Potential Atlanta NHL Expansion Team Thread

[KevFu]

Well, if a person gets a vast amount of money through vastly illegal or immoral means, then I'm sure a lot of people would care. But your point is well taken, and I've seen nothing to this point that leads me to believe that Kraus has amassed whatever wealth he has through either illegal or immoral means.

I stipulated to that in the first post: "As long as it's not wealth from illegal activities, no one cares where the money is from."

 

[GreenHornet]

I stipulated to that in the first post: "As long as it's not wealth from illegal activities, no one cares where the money is from."

OK, must've missed that in your post. My apologies.

 

[Yukon Joe]

The Milwaukee Brewers were owned for decades by a car dealership owner, Allen Bud Selig; then his daughter when he became commissioner.

The Utah Jazz were owned by a car dealership owner, Larry Miller, for decades. Now Salt Lake's MLB Expansion bid is by.... Mrs. Larry Miller (as Larry has since died).

Those are just off the top of my head, I assume there are others. Let's not pretend that a guy with money being a car dealership owner means anything. An ownership group either has the money, or they don't. As long as it's not wealth from illegal activities, no one cares where the money is from.

It always blows my mind that the owner of the Winnipeg Jets through the 1980s and 1990s, Barry Shenkarow - was a lawyer. That's it. No inherited money or anything, He wound up helping to buy the team in the late 70s during the NHL merger discussions.

Franchise valuations are completely ridiculous compared to earlier eras. Some owners have become fabulously wealthy as a result. But a guy like Shenkarow was being priced out of ownership by the 1980s - it would be completely insane for someone like him to try and buy a pro hockey team today.

 

[aqib]

I'm aware. Doubting someone has enough money is totally fair game, but I just felt extremely off-put by the way it was being referred to.

Like I said, no one cares how you got the money as long as you have it.

OK I am surprised I have to put this disclaimer but here we are:

I do not have anything against car dealers. Being a car dealer is a perfectly fine way to make a living. I actually have friends who are car dealer. However, while it can be a lucrative business I sincerely doubt that a person can make enough money to bankroll a $2 billion project.

 

[TheLegend]

I don't dispute people would rather go to the suburban arena as opposed to downtown. I understand traffic. Just saying that a $1 billion arena without an anchor tenant would not be profitable by itself. If that was the case then the Markham, Ontario arena project would have been a slam dunk at $325 million.

Truist Park cost $660 million, had a guarantee of 81 home dates, and didn't have to compete with another similar sized venue. This arena you're talking $1 billion and you'll have to compete with State Farm for all the non-sports events. So if a band is doing a show State Farm and this arena would both be bidding for it thereby driving the prices down.

So yeah its comical.

People thought spending $970 million to essentially build a brand new arena under a 65 year old roof was comical,

But we have the Kracken now.

 

[CheckingLineCenter]

It's frustrating to read so many opinions that place billionaires above the average taxpayer, the homeless, the mentally ill, etc.

Developers often pay for those causes when entitling development, in cash. And long term a massive mixed use development like a stadium does a lot for the tax base if pulled off correctly. You get more money for those causes in the long run for your constituents if you can bring something like a stadium in (not to mention an area that now will attract more housing units). It’s like a catching a fish vs teaching a man to fish.

Overall it’s a negotiation. Team owners/developers know local jurisdiction is desperate for that stadium in their locality. So either play ball or don’t get it. On the flip side, governing bodies can offer attractive reductions to proffer packages and to help pay for a portion of the site. There’s a balance.

 

[Yukon Joe]

People thought spending $970 million to essentially build a brand new arena under a 65 year old roof was comical,

But we have the Kracken now.

First of all Seattle itself spent a huge sum to redevelop Key Arena/Climate Pledge Arena. That kind of public money is almost certainly going to be needed for this proposal.

Second though the ownership of the Kraken includes billionaire David Bonderman, Hollywood hit-maker Jerry Bruckheimer, together with a whole bunch of celebrity minority investors.

As @aqib said being a car dealer is a great way to earn a living, but almost certainly doesn't give you the financial resources to buy an NHL franchise.

 

[TheLegend]

First of all Seattle itself spent a huge sum to redevelop Key Arena/Climate Pledge Arena. That kind of public money is almost certainly going to be needed for this proposal.

Second though the ownership of the Kraken includes billionaire David Bonderman, Hollywood hit-maker Jerry Bruckheimer, together with a whole bunch of celebrity minority investors.

As @aqib said being a car dealer is a great way to earn a living, but almost certainly doesn't give you the financial resources to buy an NHL franchise.

I get that.

I’ve never seen this project as a single person involved. There’s maybe a dozen or so who could pull it off and few (if any) would even be interested in it.

 

[BKIslandersFan]

OK I am surprised I have to put this disclaimer but here we are:

I do not have anything against car dealers. Being a car dealer is a perfectly fine way to make a living. I actually have friends who are car dealer. However, while it can be a lucrative business I sincerely doubt that a person can make enough money to bankroll a $2 billion project.

