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.

There’s already an Anthony Davis Lakers mural up in Los Angeles (PHOTO)

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Anthony Davis isn’t in Los Angeles yet. In fact the trade between the Los Angeles Lakers and New Orleans Pelicans hasn’t been completed, and reportedly won’t be completed until July 6.

But that doesn’t mean that Lakers fans aren’t already anticipating his arrival.

On Instagram Sunday, Venice muralist Gustavo Zermeño Jr. posted an incredible new rendering of Davis, draped in Forum blue and gold.

Via Twitter:

Zermeño is the artist who painted one of the LeBron James murals that was defaced in L.A. last summer.

The Lakers did nothing right last season, and are a train wreck of an organization. Despite that, they have landed one of the best players in the NBA and if he can stay healthy they should be able to find their way back to the playoffs next season. There’s lots of work to do on this Lakers roster, and as much as people want to jump to conclusions, it’ll take some filling out before they’re contenders.

Davis is a step in the right direction, but this whole thing could go in the direction of “Now This Is Going To Be Fun” very quickly.

Never put it past Lakers fans to go all in. Less than 24 hours from the announcement of the trade and we already have a mural of Davis.

Reports: Pelicans fielding calls from teams interested in No. 4 pick

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The trade for Anthony Davis has not been completed yet. The New Orleans Pelicans and Los Angeles Lakers are apparently not expected to finalize the deal until July 6.

But one thing that could throw those plans out the window is if GM David Griffin gets another offer before Thursday’s NBA Draft. According to multiple reports, teams have been calling the Pelicans interested in the No. 4 overall pick they gleaned in the deal in principle for Davis.

Via Twitter:

From a distance it appears Griffin is not looking to completely rebuild from the bottom. His roster isn’t really set up for that, anyway. Jrue Holiday is already 29, and having two 19 or 20-year-olds would necessitate waiting longer to contend than perhaps Holiday’s contract lasts.

Still, it’s not as though Griffin couldn’t have another deal in principle in place by Thursday for that pick. Teams select for other teams all the time. A wink-and-handshake deal could be done so the Pelicans select for whomever a potential trade partner wants at that No. 4 spot.

The NBA is a weird place so I wouldn’t be surprised if this deal gets done earlier, or even later as Adrian Wojnarowski has suggested is possible. At the end of the day, the outcome is that Davis is on the Lakers despite that organization doing absolutely nothing right to get him there other than being in L.A.

Report: NBA asked Drake not to attend games in Oakland

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Emotions were running high during the NBA Finals among the fan bases: The Raptors were on their way to their first-ever title and their fans were loud even on the road; In Oakland, there was a part-owner of the team shoving Kyle Lowry.

Drake giving Nick Nurse a shoulder massage on the sidelines at Oracle would not have gone over well.

So the NBA encouraged Drake not to come to the games in Oakland, according to a report from TMZ.

The NBA reached out to Drake and asked him not to travel to Oakland for any of the NBA Finals games at Oracle Arena due to “security concerns,” multiple sources tell TMZ Sports.

We’re told the league expressed concern about potentially angry Warriors fans doing something stupid like taunting Drake or throwing stuff at him … which wouldn’t just put Drake at risk, but also other people sitting near him.

In the end, they all agreed it was best for Drake to stay in Toronto for the away games — with Drake ultimately leading the Raptor fan watch party at Jurassic Park during Game 6.

They chose… wisely. I have no doubt the NBA encouraged this move, it only makes sense.

Besides, the last thing these Finals needed was more Drake.

Winners and Losers in blockbuster Anthony Davis trade

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It is very possible both teams at the heart of this blockbuster trade — the Lakers and Pelicans — get what they want out of this deal. Which is rare. It’s the goal, no GM makes a trade thinking they lost the trade, but usually someone comes out on the short end.

This time, the Lakers — a team that has missed the playoffs six years in a row — got their man now have two of the top seven players in the league. Meanwhile, the Pelicans have (or will after Thursday’s draft) Zion Williamson and are set up in the short term to be entertaining, and in four years or so could be a beast in their own right.

But there are losers to go with the winners in this trade, here is the breakdown.

Winner: Anthony Davis.

The man got where he wanted to go. He felt he toiled in obscurity in New Orleans, and that the small market franchise had done a poor job building a team around him (which is absolutely true). Davis believed he wasn’t getting the endorsements and attention he deserved. That changes now (and be careful what you wish for). This summer he will lead Team USA at the World Cup in China, then come back and play next to LeBron James in Los Angeles — the brightest of all spotlights — with a team that has the potential to contend. Davis got exactly what he wanted, now he just has to stay healthy and take advantage of it.

