #23 of the Cleveland Cavaliers react during the first half at Quicken Loans Arena on January 18, 2016 in Cleveland, Ohio. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory copyright notice. (Photo by Jason Miller/Getty Images)
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LeBron James got what he probably wanted deep down — a second chance at Stephen Curry and the Golden State Warriors in the NBA Finals (starting Thursday night). It’s a chance for revenge from last season and to knock Curry off his pedestal.

Except this is a difficult matchup for the Cavaliers and their current style of play, something Kurt Helin and Dan Feldman of NBC Sports get into in this breakdown of what’s to come on the NBA’s biggest stage.

They both foresee a long couple of weeks coming for Kevin Love, and difficulty for the Cavaliers getting enough stops. While the Cavaliers now want to play faster and shoot threes, they may have to change tactics against the Warriors.

As always, you can listen to the podcast below, or listen and subscribe via iTunes, download it directly here, or you can check out our new PBT Podcast homepage, which has the most recent episodes available. If you have the Stitcher app, you can listen there as well.

Early NBA Finals betting money flowing to Cleveland

CLEVELAND, OH - JUNE 16:  LeBron James #23 of the Cleveland Cavaliers shakes hands with Stephen Curry #30 of the Golden State Warriors after the Warriors defeated the Cavs 105 to 97 to win Game Six of the 2015 NBA Finals at Quicken Loans Arena on June 16, 2015 in Cleveland, Ohio. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, user is consenting to the terms and conditions of Getty Images License Agreement.  (Photo by Ezra Shaw/Getty Images)
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Golden State is the clear favorites to beat the Cavaliers and repeat as NBA Champions.

But for gamblers, there’s not much money to be made in taking the safe route, where you have to risk a lot to win a little. The money is on the underdog.

Which is why the early cash has gone to Cleveland, something reported by online gambling site Bovada.lv. Here are their current odds to win the series:

Cleveland Cavaliers +175 (7/4)
Golden State Warriors -210 (10/21)

(That means for every $100 bet on Cleveland the gambler would get $175 if they win; where with Golden State it would take a $210 bet to win $100.)

“We opened the NBA Finals at Cleveland +200 (2/1) and Golden State -240 (5/12) and the public pounced on Cleveland, forcing the adjustment of the lines to +175 and -210,” said Kevin Bradley, Bovada.lv Sportsbook Manager. “While the wagering has evened out a bit more on each side, 60% of the public is currently on the Cavaliers.”

This just makes sense as a gambler — why would I risk so much to win with Golden State? I get the much better payoff with a smaller amount bet with Cleveland, even if the outcome is less likely to go my way.

Remember, for a book the goal is often even betting on both sides, so that they rake in their percentage and win regardless of the outcome. That said, the books may be Warriors fans for the next couple of weeks.

Bismack Biyombo says he wants to stay with Raptors, would take hometown discount

TORONTO, ON - MAY 15:  Bismack Biyombo #8 of the Toronto Raptors celebrates late in the second half of Game Seven of the Eastern Conference Quarterfinals against the Miami Heat during the 2016 NBA Playoffs at the Air Canada Centre on May 15, 2016 in Toronto, Ontario, Canada.  NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Vaughn Ridley/Getty Images)
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Bismack Biyombo made $3 million this season playing for the Raptors.

Next season he is going to make five times that or more playing somewhere. Biyombo is a free agent and the going rate could be $17 million a year.

After a breakout playoffs, Biyombo wants to stay in Toronto with the Raptors and would even consider a hometown discount to make that happen. That’s what he said on Sportsnet 590 The FAN’s Andrew Walker Show. Does Biyombo expect to wear a Raptors jersey next season?

“Honestly, I do. We still have some unfinished business. It was so much fun to see the team go from last year to this year making the Eastern Conference finals. Be it would be fun to go even further next season.”

The Raptors want to bring him back, but the salary cap makes it difficult. The Raptors do not have Biyombo’s Bird rights, so they need to use their salary cap space to re-sign him. The Raptors top priority is bringing back DeMar DeRozan (who will be a max or near max player), and remember they gave Jonas Valanciunas a four-year, $64 million contract extension last summer.

Would Biyombo be open to a discount to stay in Toronto?

“Yeah. Things can always be worked out. I’ve said that to my people, I’ve said that to Masai. When the right time comes I’d be open to figuring something out. At the end of the day it’s for fun, not money. It’s not always about money. Money is great, but at the same time I ask ‘how much fun am I going to have? The city is great, the team is great, and we’re winning.”

The question may be how big a discount are we talking about? Let’s say Team X does offer $17 million a year for four years, would Biyombo start at $15 million to stay? $13 million? Where is that number?

Next season Biyombo is going to make more money than he had in his entire NBA career up to this point. This is set your family up for generations money, and while the sentiment that the game should be for fun is what we as fans of the game want to hear, how much money would you leave on the table in his shoes?

With the Raptors talking about giving Valanciunas a bigger role in the offense next season, how much can they afford to pay his backup? Biyombo could be on the move.