DA's Morning Tip
Morning Tip Mailbag: Your questions on two similar players, arena revenue and more
Also, what I'm feelin' and not feelin' this week
A Benz or a Beemer? From Yale Reardon:
Who would most GM’s rather have for the next 10 years…Wiggins or Booker? Their ages, stats, and reputations as offense only players are nearly identical.
I wouldn’t call them spot on twins, Yale, but some of their numbers and averages at their respective points in their careers are reasonably close:
Andrew Wiggins Devin Booker
Age/Exp 22/3 20/2
Pts/Gm 20.4 22.1
FG% .450 .423
3P% .329 .354
PER 15.7 13.4
Off Rtg 105 103
Def Rtg 114 114
USG% 29.0 26.2
But, it’s a good question. They are similar in how they are viewed by most around the league — offense-dominant players who can play either the two or three, but who also have to improve at the other end of the floor before they can be considered all-league talents. So, to try and answer your question, I polled a dozen GMs around the league, none of whom are in Minnesota or Phoenix, obviously. Most that responded weaseled out and said both or either, but of those with a preference, Booker won decisively.
Said one GM: “Booker… not even close. Better scorer — game means more to him — stylistically fits today’s game better — can be a #1 option.”
Said another: “Booker. Never been convinced of Andrew’s desire to compete. Hesitant to trust after he dropped Bill (Duffy, Wiggins’s former agent) in the manner/timing he did.”
And, a third: “Booker. More driven & passionate on a consistent basis.”
Wiggins did have some support from one GM: “Close call. Probably Wiggins because he can play and defend multiple positions.”
The (actual) cost of doing business. From Ethan Austin:
As you know the City of Seattle is pushing a remodel of Key Arena w/ OVG /Tim Leiweke instead of Chris Hansen’s proposed Arena designed for the NBA.
How many current owners play in an arena owned by a 3rd party shared with NHL, WNBA, etc? How many are happy? Do owners prefer their own arena?
Going in reverse order of your questions: every owner prefers to own his or her building and keep all the revenues from all the events, including when their teams play, that take place there. But that’s not the case everywhere, obviously; each city negotiates deals in its best interests, which often include wanting a piece of the economic action in the arena if it’s going to lay out hundreds of millions of dollars of taxpayer money to help build the thing in the first place. Most of the time, though, that’s not the way it works out, which is why you have websites like Field of Schemes that have argued for more than a decade that cities and/or counties and states are getting ripped off when they make nine-figure commitments to arena and stadium construction, no matter how benevolent the owner/owners appear to be.
As you no doubt know by now, the 30 NBA teams split the national television contract money from ESPN, ABC and TNT (Turner Sports, again, runs this website) evenly, along with other non-local deals. Teams keep the money from their local TV deals to themselves, which explains much of the huge financial disparity between, say, the Lakers, who are getting $3 billion for their local TV rights, and the Grizzlies and Pelicans, who get a fraction of that. Even enhanced revenue sharing hasn’t been able to close the gap between teams that make money and lose money.
NBA teams have a mix of public-private partnerships when it comes to building arenas, but in most (not all) cases, the team keeps the lion’s share of revenues generated in their buildings, whether or not they come from the team playing or from concerts or other events. In some cases, they do split money with NHL tenants who also play in the building. Increasingly, new arenas are built with the hope of driving revenue not just in the building, but throughout nearby areas that are redeveloped as well as the new arena goes up.
In alphabetical order:
Atlanta: Philips Arena is owned by the city’s Atlanta Fulton County Recreation Authority. The NHL’s Thrashers played in Philips from 1999 through 2011, when they moved to Winnipeg to become the second iteration of the Jets in that city. (The Atlanta-Journal Constitution has reported that the Hawks’ ownership group is negotiating to buy and develop several parcels of land near Philips while the city pays $142.5 million of the $192.5 million cost of renovating Philips; the team would play in Philips until 2046.)
Boston: TD Garden is owned by Delaware North — a concessions conglomerate controlled by the Jacobs family, which owns the NHL’s Boston Bruins. The Celtics, though, amended their lease with the Garden a few years ago to expand their revenue producing capabilities in the building.
Brooklyn: Mikhail Prokhorov’s Onexim Sports and Entertainment owns both Barclays Center and the Nets.
Charlotte: Spectrum Center is owned by the city and operated by the Hornets’ parent company, Hornets Sports and Entertainment. It was constructed in 2005 and fully financed publicly through two bond issues. There’s no other pro sports tenant left in the building after the WNBA’s Sting ceased operations.