Perfectly fair and accurate take.

I am certain he isn’t the only money behind the project though.

 

[aqib]

People thought spending $970 million to essentially build a brand new arena under a 65 year old roof was comical,

But we have the Kracken now.

That's downtown Seattle, it was the only major League arena in the area, and you had Tim Liewieke running it. This is not the same thing.

 

[ichbinkanadier]

Wouldn't this be like the Senators playing out in Kanata right now or when Coyotes were in Glendale? Keep hearing that it's too far away from the majority of their STH's.

I don't know if you intended to mean distance or time travelled but the issue with the Senators arena isn't distance per se, it's that from the east end of the city what would be a 20 minute drive under low traffic can regularly turn into a 60 minute drive and sometimes upwards of 90 minutes due to rush hour traffic. After the game, traffic is never an issue

 

[ichbinkanadier]

There are definitely higher priorities, I'm in agreement there, but I reject the idea that it's either/or.

I don't even disagree with the angry rhetoric, I just don't really want to engage in it on BoH. It's out of place.

How can it be anything but an either/or since financial resources are finite and require choices?

 

[TheLegend]

That's downtown Seattle, it was the only major League arena in the area, and you had Tim Liewieke running it. This is not the same thing.

Neither is people comparing public funded arenas in some other part of the US to the one Meruelo is trying to build as one and the same over in the other thread but here we are.

Which was my point to begin with. ¯\_(ツ)_/¯

(btw…. You do know the Seahawks and Mariners are there too, right?)

This Atlanta proposal is just beginning. Following normal behavior it’ll be like this for another 18-24 months of mass speculation before we even get to something with substance.

Meanwhile….

 

[Dooman]

Peter Pocklington was a used car dealer too

 

[Dirty Old Man]

I don't know if you intended to mean distance or time travelled but the issue with the Senators arena isn't distance per se, it's that from the east end of the city what would be a 20 minute drive under low traffic can regularly turn into a 60 minute drive and sometimes upwards of 90 minutes due to rush hour traffic. After the game, traffic is never an issue

Having known the area some from the 90s and 00s (my best friend lived in Buckhead then out in Acworth/Due West) I see Alpharetta more like if the Coyotes had ended up in the Los Arcos site as proposed in the early 2000s (and in the vicinity of some of the plan B sites). Is it on "an" edge of town? Yes, but it's the one where most of the fan base is, too.

 

[aqib]

Neither is people comparing public funded arenas in some other part of the US to the one Meruelo is trying to build as one and the same over in the other thread but here we are.

Which was my point to begin with. ¯\_(ツ)_/¯

(btw…. You do know the Seahawks and Mariners are there too, right?)

This Atlanta proposal is just beginning. Following normal behavior it’ll be like this for another 18-24 months of mass speculation before we even get to something with substance.

Meanwhile….

Lumen Field and TMobile don't compete for the same events as Climate Pledge Arena. There is a reason why most cities that aren't NY or LA only have one major league arena.

The cost of arenas these days make it very difficult for a "second" arena to be profitable. AllState Arena outside Chicago was built in 1980 for $20 million. Thats a little over $70 million today. It can make it with minor league teams, second-tier college, and some shows. You can't do that at a $1 billion price tag.

 

[LPHabsFan]

Remind me again how much money is brought in from television and advertising when you have about 50 000 - 75000 max people viewing on the high end of a metro of over 6 million people?

 

[tucker3434]

Remind me again how much money is brought in from television and advertising when you have about 50 000 - 75000 max people viewing on the high end of a metro of over 6 million people?

Not all that much. But that’s where the big growth opportunities are over the next ~25 years. You can’t grow that number unless the people have something to watch.

 

[KevFu]

Lumen Field and TMobile don't compete for the same events as Climate Pledge Arena. There is a reason why most cities that aren't NY or LA only have one major league arena.

The cost of arenas these days make it very difficult for a "second" arena to be profitable. AllState Arena outside Chicago was built in 1980 for $20 million. Thats a little over $70 million today. It can make it with minor league teams, second-tier college, and some shows. You can't do that at a $1 billion price tag.

There's a ton of faulty logic in that kind of thing. Pro sports teams have different "needs" based on what league they are in, and the price tag is totally dependent on those "needs." (Which are really "Wants of lucrative revenue streams from a long-season of games.")

But it's the LEAGUE AFFILIATION of those teams driving up the costs; and the simple fact is that no one talking the business of sports pays attention to, or cares, about the venues in a market that don't contain a top level pro sports teams.

For example, like every Convention Center in every city.

There's like SIX sport-sized venues in Las Vegas, but they serve an entirely different brand of entertainment, and it's impossible to say whether the venue is profitable or not because they're owned and operated on casino grounds, so like, of course they're profitable or else the casino wouldn't have built them.


The arenas themselves are GOING to be profitable, because they know how much it cost to operate the building for an event -- paying employees, turning on lights, etc -- and they're going to charge the person looking to use the facility a price that ensures they make money, OR they just sit dark that day.

