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.

Reports: Knicks reach deal to send Carmelo Anthony to Thunder

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Carmelo Anthony and his camp pushed the Knicks the last 48 hours to get a trade done before training camp opens on Monday, which included Anthony expanding the list of teams he would accept a trade to.

One of those teams was the Oklahoma City Thunder, and that got the deal done, reports Adrian Wojnarowski of ESPN (Shams Charania of Yahoo has also confirmed the reports).

Anthony waived his trade kicker to make the deal work.

The pick is the Bulls’ 2018 second rounder, so it should be a high second.

This trade moves the Thunder into the second tier conversation in the West, battling Houston and San Antonio in a deep conference. Everyone is still chasing Golden State, which should be improved this season.

The Thunder get another star to pair with Russell Westbrook and Paul George, another shot creator that will be difficult to account for. The Thunder will have a strong defense — Anthony does not hurt that much, Kanter doesn’t defend either, but he did come off the bench for them — and with this move they get more offense.

The move also ads $12 million to a Thunder tax bill.

The Thunder aren’t thinking about next season, they are all in on this one. When you have a chance, take a big swing.

The Knicks get rid of ‘Melo’s shadow and make this Kristaps Porzingis‘ team. They get a solid bench scorer in Kanter, who is owed $17.8 million this season and has a player option for $18.6 million (which he will probably opt into, considering the tight market next summer). McDermott is in the last year of his rookie deal and has a lot to prove. The pick is nice, but not a first rounder.

This is not a great haul for the Knicks, but it speaks to Anthony’s trade value — he can score, but his style of play and cost had only a few teams interested. New York may have done just as well buying Anthony out after last season.

LeBron James calls President Trump a “bum,” Chris Paul tells him to stay in his lane

Associated Press
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LeBron James isn’t going to stick to sports.

The way the president isn’t sticking to politics.

Donald Trump pulled his White House invitation to the Warriors Saturday after Stephen Curry said he would vote not to go to make.a statement.

LeBron James came to Curry and the Warriors defense on Twitter.

LeBron endorsed and campaigned for Hillary Clinton in the last election.

Chris Paul also took a shot at the president.

LeBron and CP3 have been more outspoken on social and political issues in recent years, which has worked for them in an era where fans want players to be authentic and themselves.

Trump on Friday night at a rally in Alabama slammed the NFL for its increased focus on concussions saying it was ruining the game, and said regarding national anthem protests in the league:

“We respect our flag. Wouldn’t you love to see one of these NFL owners, when somebody disrespects our flag, to say get that son of a b—h off the field, right now, out? He’s fired.”

This may resonate with some NFL fans, but LeBron will resonate more with NBA fan base, which is younger, more urban, and much more multicultural. The NBA fan base leans left of the NFLs, plus is far more international (where Trump bashing plays well).

Saturday morning, after being told by the NBA the Warriors were going to vote on whether to come to the White House, Trump pulled his invitation.

Now we know how LeBron and CP3 feel about that.

President Trump withdraws Warriors invitation to White House after Curry’s remarks

Associated Press
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As tends to happen with presidential decrees in this administration, the announcement came via Twitter — the Golden State Warriors are no longer invited to the White House.

Curry had been clear Friday at Warriors’ media day that he planned to vote no when the Warriors discussed visiting the White House.

“We have an opportunity to send a statement that hopefully encourages unity, encourages us to appreciate what it means to be American, and stand for something.”

Curry, along with coach Steve Kerr and other members of the Warriors organization had been openly critical of President Donald Trump and his policies. They were expected on Saturday to vote to decline the invitation. The NBA had let the White House know what was coming.

Trump decided to be proactive.

The tradition of championship teams going to the White House for a PR photo-op — it is nothing more than that — goes back many administrations. Some sports figures have skipped the White House event in the past when Barack Obama was president (even if Tom Brady wants to deny that’s why he bailed), but teams have not skipped it. Of course, now the Warriors aren’t skipping it, they are not invited.

 

Russell Westbrook to miss start of training camp after PRP injection in knee

Associated Press
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There is a physical price for the historic, MVP season Russell Westbrook had last go around.

When the Oklahoma City Thunder open training camp next week, Westbrook will be sidelined for a couple of days to rest his knee after getting a platelet-rich plasma therapy injection, Thunder GM Sam Presti told the media (as reported by Royce Young of ESPN).

PRP therapy was made popular in the NBA by Kobe Bryant and now a number of players have used the treatment. It involves the player giving some blood, which is then spun in a centrifuge to separate the platelets, which are then injected back into the area where the person wants to promote healing.

Westbrook is the heart and soul of the Thunder, averaging a triple-double last season with 31.6 points, 10.7 rebounds and 10.4 assists per game. With the off-season addition of Paul George, the Thunder are a dangerous team in the West, one that will have a very strong defense and a couple of elite scorers now.

Westbrook also has a max contract extension sitting in front of him from the Thunder, as he has since July 1, which he has yet to sign. That should make Thunder fans a little nervous. George is in the last year of his contract, and there have been not-so-subtle hints out of his camp he is headed to the Lakers next summer. If this year goes well in Oklahoma City — such as the Thunder reaching the Conference Finals — maybe George reconsiders, and with that Westbrook would stay (he has professed and shown loyalty to the city so far). Maybe they stay anyway. However, both men seem to be using the LeBron James playbook of keeping all their options open.