Chicago: United Center is co-owned by Bulls’ chairman Jerry Reinsdorf and Blackhawks owner Rocky Wirtz; it was almost all privately financed, though the two teams got significant tax relief from the city as part of the agreement to build the stadium. The two primary tenants operate the building through the United Center Joint Venture.
Cleveland: Along with the Cleveland Monsters of the American Hockey League, the Cavaliers play in Quicken Loans Arena, which is owned by the Gateway Economic Development Corporation of Greater Cleveland; that entity also owns Progressive Field, just feet from the Q, where the Indians play. Gateway leases those facilities to the two pro teams. The Cavs and the city of Cleveland are splitting the costs of a $140 million renovation of the arena that began this month.
Dallas: American Airlines Center is owned by the city, and operated jointly by the Mavericks and the NHL’s Stars, who both play in the building.
Denver: Billionaire Stan Kroenke owns Pepsi Center, the Nuggets and the NHL’s Colorado Avalanche, which both play in his building, along with the regional sports network that covers them.
Detroit: The city’s Detroit Downtown Development Authority technically owns the new Little Caesar’s Arena, where the Pistons and the NHl’s Red Wings will begin play this fall. The Red Wings, owned by the Ilitch family (which also runs Little Caesar’s Pizza, which has the arena’s naming rights), will be the primary tenant in the building, meaning the Wings will get first dibs on arena dates. And the Ilitches have control of almost all of the land surrounding the building, which they plan to develop into District Detroit — a 50-city block long mix of businesses and residences that will bolster the local economy and remake a whole swath of the city. (It is a project that has not been without its controversies.)
Golden State: Oracle Arena is owned by the Oakland-Alameda County Coliseum Authority. The Warriors are the building’s only pro sports tenant. The entertainment behemoth AEG operates both Oracle and the Oakland-Alameda County Coliseum next door, where the NFL’s Raiders and Major League Baseball’s Oakland A’s play; AEG books events and runs the game operations for the Warriors and Raiders in their respective buildings. The Warriors, famously, are financing their own $1 billion arena, Chase Center, in downtown San Francisco, which is currently scheduled to open in 2019.
Houston: The Rockets’ Toyota Center, like the Astros’ Minute Maid Park and the Texans’ NRG Stadium, is owned by the Harris County-Houston Sports Authority. The Rockets receive all revenues from the arena and all but five percent of revenues from the arena’s naming rights.
Indiana: Bankers Life Fieldhouse is owned by Indianapolis’ Central Improvement Board. The city leases the arena to the Pacers for $1 per year; the team keeps all revenue and non-game revenue. Indianapolis also is paying $160 million in improvements and upkeep to the building, an agreement which will keep the team in Indy through at least 2024.
LA Clippers/Lakers: AEG owns and operates Staples Center, which is a money-making behemoth. In 2015, the arena generated $100 million in revenue just from the money produced by its premium ticket sales for Lakers, Clippers and the NHL’s Kings’ games. (The WNBA’s Sparks also play at Staples; they are owned by Guggenheim Partners, which also owns the Dodgers.) AEG owns the Kings and about a quarter of the Lakers, with the Buss Family owning the controlling interest. The Kings get first crack at available dates, followed by the Lakers and Clippers. The building, per the Hollywood Reporter, generates an estimated $345 million annually in revenues.
Memphis: FedEx Forum is technically owned by the city, which spent $250 million in public bonds to finance construction of the arena, which opened in 2004. But the Grizzlies operate FedEx and keep all the revenue from both their games and non-NBA events; the city’s ownership is only tied to the ultimate repaying of the bonds, most of which are supposed to be finished by 2029.
Miami: American Airlines Arena is owned by the city’s Miami Sports and Entertainment Authority, but is operated by Basketball Properties Limited, a company owned by Heat owner Micky Arison. The team and city have a complex revenue sharing arrangement. The Heat privately financed the construction of the building, which opened in 1999; in return, it pays no rent to the city and also receives an annual subsidy. A deal in which the team is supposed to split profits with the city above $14 million in revenues annually has been the subject of significant controversy in recent years.
Milwaukee: The Bucks’ current and former owners and local and state governments in Wisconsin are splitting the costs of the estimated $524 million Wisconsin Entertainment and Sports Center that will open in 2018. The Bucks and Marquette University’s men’s basketball team will play there. The Bucks will receive all revenues from both the new building and a nearby plaza that are being built. The deal will keep the Bucks in Milwaukee for at least 30 years.
Minnesota: The city has owned the Timberwolves’ arena since 1995, with AEG operating the venue since 2007 and getting a substantial chunk of revenues from both Timberwolves and Lynx games. An approximate $138 million renovation of the building is underway, with the city spending $74 million, Timberwolves and Lynx owner Glen Taylor spending $58 million and AEG spending $6 million.
