Potential Atlanta NHL Expansion Team Thread

[Tawnos]

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.

The NHL’s market penetration in those places you mentioned is exactly what you want to see.

Here’s the comparison I look at:

A) NHL reach in growth markets + NHL reach in underserved markets with “actual customers”

vs

B) Serving those markets with “actual customers” + having virtually no presence in those growth markets

Scenario A sees the NHL with far more customers than Scenario B does.

The most recent NHL TV contract ensured that every team in the league was profitable last year. It did skyrocket, though admittedly it was in comparison to the cheap deal they were on before.

There’s no such thing as a major market with “no real potential”

 

[Tawnos]

Also, I don’t think anyone claims you can just put a team in a place and expect it to be an automatic success. It takes work.

 

[aqib]

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.

Convention Centers don't make money. Other than Sheldon Adelson's convention center in Vegas, convention centers are government owned. The government hopes to make the money back from taxes generated by tourism.

Yes Vegas has several arenas without sports teams. TMobile was built with no guarantee a team was coming. Vegas is a unique beast. North Atlana suburbs are not the same.

At $1 billion the debt service on the arena will be over $70 million per year. So you have to cover that on top of all the operating expenses. Also, thinking that there are no expenses for days an arena stays dark is not logical. RFK Stadium cost $2 million in maintenance and $1.5 million in utilities after all the teams left.

 

[sh724]

Convention Centers don't make money. Other than Sheldon Adelson's convention center in Vegas, convention centers are government owned. The government hopes to make the money back from taxes generated by tourism.

Yes Vegas has several arenas without sports teams. TMobile was built with no guarantee a team was coming. Vegas is a unique beast. North Atlana suburbs are not the same.

At $1 billion the debt service on the arena will be over $70 million per year. So you have to cover that on top of all the operating expenses. Also, thinking that there are no expenses for days an arena stays dark is not logical. RFK Stadium cost $2 million in maintenance and $1.5 million in utilities after all the teams left.

Adelson died over 2 years ago...

Not all convention centers are government owned, many hotels (and other venues) across the country have convention spaces

 

[aqib]

Adelson died over 2 years ago...

Not all convention centers are government owned, many hotels (and other venues) across the country have convention spaces

The fact that Adelson is dead, doesn't change the fact that he built the first privately owned and financed convention center. While lots of hotels have meeting facilities, generally the bigger convention centers are government owned/financed.

 

[sneakytitz]

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.

One of the Commissioner's in Forsyth has already said it will be privately funded.

 

[Yukon Joe]

One of the Commissioner's in Forsyth has already said it will be privately funded.

Just look at the Tempe, Arizona arena though. It's also being privately funded - but the City is giving up valuable development and tax rights.

 

[sh724]

Just look at the Tempe, Arizona arena though. It's also being privately funded - but the City is giving up valuable development and tax rights.

The city is giving up a landfill/dump that is going to costs 10s of millions of dollars to clean up before any development can be done.

The 'tax rights' that are being 'given up' is a normal operating procedure for every govenment across the country.

 

[Yukon Joe]

The city is giving up a landfill/dump that is going to costs 10s of millions of dollars to clean up before any development can be done.

The 'tax rights' that are being 'given up' is a normal operating procedure for every govenment across the country.

Yes I'm well aware of that.. There are certainly some reasons why Tempe would agree to this deal. And there may be reasons why local government here might also sign on.

But just remember that even though a developer says something will be "privately funded" doesn't mean that local government doesn't have some associated costs as well.

 

[sh724]

The fact that Adelson is dead, doesn't change the fact that he built the first privately owned and financed convention center. While lots of hotels have meeting facilities, generally the bigger convention centers are government owned/financed.

I highly doubt it was the first but im not doing the research into it. What is fact is that you are wrong in stating outside of that one "all convention centers are govenment owned" which you are now backtracking on.

You are also wrong about convention centers not making money as many do. While they generally do not and its not their primary purpose the statement "convention centers do not make money" is false.

Yes I'm well aware of that.. There are certainly some reasons why Tempe would agree to this deal. And there may be reasons why local government here might also sign on.

