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Luxury box revenues?

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Old
11-18-2004, 03:01 PM
  #26
Tom_Benjamin
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Quote:
Originally Posted by triggrman
What about those areas owners that don't get suite revenue (if there are any) do you count that as a loss?
Pittsburgh and the Islanders don't have NHL rinks.

Quote:
Oh, and the property manager in me will not allow me to believe that suites are not arena revenue. Does hockey help sale suites in most areas, yes, but that doesn't change my stance, it's still arena revenue.
Then why don't people just go out and build rinks in places without sports franchises? They can make money with the luxury boxes and the board revenues, with the concessions and parking and restaurants and the ads on the scoreboard.

The fact of the matter is that without the sports franchises all these $200 million dollar entertainment centres are worth zip. They don't turn enough money to cover the power bill. The sports franchises drive the arena revenue.

Tom

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11-18-2004, 03:04 PM
  #27
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Quote:
Originally Posted by John Flyers Fan
I'm not saying that the hockey team is the only reason to buy a suite, and I don't think that all the money should go to the hockey team, but if there are no Nashville Predators

#1. is their a Gaylord Entertainment Center (hope that name is correct)

and

#2. how many people would still own a lusury suite if the Preds were contracted tomorrow ??? Are business spending $50K-100K a year for a luxury suite just for concerts, fairs etc. ???
I have to agree with you on #2, but hey, it is Nashville, so those luxury boxes are probably in high demand during greased-pig scramble week, especially on the night Dolly sings the anthem.

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Old
11-18-2004, 03:04 PM
  #28
triggrman
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The Nashville arena was funded in 1992 well before any sport team was coming to Nashville. It was funded for concerts, Fan Fair, etc. It just happened to help us get hockey 6 years later.

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11-18-2004, 03:06 PM
  #29
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Quote:
Originally Posted by Bring Back Bucky
I have to agree with you on #2, but hey, it is Nashville, so those luxury boxes are probably in high demand during greased-pig scramble week, especially on the night Dolly sings the anthem.
Oh, that was classic. You should go on the road, I bet one or two people might think you're funny.

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11-18-2004, 03:08 PM
  #30
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Originally Posted by thinkwild
Thats an interesting point. I wonder what the combined local tv revenues add up to, and what would be the effect of sharing it equally.

Like the NFL, the NHL does share its national TV revenues. But hockey also has local tv revenue which the NFL apparently doesnt really have. Perhaps if they made all local NHL broadcasts use NHL Centre Ice it would be national tv revenue they could share. Of course the group of owners who get a lot of non-hockey designated revenue advantage from their cable stations broadcasting the games would probably hate that.
What makes this even more difficult is that several teams are actually owned by the cable company (NYR & PHI). I have no idea what sort of arrangement those teams have for their local TV deals, but that is an area that would be very easy for teams to "hide" revenue.

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11-18-2004, 03:08 PM
  #31
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Quote:
Originally Posted by Tom_Benjamin
Pittsburgh and the Islanders don't have NHL rinks.



Then why don't people just go out and build rinks in places without sports franchises? They can make money with the luxury boxes and the board revenues, with the concessions and parking and restaurants and the ads on the scoreboard.

The fact of the matter is that without the sports franchises all these $200 million dollar entertainment centres are worth zip. They don't turn enough money to cover the power bill. The sports franchises drive the arena revenue.

Tom
Did you know that the Rangers used to play their home playoff dates on the road because they got kicked out of MSG for the circus???

Yes, sporting events are a large part of the viability of these super-complexes, I think it's as naive to think that the sports alone generate the dollars as to assume a complex could survive without a pro sports team. You can put more people in an arena for a concert than you can for a hockey game...

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11-18-2004, 03:10 PM
  #32
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Quote:
Originally Posted by triggrman
Oh, that was classic. You should go on the road, I bet one or two people might think you're funny.
I just might do that. I'm a fan of greased pig scrambles, perhaps I could come on right after Dolly.

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11-18-2004, 03:11 PM
  #33
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Quote:
Originally Posted by John Flyers Fan
I'm not saying that the hockey team is the only reason to buy a suite, and I don't think that all the money should go to the hockey team, but if there are no Nashville Predators

#1. is their a Gaylord Entertainment Center (hope that name is correct)

and

#2. how many people would still own a lusury suite if the Preds were contracted tomorrow ??? Are business spending $50K-100K a year for a luxury suite just for concerts, fairs etc. ???