New Orleans: The Pelicans’ Smoothie King Center is owned by the state of Louisiana and is operated by SMG, the arena management giant that runs dozens of buildings around the country, including the Thunder’s Chesapeake Energy Arena in Oklahoma City. SMG, which also runs the Mercedes Benz Superdome that houses the NFL’s Saints, gets a base fee from the Louisiana Stadium and Exposition District, the state entity that owns the arena, as well as additional fees from non-NBA and NFL events at Smoothie King and the Superdome.
New York: Madison Square Garden is owned by Knicks owner Jim Dolan’s Madison Square Garden Company, the umbrella for MSG Sports, which runs both the Knicks and the NHL’s Rangers, along with the WNBA’s Liberty. Forbes ranks the Knicks as the NBA’s most profitable team, netting a NBA franchise record $141 million in 2015-16. The business magazine lists the team’s current worth at $3.3 billion.
Oklahoma City: Chesapeake Energy Arena is owned by the city and run by SMG (see above). The arena was publicly funded via a one-cent sales tax approved by voters in 1993 in what was locally called MAPS (Metropolitan Area Projects). During the initial six years of the one-cent tax MAPS raised more than $300 million for projects including the Bricktown Canal, the Bricktown Ballpark and the city’s convention center. The Thunder’s Arena cost $87.7 million and was completed in 2002; the team is the main tenant and currently the only pro sports team that plays there. As with the Pelicans, SMG gets a cut of arena revenues.
Orlando: Amway Center, built in 2010 for $480 million (the Magic paid $50 million toward the construction costs and pays $1 million in rent annually) is owned by the city; the only other pro sports team that plays there other than the Magic is the ECHL’s Orlando Solar Bears, possessors of the greatest logo in all of sports; the Magic bought the Solar Bears in in May. The team gets all ticket revenue from its games; the city takes the revenue from non-Magic events. The city and team split the estimated $40 million in naming rights from Amway. In addition to the normal revenue drivers, the Magic and some other teams are producing additional revenue through the use of in-house apps at the arena and other proximity marketing tools that have bumped up both ticket sales and other merchandise fans can purchase using the team app in the arena. The Magic also have a patch deal with Disney that will begin this season. Yet the Magic were still one of the NBA’s teams that reportedly lost money last season.
Philadelphia: Wells Fargo Center is owned and operated by Comcast Spectacor, which also owns the NHL’s Flyers, who play in the building with the 76ers. (The Arena Football League’s Philadelphia Soul also plays there.) The 76ers, owned by a group led by billionaire Josh Harris, are tenants in Wells Fargo Center since Comcast sold the team to Harris’s group in 2011. They get revenue from their games; when Comcast owned the team it also got a piece of all of the money generated by the arena. The Sixers’ current deal to play at Wells Fargo runs through 2029.
Phoenix: Talking Stick Resort Arena is owned by the city; the Suns run the building, which also houses the WNBA’s Mercury, also owned by Suns owner Robert Sarver. The Suns control the revenue in the building but are looking for a new arena in the near future to replace Talking Stick, one of the league’s older buildings (constructed in 1992).
Portland: Moda Center is owned by Blazers owner Paul Allen and run by AEG. The Blazers are the only game in Moda, with a loyal and passionate fanbase, and other than the very successful Timbers of Major League Soccer, the landscape is free of any other significant competition for the sports dollar. Yet the Blazers still reportedly lost money last season, although their losses were mitigated by league revenue sharing.
Sacramento: The Kings’ new Golden 1 Center, which opened last year, wound up costing $534 million to build. Financing was a public-private partnership, with the city (which owns the building) paying $255 million and the team paying the rest — including the $27 million in new costs after the building’s initial $507 million price tag rose. The Kings keep all the revenue from their games, though they have to pay the city an annual $6.5 million fee and grant the city up to nine events per year at Golden 1 whose revenues go either back to the city or a non-profit. The Kings ownership group led by Vivek Ranadive reportedly took less from the NBA’s revenue sharing program, and phased out their cut altogether once Golden 1 opened — as a concession to the league’s owners to approve their purchase of the team in 2013. The naming rights deal with Golden 1 for $120 million over 20 years is one of the more lucrative ones in the league.
San Antonio: AT&T Center is owned by the county (Bexar) in which the building resides just outside of downtown. The Spurs, the WNBA’s Stars and the American Hockey League’s San Antonio Rampage play there. The Spurs get the lion’s share of the revenue from the building, including from the Stars and Rampage, both of which the team owns, and all of the $41 million naming rights agreement with AT&T. The team has a profit sharing deal with Bexar County, though as with other cities, there’s some dispute about the arrangement.