But just remember that even though a developer says something will be "privately funded" doesn't mean that local government doesn't have some associated costs as well.

There are indirect costs with any development regardless of what that is. An individual buying a plot of land and building a house on it will have indirect costs to whatever jurisdiction it is located in. The only way to not have indirect costs is to not exist.

 

[sneakytitz]

Just look at the Tempe, Arizona arena though. It's also being privately funded - but the City is giving up valuable development and tax rights.

Neat.

Well anyways, Krause bought the land and the current construction to add lanes and exits around the land were approved 9 years ago.

We're about an hour away from the work session and the Commissioner presenting it to the rest of the Board is the one that said it was going to be privately funded. I'm sure we're about to learn a lot more.

 

[MMC]

 

[sneakytitz]

Recap from the presentation:

- A LOT more renderings released and a few videos
- Will be tied into the Big Creek Greenway
- A sizable Class A tower/office building part of the plan
- Renderings of arena aren't final plan/vision - focused on acoustics/amenities/guest comfort which may cause changes
- Want to host anything entertainment related, including Broadway acts, and will configure arena to fit.
- Aiming for 100+ events a year with the arena, including graduations, e-sports, festivals, conventions/expos
- Anticipate 20,000 construction jobs, 12,000 full time jobs once complete
- 10 years from ground breaking to full project completion
- They have filed a DRI w/ Atlanta Regional Commission to move forward with the project
- 58% commercial, 42% residential
- Asking the Board to amend existing code/zonings related to the properties' original purpose

They're conducting a Q/A with the Board now.

 

[sneakytitz]

Q/A & Board Comments

- Project has been ongoing for about a year and included a good bit of county/departments in the discussion
- Not anticipating any public funds being used
- County not in a position to fund any sizable portion of costs anyways
- Project not asking for any considerations/asks from the county at this point - no incentives/abatement - other than amendments to existing code/zonings/verlay so they can move forward to the next step (discussions, further proposals, etc.)

 

[MMC]

 

[MMC]

 

[sneakytitz]

Q/A & Board Comments (Cont.)

- Board has asked for a follow up meeting on May 9 (Passes 4:0)
- Follow up meeting asking for more information/concrete numbers/timeline/further discussion
- Full analysis of project won't be completed for as many as 8 more weeks
- Will consider amendments, possibly vote on them, on May 9

 

[KevFu]

Convention Centers don't make money. Other than Sheldon Adelson's convention center in Vegas, convention centers are government owned. The government hopes to make the money back from taxes generated by tourism.

Yes Vegas has several arenas without sports teams. TMobile was built with no guarantee a team was coming. Vegas is a unique beast. North Atlana suburbs are not the same.

At $1 billion the debt service on the arena will be over $70 million per year. So you have to cover that on top of all the operating expenses. Also, thinking that there are no expenses for days an arena stays dark is not logical. RFK Stadium cost $2 million in maintenance and $1.5 million in utilities after all the teams left.

I'm not sure I follow your circular logic. What exactly are you trying to say?

Cause from what I can tell:

Cities don't need multiple large venues that cost Big League Sports money, because the big league sports sized ones that don't have big league sports can't possibly make money (even though it's only venues with Big League sports tenants that cost big league money).

Or the municipally owned venues can't make money because -- even though the Event Management industry is just totally huge and Congress has held hearings on what a massive monopoly people like Live Nation has -- they're owned by non-profit agencies?


All I'm hearing is someone grasping for straws because they don't want Atlanta to get another chance.

 

[aqib]

I'm not sure I follow your circular logic. What exactly are you trying to say?

Cause from what I can tell:

Cities don't need multiple large venues that cost Big League Sports money, because the big league sports sized ones that don't have big league sports can't possibly make money (even though it's only venues with Big League sports tenants that cost big league money).

Or the municipally owned venues can't make money because -- even though the Event Management industry is just totally huge and Congress has held hearings on what a massive monopoly people like Live Nation has -- they're owned by non-profit agencies?


All I'm hearing is someone grasping for straws because they don't want Atlanta to get another chance.