#1, yes, as I stated the arena was planned well before the NHL considered Nashville (even before the Devils looked at relocating here in 1996)

#2 I think the suites would still sale but at a reduce price and probably would not be as many sold, you would take a hit.

Right now, suite sales are taking a hit period. Since 911, all toursim driven industries have taken a hit, Nashville is not exempt.

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11-18-2004, 03:12 PM
  #34
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Quote:
Originally Posted by Bring Back Bucky
I just might do that. I'm a fan of greased pig scrambles, perhaps I could come on right after Dolly.
Knock it off and stick to the topic.

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11-18-2004, 03:15 PM
  #35
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Quote:
Originally Posted by triggrman
#1, yes, as I stated the arena was planned well before the NHL considered Nashville (even before the Devils looked at relocating here in 1996)

#2 I think the suites would still sale but at a reduce price and probably would not be as many sold, you would take a hit.

Right now, suite sales are taking a hit period. Since 911, all toursim driven industries have taken a hit, Nashville is not exempt.

Presumably the boxes were there before hockey as well, and must have gotten use, correct?? In Halifax, where of course we never had major league sports, we have had a small-version of a great facility for 20plus years. The boxes came after pro hockey left, but they are popular for Junior hockey and lots of other entertainment, i.e. I imagine they are jammed when rasslin comes to town... They are largely about the hockey, but it's probably incorrect for some to suggest they have no other use..

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11-18-2004, 03:19 PM
  #36
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Quote:
Originally Posted by Bring Back Bucky
Presumably the boxes were there before hockey as well, and must have gotten use, correct?? In Halifax, where of course we never had major league sports, we have had a small-version of a great facility for 20plus years. The boxes came after pro hockey left, but they are popular for Junior hockey and lots of other entertainment, i.e. I imagine they are jammed when rasslin comes to town... They are largely about the hockey, but it's probably incorrect for some to suggest they have no other use..
I believe they did add more suites when the push for an NHL team started but the arena was designed so that up to 150 suites can be added, that design was made before then.

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11-18-2004, 03:34 PM
  #37
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It's really kind of meaningless to try and guess what revenues are hockey related and what revenues are not. The owners and the NHLPA at some point will have to both agree on teams of auditors that will scrutinize the books and try to arrive at correct formulas for each team. The same is true of expenses since the owners are basically saying that a certain percentage of revenues must be carved out to cover expenses. The players don't want to hear any of this because they simply want to be paid whatever the owners offer as in the existing CBA. To look at the books is a tacit admission on the players part that this a partnership of some sort.

They're so far apart right now. How can anything be negotiated when the revenues and expenses are not even close to being defined? And they won't be defined because that would be movement on the players part towards the owners position.

This is really a war. It comes down to the fact that one side is going to break. If it's the NHLPA then all the revenues and expenses will have to be defined and that will take some time. If the owners break than the only issue will probably be a luxury tax and only salaries have to really be defined. That's why I think eventually we may see a really steep luxury tax as a final compromise. Will the owners really want to open up their books fully so that every expense and revenue is seen by the NHLPA?

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Old
11-18-2004, 03:42 PM
  #38
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Quote:
Originally Posted by Tom_Benjamin
The fact of the matter is that without the sports franchises all these $200 million dollar entertainment centres are worth zip. They don't turn enough money to cover the power bill. The sports franchises drive the arena revenue.
I don't really buy this line of thinking.

Obviously a pro sport team can help justify the largest of arenas but that doesn't mean that with out a team these cities wouldn't have similar styled venues.

A quick count of hockey arena's in North America with seating of 10,000 or more comes to approx 88.

This also doesn't account for venues that are not set up for hockey but still qualify as a similar venue - such as strictly basketball arena's.

So to say that the only thing that makes these places - and by extension their luxury boxes - viable is the NHL teams (or top 4 pro sports) is flat out wrong.

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11-18-2004, 04:01 PM
  #39
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Quote:
Originally Posted by nferr
It's really kind of meaningless to try and guess what revenues are hockey related and what revenues are not. The owners and the NHLPA at some point will have to both agree on teams of auditors that will scrutinize the books and try to arrive at correct formulas for each team.
No they don't, according to the owners. The players are supposed to negotiate one formula that will apply to every team. That's the big sticking point. It isn't practical to find a formula for each team and keep changing it as the business changed. Any one formula will be wrong because one formula can't fit both Edmonton and New York.