Toronto: Air Canada Centre — soon to be renamed Scotiabank Centre after that financial company’s massive 20-year naming rights deal that begins next year — is owned by Maple Leaf Sports and Entertainment, which owns the Raptors and the NHL’s Maple Leafs, as well as their respective regional sports networks.
Utah: Vivint Smart Home Arena is owned by the estate of the Jazz’s late owner, Larry Miller; a family trust currently owns the team. The Jazz are completing a $125 million renovation of the building that will include extensive wi-fi throughout the arena for the first time — which will, of course, create additional revenue streams for the team during games.
Washington: Verizon Center — also changing names, to Capital One Arena after a reported 10-year, $100 million naming rights deal with the bank was completed last month — is owned by Monumental Sports and Entertainment, the multimedia company of Wizards and Capitals owner Ted Leonsis. Leonsis has also added an Arena League football team that played its first season in Capital One this year, as well as an esports franchise. Yet the onerous $36 million annual mortgage on the building has kept both the Caps and Wizards from being profitable.
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BY THE NUMBERS
16 — NBA teams with a patch agreement for this season, after the Lakers announced last week their partnership with Wish, a mobile shopping app. The three-year deal reportedly will pay the Lakers between $12 and $14 million per year; only Golden State’s $20 million per year deal with Japanese e-commerce company Rakuten is more lucrative among the patch agreements reached so far.
139 — Days, as of this morning, of the $125 million renovation of Vivint Arena in Salt Lake City, which will officially conclude Tuesday when the building is re-opened to the public. The renovation includes new seats throughout the arena, as well as an expanded “Fan Zone” where people can watch the game with one another or on TV.
— Vivint Arena (@vivintarena) August 24, 2017
51 — Former basketball players inducted into the University of Kentucky’s Hall of Fame, with Wizards guard John Wall joining the group in ceremonies Saturday night. Wall thanked his mother and, as you would expect, was a little emotional about it.
I’M FEELIN’ …
1) Camps are open. The best words I’ve heard in a long time.
2) Down for both of these rules changes, especially the so-called “Harden Rule,” because so many guys were starting to do it when they saw how successful the Beard was at drawing the three free throws. As I said all of last season — it’s a foul. It just shouldn’t be a shooting foul, the same way the Duncan/Durant ripthrough move was ultimately determined not to be a shooting foul. Same thing.
3) Kudos to the Nets for making Sarah Kustok their primary analyst for their game broadcasts this season, making her the first woman to hold that role for an NBA team. (Our friend Mike Fratello, who previous held the role, will now be in studio on YES Network’s broadcasts.) Kustok, who played 118 games at DePaul from 2000 through 2004, is still seventh on the school’s all-time list in 3-point percentage. After her playing days she was an assistant coach for the Blue Demons. In other words, she has the same knowledge and experience playing and coaching the game as any guy.
4) Yes, you will get everyone’s attention by having training camp in San Diego, Tom Thibodeau. Yes, you will. (Boss? I have this great feature idea on Karl-Anthony Towns I’ve been thinking about…)
1) I don’t doubt that, on paper, several NBA teams lost money last season. But, I also don’t doubt that it took about four seconds for Leslie Alexander to find a buyer for his Rockets, at the not-inconsequential sum of $2.2 billion, and that there were a half-dozen other people and/or businesses that were lined up if Tilman Fertitta hadn’t made the deal. Three things are true about the current NBA: a) even with an enhanced revenue sharing system, some teams still can’t compete financially with the Lakers and Warriors and Knicks because of their enormous advantages in local media and/or in-arena marketing and sponsorship deals; b) that doesn’t in the least deter potential owners or ownership groups from wanting to buy in, no matter the market or whether the team in which they’re curious is winning or losing at the moment; c) b>a.
2) Glad to hear Russell Westbrook’s PRP injection wasn’t in his right knee, which has already undergone an arthroscopy and two other procedures. But any work on either W’Brook knee is not good and worth monitoring.
3) With all the natural (and man made) disasters befitting us at the moment, it’s easy to forget that there are millions of people who need help, desperately, after the slew of hurricanes in the last four weeks. Former Wolves GM Milt Newton, a native of the U.S. Virgin Islands, is trying to raise money and supplies for his homeland through his Emerald Gems Foundation; here is how you can help. And Mavericks guard and Puerto Rico native J.J. Barea has set up a YouCaring page for his home; much of the island remains without any electricity at all.
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