Ok read slowly. 1) most cities don't need multiple NBA and NHL caliber arenas. Its the reason why Kansas City converted Kemper Arena into a youth sports complex, Toronto turned Maple Leaf Gardens into a grocery store, Montreal turned the Forum into a movie theater, New Jersey shuttered the Maadowlands arena, etc. 2) Entirely privately financed arenas with no major league tenants don't make sense economically outside of a few select markets like Vegas. Its why the Markham Ontario arena didn't go.
As far as this particular project goes, there is a reason why you a car dealer (see my previous disclaimer that I have nothing against car dealers, it is a perfectly fine way to make a living) and not big developers or seasoned arena operators like AEG backing it. We've all heard the stats about Atlanta, 8th largest metro area in the US, 3rd highest concentration of Fortune 500 companies etc. So why aren't there legitimate financial backer for this project?

If "All you're hearing is grasping for straws" its because that's what you WANT to hear.

 

[varsaku]

Ok read slowly. 1) most cities don't need multiple NBA and NHL caliber arenas. Its the reason why Kansas City converted Kemper Arena into a youth sports complex, Toronto turned Maple Leaf Gardens into a grocery store, Montreal turned the Forum into a movie theater, New Jersey shuttered the Maadowlands arena, etc. 2) Entirely privately financed arenas with no major league tenants don't make sense economically outside of a few select markets like Vegas. Its why the Markham Ontario arena didn't go.
As far as this particular project goes, there is a reason why you a car dealer (see my previous disclaimer that I have nothing against car dealers, it is a perfectly fine way to make a living) and not big developers or seasoned arena operators like AEG backing it. We've all heard the stats about Atlanta, 8th largest metro area in the US, 3rd highest concentration of Fortune 500 companies etc. So why aren't there legitimate financial backer for this project?

If "All you're hearing is grasping for straws" its because that's what you WANT to hear.

This is what i have trouble getting over. If Atlanta was that lucrative of a market for the NHL/owners in this county or others, we would have seen multiple proposals by now. It been 12 years since the thrashers failed and now only an investor group is coming forward with a proposal.

 

[MMC]

 

[MMC]

 

[sneakytitz]

Those roof top bars/restaurants are going to be fun. They've got them all over Atlanta but in south Forsyth, you'll just see forests 95% of the view. Nice break from the rest in town where it's just buildings.

Reading between the tea leaves here though, State Farm Arena hosts 175-200 events per year with at least 41 being Hawks games. The Gathering at South Forsyth has projections of 100+ events a year which means EITHER:

a) they're planning to snag a majority of what State Farm has with no supporting NHL team OR
b) create them out of the ether with no supporting NHL team OR
c) they're anticipating 41 dates being NHL related with the remaining being pulled from State Farm and created out of the ether.

A and B seem HIGHLY unlikely. I'm sure they'll host graduations and e-sports and festivals and all that jazz but that's not going to fill up more than a dozen of those dates, at most, and it won't be real money makers. To me that number, more than anything, means they're basing this entire project on getting an NHL team and that is a hell of a risk if you've only had preliminary talks. My impression from the presentation today was that they'd start building tomorrow if they could because they've been told Atlanta is next.

 

[blueandgoldguy]

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.

A lot of the NBA's revenue growth is actually linked to the popularity of basketball around the world and all the international sponsorships that entails. After soccer, basketball is the most popular international sport. It's something that the NHL is not capable of matching. American revenue is only part of the equation.

 

[AtlantaWhaler]

This is what i have trouble getting over. If Atlanta was that lucrative of a market for the NHL/owners in this county or others, we would have seen multiple proposals by now. It been 12 years since the thrashers failed and now only an investor group is coming forward with a proposal.

It takes a lot of time, work and up-front capital to even get a proposal off the ground. This one in particular has apparently been worked on for over a year and it's still in the beginning stages. Plus, they are typically kept in secret for a long time. This one, for example, has been planned for a year or two and we're just hearing about it now.

I work in commercial real estate and I've seen a ton of proposed developments die on the vine.