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02-25-2013, 08:51 PM
  #457
XX
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Join Date: Dec 2002
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Quote:
Originally Posted by aqib View Post
So I suppose AEG owns every team in every arena it manages? Same with Global Spectrum I guess? How about Aramark and Deleware North who seem to run the concession stands at half the sports venues in the country? Do they book the shows and own the teams too?
AEG is a subcontractor on most leases. Rather than furnish a staff and manage the arena, they (the lessee or facility owner) contract that out to a provider who can do it all. Suffice to say, most do not have the experience or network that operators like AEG do, so there's motivation for this outsourcing to happen. AEG and others like them can then skim healthy agreed upon profit margins from the operations of buildings they neither own nor lease.

Quote:
Originally Posted by aqib View Post
Their have been a whole lot of hairbrained schemes here. Putting a hockey team in this market, building a second arena in a suburb in the West Valley, writting $25 million checks, agreeing to a $320 million management contract, etc but finding different ways to cut losses on an arena is not one of them
Great operations are streamlined. There's nothing smooth or easy about 4 different contracts. The city will 'save' money by not agreeing to a ridiculous AMF subsidy, but they would be handing the arena over to a bunch of surefire morons. No legitimate potential partner would agree to such a structure. This is why it is not commonplace. Economies of scale, integration and all that jazz.

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