Winner: LeBron James.

At LeBron’s first press conference in Los Angeles, he said he knew he needed to be patient as they built this team to contend around him… and everyone knew that wasn’t going to happen. He’s 34, he not at that point in his career where patience is an option. Now he has another elite star around him — and a perfect complementary player for his game. It should work. The pressure now is on Laker GM Rob Pelinka to fill out the roster with role players who can make this a contender, because star power alone is not enough in today’s NBA.

Loser: Boston Celtics.

Danny Ainge had a plan and haul of assets to pull it off (thanks again Brooklyn). The Celtics signed Gordon Hayward, traded for Kyrie Irving, drafted well and developed those players, things were coming together… and then it all fell apart. Boston didn’t land Paul George or Kawhi Leonard in trades. Hayward had the freak injury and is not back to his old self yet. Irving became disenfranchised this season and now he has one foot out the door (likely to Brooklyn). Rich Paul kept saying Davis would only be a rental in Boston. All of that meant Ainge couldn’t go all-in on a Davis trade like he had planned (throwing in Jayson Tatum specifically), and once again Boston missed out. Ainge is a great GM, don’t get me wrong, but this shows how hard to put together these multi-year plans in the NBA and pull them off. In an East with Toronto (who may or may not be the same after this summer), Philadelphia, and Milwaukee, Boston has a lot of work to do to get back to contender status.

Winner: Rich Paul.

Fans may not like his tactics — and there were miscalculations along the way — but the job of an agent is to get his clients where they want and what they want. Rich Paul has done precisely that. The man orchestrated this. His client LeBron is in Los Angeles where he wants to be, and now has a running partner in another Paul client, one who now has the spotlight he wanted. It may not have happened on the timeline Paul wanted, but he may be the biggest winner in this whole thing.

Loser: The New York Knicks and Los Angeles Clippers.

The Knicks have big free agent plans this summer, and maybe Kevin Durant still comes (and plays, eventually). However, the longshot dream of landing Davis is dead, and worse yet now there is another major player for elite free agents in the game. One that is a better draw than New York as you read this. Maybe this summer works out for New York, but in the past week the market got a lot more complex.

Twenty-four hours ago, the Los Angeles Clippers were the best free agent destination in Los Angeles. Now…. they may still land Kawhi Leonard (or he may choose to stay in Toronto for a year or two, who knows?) but the Lakers are still the Lakers in that market. And now the Lakers are the big free agent draw.

Winner: David Griffin and the New Orleans Pelicans.

When the Pelicans won the NBA Draft Lottery — and essentially the rights to draft Zion Williamson — the calculus of this trade changed a little. They now had the potential superstar/top-five player, it became a matter of building along that timeline. This trade does that. New team VP David Griffin had leverage (the Lakers needed a star and this was their best chance) and he used it to get a haul. Maybe the Pelicans keep Lonzo Ball and Brandon Ingram, maybe those two get flipped for other players, and that same thing is true of the draft picks, starting with the No. 4 in this draft. Bottom line, Griffin got this franchise the building blocks to contend, and while there is work to do to reach that level in the short term this team is going to be fun to watch.

Loser: Dell Demps and Magic Johnson.

The nuts and bolts of this trade could have been worked out at the trade deadline if egos and emotions had been put aside. They weren’t. In New Orleans, there was anger at the timing and nature of Rich Paul’s trade request, which led to people above Demps shooting down the idea of any trade with the Lakers. Demps wouldn’t even talk to Pelinka — only Magic, and barely that — and wasn’t able to manage up and get the people above him on board (Griffin pulled that off). Magic, when he was in the office, bungled this and killed the Lakers’ locker room chemistry in the process. That it got done this June, and with far fewer back-and-forth rumors, doesn’t reflect well on the guys out the door.

Winner: Lakers fans (and their sense of exceptionalism).

There is some pushback on this trade in Lakers nation. Fans become emotionally attached to and overvalue draft picks the team brings in, fans watch them develop and see them as “their guy.” Those fans don’t want to give up Ingram and Ball and Josh Hart (and a lot of picks), and they are right that is a lot of assets… and the Lakers got Anthony freakin’ Davis. The Lakers now have two of the top seven players on the face of the earth. This is what Lakers fans expect — stars to come to them, and for them to contend. In Los Angeles, Lakers’ exceptionalism is a real thing. That faith has been rewarded. Savor that.

Loser: LaVar Ball.

Does this even need to be explained?