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.

Report: Bulls shopping Rajon Rondo, Nikola Mirotic as trade deadline apporaches

CHICAGO, IL - JANUARY 02: Rajon Rondo #9 of the Chicago Bulls watches from the bench as the Bulls take on the Charlotte Hornets at the United Center on January 2, 2017 in Chicago, Illinois. The Bulls defeated the Hornets 118-111. The 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 Jonathan Daniel/Getty Images)
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Chicago’s front office chose to make quick-fix, treading water moves this summer. They wisely traded Derrick Rose and kept Jimmy Butler as a franchise cornerstone, but when the possibility of getting Dwyane Wade became a reality they decided to push to win more now, adding Rajon Rondo to the mix. The fit seemed awkward from the start and the result is exactly what everyone outside Chicago predicted — a roughly .500 team (22-23) that is terrible at shooting the three.

The Bulls are barely in the playoff mix and are now looking to make changes, shopping Rondo and Nikola Mirotic in hopes of finding players that are better fits, reports Joe Crowley of the Chicago Sun-Times.

According to multiple sources, the Bulls have been actively shopping Rajon Rondo and Nikola Mirotic in hopes of shaking up the roster, as well as making a second-half run in the wide-open Eastern Conference. However, according to one of the sources, neither player is moving the needle as far as what general manager Gar Forman deems a worthy return.

“Obviously, you knew that would be the case with Rondo,’’ the source said. “But they don’t like what they’re hearing back on [Mirotic] either. Then again, that’s a [front office] that tends to overvalue its assets.”

This isn’t really news to anyone following the Bulls, they have been looking for deals — particularly for Rondo — for a little while.

The bigger question is: What do the Bulls think they could get back for Rondo? It’s not going to be anything of value. The summer free agent market for him was not strong and, while he was arguably the best point guard still on the market when they went looking, the $14 million they gave him this season was more about money they had to spend than pure market value. Since then, Rondo has had clashes with the coaching staff and been sent to the bench which plays into his reputation (whether that is fair or not is another question), making it even harder to find a taker for him.

Mirotic has taken a step back this season and is inconsistent with what his supposed to be his strength, outside shooting — he is hitting just 31.1 percent from three this season. While a change of scenery could be good for his touch from the outside, he is also a major defensive liability, which limits his value.

All of which is to say, the Bulls are not going to get a lot in return here. The Bulls may realize that Cristiano Felicio is the future at that spot for them, but it doesn’t mean others are biting on Mirotic.

Also, just a reminder that the Bulls are shooting down all trade interest about Butler.

 

Baron Davis figured out why Russell Westbrook isn’t starting All-Star Game: Russian hackers

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When the starters for next month’s All-Star Game in New Orleans were announced this week, there was a mini-uproar on Twitter because Russell Westbrook — the guy averaging a triple-double this season — wasn’t picked. It’s hard for me to get worked up over two-time MVP Stephen Curry getting the nod, but if you want someone to blame it was the fans’ call — they voted Curry first overall, James Harden second, Westbrook third. The players and media had Westbrook first, Harden second, but the tie is broken by the fan vote.

Enter Baron Davis with the timely joke.

We just need to tie in a Zaza Pachulia joke and it will be perfect.

Report: Bucks brought Jabari Parker off bench for discussing with media team’s meeting

Milwaukee Bucks forward Jabari Parker, center, looks for an open teammate as he is surrounded by Miami Heat players during the second half of an NBA basketball game, Saturday, Jan. 21, 2017, in Miami. The Heat defeated the Bucks 109-97. (AP Photo/Wilfredo Lee)
Associated Press
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The Milwaukee Bucks had lost four in a row and had slid out of a playoff slot in the East. It’s not one end of the court — in their last five games, the Bucks had the second-worst defense and fourth-worst offense in the NBA. After that fourth loss, the team held a players’ only meeting, one where Jabari Parker reportedly ripped his teammates for a lack of togetherness.

In the postgame media sessions that followed, Parker told the press he confirmed there was a meeting and said he had been “thrashed” by his teammates for what he said.

It was that speaking to the media that got him benched for a game — as decided by his teammates — reports Chris Haynes of ESPN.

Milwaukee Bucks forward Jabari Parker did not start in Saturday’s road loss to the Miami Heat for violating a team rule that prohibits disclosing locker room discourse to the media, league sources told ESPN…

Parker’s teammates deliberated and decided the appropriate punishment for the violation was to bring him off the bench against the Heat, league sources told ESPN. It was the first time this season that he did not start.

The meeting and the benching didn’t help, the Bucks fell to the lowly Heat 109-97. (Team/players meetings are overrated in how often they help teams turn things around.)

The good news for the Bucks is that in a tight East they remain just a game out of the playoffs and three games out of the five seed. It’s going to be a tough week to turn that around with the Rockets, resurgent Sixers, Raptors, and Celtics on the schedule.

 

Denver’s Kenneth Faried gets up, blocks DeAndre Jordan dunk attempt (VIDEO)

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Without Chris Paul and Blake Griffin in the lineup, the Clippers don’t have much going for them offensively. However, there is one thing: DeAndre Jordan can still run to the rim and dunk with authority.

Denver’s Kenneth Faried took that away Saturday.

Faried hustled back in transition, showed he still had some hops and swatted away a Jordan dunk attempt.

The Nuggets went on to win the game comfortably, 123-98, behind 19 points and 10 boards from Nikola Jokic.