Tom

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11-18-2004, 04:12 PM
  #40
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Quote:
Originally Posted by Tom_Benjamin
No they don't, according to the owners. The players are supposed to negotiate one formula that will apply to every team. That's the big sticking point. It isn't practical to find a formula for each team and keep changing it as the business changed. Any one formula will be wrong because one formula can't fit both Edmonton and New York.

Tom

And yet amazingly the NFL and NBA can find a suitable formula. I guess all their markets are identical.

No one is suggesting the formula will be perfect. You NEGOTIATE the terms. Then you look for and NEGOTIATE for inclusion of extra revenues or an increase in % of revenue as compensation for leaving controversial revenue streams out on an on-going basis. All the while you are taking huge chunks of the owners money for playing a game.

As the last CBA proved, the PA and smart agents can make a system that appears to favour the owners end up favouring the players. Cost certainty can work for the players to, if they would just show the intelligence to face the inevitable and work on getting the best terms possible.

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11-18-2004, 04:41 PM
  #41
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Originally Posted by copperandblue
I don't really buy this line of thinking.
So why hasn't somebody jumped at the chance to build a rink in Pittsburgh? There's a place with a tenant and nobody is stepping forward. You don't honestly believe the Rexall Centre could sell luxury boxes without the Oilers.

You don't honestly think Rexall would pay for the naming rights without the Oilers. General Motors forked over to name the rink in Vancouver GM Place because their name gets mentioned again and again on hockey broadcasts and in the newspapers. It is a great branding buy. They aren't interested without the hockey team.

Tom

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11-18-2004, 04:45 PM
  #42
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Quote:
Originally Posted by nferr
This is really a war. It comes down to the fact that one side is going to break. If it's the NHLPA then all the revenues and expenses will have to be defined and that will take some time. If the owners break than the only issue will probably be a luxury tax and only salaries have to really be defined. That's why I think eventually we may see a really steep luxury tax as a final compromise. Will the owners really want to open up their books fully so that every expense and revenue is seen by the NHLPA?
The fact that the NHL is insisting on cost certainty being a part of any agreement would have to mean that they are willing to open their books. I wouldn't expect the NHLPA to agree with any sort of cost certainty with the NHL with out going over all the books very thoroughly.

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11-18-2004, 04:58 PM
  #43
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Quote:
Originally Posted by Tom_Benjamin
Then why don't people just go out and build rinks in places without sports franchises? They can make money with the luxury boxes and the board revenues, with the concessions and parking and restaurants and the ads on the scoreboard.
They do. They're called Convention Centres.

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11-18-2004, 05:37 PM
  #44
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Originally Posted by Tom_Benjamin
So why hasn't somebody jumped at the chance to build a rink in Pittsburgh? There's a place with a tenant and nobody is stepping forward.
Different issue.

Wether it is a good arena or not is besides the point. The point that does apply is that they have one. In fact they have 2 indoor sport facilities that will hold 12,000 or more. Amazingly enough the Penguins only play out of one of them.

You suggested that pro franchises are what makes these places profitable, I am just pointing out that there are dozens upon dozens of these types of facilities that don't have a pro franchise (certainly not a top 4 pro franchise) and yet these cities have still built them.

Quote:
Originally Posted by Tom_Benjamin
You don't honestly believe the Rexall Centre could sell luxury boxes without the Oilers.
Nope not at all. However I do think that the sale price of the boxes would drop significantly if the only access it provided was to the Oiler games.

Therefore, like most people here, I think that the number of dates that the arena is used divided by the total cost of the suite, multiplied by 41 (plus any additional playoff/preseason dates that may be available) is perfectly fair.

Quote:
Originally Posted by Tom_Benjamin
You don't honestly think Rexall would pay for the naming rights without the Oilers. General Motors forked over to name the rink in Vancouver GM Place because their name gets mentioned again and again on hockey broadcasts and in the newspapers. It is a great branding buy. They aren't interested without the hockey team.
Actually I have no problem with arena naming rights being considered team revenue. In a place like Vancouver where only the Canucks play then 100%, in cities where there is NHL and NBA then 50/50 is reasonable and in cities like Calgary where they have the Flames, the Hitmen and the Roughnecks playing then divide it up by attendance percentages.

I find the naming rights a bit different simply because every time an article, interview, news story and so on mentions the arena - the vast majority of the time it is in association with the team that plays there. Therefore, I agree that 90% of the benefit to the company sponsoring the arena comes from the sport and as such it isn't a battle worth picking as far as where the other 10% of exposure comes from. It is simply a case of who all contributes (As mentioned in terms of the multi sport facilities).

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