Marc Ganis
Marc Ganis
adding build cost expensive extra fact gets larger last less number offset operating seats sell
When you're adding those extra 5,000 seats, you have to build more ramps, more bathrooms, more plumbing, and it gets very expensive to build those extra seats. The number of times you sell the last 4,000 to 5,000 seats and the fact that they're going to be the less expensive seats, does not offset the cost of operating a larger facility.
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The primary reason you're seeing more self funding is that the easy deals with the local governments are pretty much done. We don't have local government budget surpluses any more. It takes more creative financing.
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When was the last time somebody cheered for T-bill interest rates? But you cheer when your team is on the court, so there is a lot to be said for the psychic value of owning a sports team.
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The NBA was very fortunate to have three stars like that back to back. That wasn't planned, it was an alignment of the planets.
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The teams in smaller markets, like Jacksonville and Cincinnati, got their stadiums first. Then it was the big markets' turn -- Boston, Houston, Philadelphia, and soon New York and Dallas. The disparities between markets have become magnified.
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This actually puts hockey on more news pages, not necessarily in the way you want it, but it still is a cover story. Wayne Gretzky and his beautiful wife are good art, and that always attracts attention.
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I suspect you would see a handful of clubs that can pay more and would pay more. But you would also see a lot of clubs not spending $100 million, like they now do.
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It is more difficult to get public funds for sports facilities. State and local budgets are strained, services are being cut, taxes are being raised.
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On a marketing level it's been a real drawback for the NBA to have all these freshmen and high school players in the league.