Sacramento Arena term sheet thoughts…

Everyone should know by now that a prerequisite to Seattle getting an NHL team is getting an NBA team. Hence the focus on the Sacramento Kings situation. As you may or may not know, Kevin Johnson announced that he had come to terms on a new arena deal with prospective owners of the Sacramento Kings. The prospective owners are a backup option, shouldBGFEHO_CQAAT-xm the NBA reject the Hansen/Ballmer deal.

The term sheet will need to be approved by the Sacramento City Council tomorrow, March 26th so that KJ can give notice to the NBA Board of Governors who will be meeting on April 3rd in New York City in what will be a plea to reject the Hansen bid in favor of keeping the team in Sacramento. If the NBA BOG rejects the Hansen/Ballmer deal, the desire will be for the Maloofs to sell the Kings to this backup ownership group of Ron Burkle, Mark Mastrov, and Vivek Ranadive.

I expect nothing less than a rubber stamp on this thing tomorrow as the Sacramento City Council seems to be going with whatever the mayor puts together, with only a few skeptics. This is a Non-binding agreement so if there are any city council members that really oppose the public money being offered up in this term sheet, they can object to it later. Objecting now would be bad PR for the representative considering there is still a good chance the Seattle Deal goes through. How Sacramento decides to fund this proposal is entirely up to them. I am not a tax payer or a voter in the Sacramento area so how the people decide view this proposal is entirely up to them. If you want one perspective, try checking out the Field of Schemes assessment. Usually the comments section provides some good incite but the visibility of this thing has brought out the best the internet has to offer (sarcasm).

People in Seattle still see to think the odds are in their favor and all of this was expected. People in Sac are feeling very confident right now so hard for me to get an accurate read one way or another.

Seems like Michael McCann is giving the nod to Seattle

but acknowledges that it isn’t as clear as it looked several weeks ago:

@northwestsports @wyatt_goodtimes But fact that arena deal from SAC appears to be so generous could mean they keep team. Could be worth it.

— Michael McCann (@McCannSportsLaw) March 26, 2013

On a more local note, regardless what happens here, I am thankful for the Seattle City Council and King County Council’s due diligence to the SoDo Proposal. Our process took 9 months and they gathered public opinion and had several reviews of the proposal. I saw several financial reviews scrutinizing a lot of the assumptions in the Hansen plan. It was frustrating at times but in the end very enlightening to the process. Given the magnitude of the proposal it makes sense to be careful and thorough when evaluating the proposal.

Couple more comments and some questions I don’t have the answers to:

  1. There is still a threat of a potential lawsuit by political watchdog group in Sacramento that the term sheet violates gifting policy.
  2. Will the NBA view this non-binding deal as good enough to cover the arena plan for Sacramento?
  3. Does the BMR deal for the actual team need to match the Hansen deal? I believe the answer is yes but I don’t know if it will.
  4. What kind of leverage will the NBA/Sacramento have on forcing the Maloofs to sell to the Burkle, Mastrov and Ranadive should the BOG reject the pending sale of the Kings to Hansen/Ballmer?
  5. Could the Hansen/Ballmer offer go higher and what are the impacts?

Realignment, Quebec City and SoDo Arena Renders

What a day! NHL approves realignment, Sonics ticket priority list went on sale & then the team at SonicsArena post the arena renderings with a rink.BFV09hKCcAENK0_

I want to focus on the NHL realignment. Yes, yes, things look good for Seattle for expansion with the lopsided divisions but I don’t think the league would tip their hand so obviously. I just wonder how else they could have set it up without fueling that kind of speculation. Gary Bettman had a press conference today that triggered this article out of the Phoenix Business Journal. One side note, Mike Sunnucks track record of reporting on the Coyotes situation has not been strong but usually it is over indexed in favor of the team staying (i.e. citing sources that Jamison had the money). This article is very consistent with what a lot of us have been theorizing. The Coyotes will more than likely move in the middle of the night once the season is over very similar to how the Thrashers/Jets left Atlanta. Their attendance has not really improved as noted here. I am not rooting for them to leave & just think the league really has given up trying to find a viable owner.

I believe Quebec City has a good shot at getting the Coyotes next year but they have some challenges:

  1. Exposure to the Canadian and US Dollar exchange rate. Canada has benefited greatly from an exchange rate at par but it was only ten years ago that the NHL had a Canadian Assistance Program in place to assist with the Currency discrepancy between the CAD & USD. Think of this as a rev share program for 4 of the 6 Canadian NHL QuebecCityteams (Habs and Leafs were the only ones that did not qualify). Everything looks outstanding in Canada right now but if the exchange rate starts to creep back to levels of 10 to 15 years ago, the smaller markets like Winnipeg, Edmonton and potentially Quebec City could start to feel a little finance challenge. I am no currency exchange rate predictor but I am sure the League needs to consider their exposure here before just moving a team that will probably sell out every game.
  2. Canada’s ability to support an expansion team better than a new market (i.e. Seattle, Kansas City, Portland etc). Elliotte Friedman from Hockey Night in Canada originally reported this as a possible NHL strategy as well putting it rather bluntly, Canadian fans will support a team regardless how poor they perform on the ice. That sounds really harsh but look at the Leafs & Oilers over the last 5 years. (This should be thought of as a compliment to Canadian fans…you guys are super passionate and it is very very respectable).

I am pegging the chances of the Coyotes moving to Quebec City somewhere in the 50% range. They have the building & a solid temp building to house the team. They also have an potential owner in Pierre Karl Peladeau, CEO of Quebecor who is kind of assumed to be the Owner of the Quebec City franchise. Which leads us to this announcement of the day: Peladeau steps down as Quebecor head. It could be coincidental but could also mean he is spending more time trying to land the Coyotes coming to Quebec City. There are no guarantees here with so many moving parts and to quote Friedman, if the NBAKings deal gets approved, Seattle is in play.

A couple quick notes on the Arena renders:
I received some great messages on Twitter and Facebook today saying how excited people got when they saw the ice in the arena. It’s like it became very real for a lot of people. Yes there were some obvious things missing like player benches, penalty boxes, Blue lines & no apparent Zamboni location. Relax, these are super early renders & the fact that they release these renders on the day they are taking the Sonics ticket priority list should speak volumes on how much Hockey is part of the dialogue. We have a great partner, let SonicsArena know how much you appreciate hockey being part of the dialogue.

HockeyView_SonicLevel3

Credit: SonicsArena.com

NHL Attendance Numbers for 2013

Numbers are current through the end of February. (This is a complete replica of what I posted on 3rdlinegrind.com but people keep clicking here for attendance date)

Inspired by MIT Sloan Sports Analytics Conference, I have updated my Year over Year NHL attendance figures. I am going to make this short and sweet.

  • League attendance is up 3.4%
  • 4 teams saw a decline in attendance but two of them (Leafs & Rangers) are due to configuration changes in their arenas over the off season

NHL Team Attendance End of Feb

  • 4 teams saw growth over 20% (Hurricanes, Devils, Coyotes and Dallas)
  • Dallas is seeing a 70% increase
  • Nashville Predators have sold out every game this season.
  • That makes 18 of the 30 teams that have sold out every game

more attendance

For the heck of it I thought I would break out the Coyotes attendance since there appears to be a lot of sensativity about them right now:

Coyotes Attendance 2013 compare

As always, let me know your thoughts and if you want to see any specifics.