The person who loses on money on events in an arena is the person moving to a bigger venue ONCE, not selling enough tickets to cover what they paid the arena, and then slinking back to a smaller venue the next time.

 

[varsaku]

Not all that much. But that’s where the big growth opportunities are over the next ~25 years. You can’t grow that number unless the people have something to watch.

With RSNs collapsing, it doesn't look like there will be much money made through it if teams are running them with smaller viewers count.

 

[tucker3434]

With RSNs collapsing, it doesn't look like there will be much money made through it if teams are running them with smaller viewers count.

The RSN’s are a short term issue. MLB and NBA are also affected. They won’t be homeless so the NHL won’t be either.

 

[LPHabsFan]

Not all that much. But that’s where the big growth opportunities are over the next ~25 years. You can’t grow that number unless the people have something to watch.

Growth. Market size. Potential. So basically selling things on a hope and a prayer because that's all this is. There is zero evidence to show that this would be successful. How many teams viewership numbers would you have to add up to surpass even the lowest of the Canadian markets (170 000 from 2021 numbers)?

And these teams you'd be adding up are well established teams in major ish markets. I'm guessing between 3 - 5.

You want to know what's going to happen in 25 years? They'll be talking about Atlanta 4.0 because just like the first two iterations, the third one would have some mild success at the beginning and then go back to partially filled arenas at low ticket prices where the viewership is less than 20k (it was 13k in their final year) but hey, it's growing. There's an untapped market. Top whatever media market in the US.

How some of these people make money I have no idea. Actually I do. They sucker people into buying things on hopes and prayers and sell before they start tanking.

 

[tucker3434]

Growth. Market size. Potential. So basically selling things on a hope and a prayer because that's all this is. There is zero evidence to show that this would be successful. How many teams viewership numbers would you have to add up to surpass even the lowest of the Canadian markets (170 000 from 2021 numbers)?

And these teams you'd be adding up are well established teams in major ish markets. I'm guessing between 3 - 5.

You want to know what's going to happen in 25 years? They'll be talking about Atlanta 4.0 because just like the first two iterations, the third one would have some mild success at the beginning and then go back to partially filled arenas at low ticket prices where the viewership is less than 20k (it was 13k in their final year) but hey, it's growing. There's an untapped market. Top whatever media market in the US.

How some of these people make money I have no idea. Actually I do. They sucker people into buying things on hopes and prayers and sell before they start tanking.

This is how business works. Set a goal and then figure out how to achieve it. There’s no reason the NHL’s long term goal shouldn’t be the NBA. They play in the same arenas, the same number of days. The NBA makes way more money because of the media deal. Canada’s NHL tv deal is pretty good but Canada isn’t big enough, nor do they have the growth potential, to ever catch the NBA. They need to grow the American media market. Adding more Winnipegs isn’t going to do it.

 

[Tawnos]

This is how business works. Set a goal and then figure out how to achieve it. There’s no reason the NHL’s long term goal shouldn’t be the NBA. They play in the same arenas, the same number of days. The NBA makes way more money because of the media deal. Canada’s NHL tv deal is pretty good but Canada isn’t big enough, nor do they have the growth potential, to ever catch the NBA. They need to grow the American media market. Adding more Winnipegs isn’t going to do it.

Yeah. The key with all of this is that there’s still room for strong growth in the American market. The only areas to expand to in Canada probably give you some growth, but it’s weak (QC) to middling (southern Ontario) because of existing penetration.

There are no guarantees, but the potential growth in Atlanta, Houston, or SLC is much stronger. Are they risks? Sure, but risk is where the money is.

 

[LPHabsFan]

This is how business works. Set a goal and then figure out how to achieve it. There’s no reason the NHL’s long term goal shouldn’t be the NBA. They play in the same arenas, the same number of days. The NBA makes way more money because of the media deal. Canada’s NHL tv deal is pretty good but Canada isn’t big enough, nor do they have the growth potential, to ever catch the NBA. They need to grow the American media market. Adding more Winnipegs isn’t going to do it.

Yeah. The key with all of this is that there’s still room for strong growth in the American market. The only areas to expand to in Canada probably give you some growth, but it’s weak (QC) to middling (southern Ontario) because of existing penetration.

There are no guarantees, but the potential growth in Atlanta, Houston, or SLC is much stronger. Are they risks? Sure, but risk is where the money is.

So basically the exact same premise and belief that's been used for the past 30 years. Got it.

How much of the revenue growth since then has been a result of the southern expansion teams? How's the NHL's market penetration in California? Florida? Texas? Arizona? I mean those are massive markets that have experienced growth over the past 25 - 30 years and adding them should have surely made the US TV deals just skyrocket right?

Thing is, I actually have no problem with any of those markets save for a couple of the obvious ones that are just massive jokes. I'm also not entirely advocating for more teams in Canada. What I am advocating against is stupidly putting franchises in markets that have no real potential and expectation for success outside of the vaunted market size and "growth".

For all the talk about business, people seem to much rather put money towards having the potential for and ultimately not reaching potential customers than having actual customers.