Phoenix LXXII: Send in the Clowns
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02-25-2013, 09:26 PM
Join Date: Feb 2010
Originally Posted by
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.
Ya, its messy, built in dysfunctional. An NHL (or NBA, whatever) franchise needs all of those revenue streams themselves, as their anchor tenant may or may not be a bit of a lost leader, up's & downs, winning & losing, cyclical, and certainly in this case, mandatory. Concert & event bookings, sponsorship & advertising revenues, concessions, merchandising sales, parking, the whole 9 yards.
Even then its complex. Witness what previous COO of St. Louis Dave Checketts did in signing a 20yr concessions contract for the Scottrade Centre with Levy Foods. Received $10M up-front, in his jeans, but on the back-end for 20yrs, low margin returns from Levy that are in fact punitive and well short of the mark that one should expect. Whether or not Towerbrook Financial, Checketts majority partner got a piece of that I know not, but I doubt it. Parking as well, the main parking garage next to Scottrade is city owned, the team receiving nothing on that front.
So even with a well established club, a busy building, critical that all engines pistons are firing in sync, revenue streams maximized. This is why St.Louis went so cheaply, app $120M plus some assumption of debt. Revenue streams wiped out by previous ownership & management, monies taken off the table. You start divvying up an Arena Management Contract, same thing. Its just basic, Sports Ownership 101. That it would even be entertained or suggested shows an appalling lack of understanding, intelligence.
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