The timeline is 3 years. Brooklyn's advantage over Queens, Suffolk, a renovated NVMC, etc.?
It exists.
BTW, we shouldn't ignore Bettman in all of this. If he in his heart of hearts decides Brooklyn is where the Isles should be, and that the Brooklyn Islanders would be good for the NHL, then a couple thousand seats isn't going to stop it. And the deal Wang gets might not matter either, b/c he might not be the owner in Brooklyn.
It clearly exists. But the blind will never see that.
The timeline is 3 years. Brooklyn's advantage over Queens, Suffolk, a renovated NVMC, etc.?
It exists.
BTW, we shouldn't ignore Bettman in all of this. If he in his heart of hearts decides Brooklyn is where the Isles should be, and that the Brooklyn Islanders would be good for the NHL, then a couple thousand seats isn't going to stop it. And the deal Wang gets might not matter either, b/c he might not be the owner in Brooklyn.
Bingo. W/O getting into arguments over revenue streams or whatnot. A given is that Brooklyn will have an arena. Queens and Suffolk will not. While a new or renovated Coliseum is still but a dream. So as of this moment, it seems that it would be Brooklyn or out of state. Unless a miracle happens in Nassau or Queens come through.
Imagine if the original Gehry design was used for Barclays, it was supposed to house a full-sized NHL with no capacity issues. I think if that had been done this would be a done deal now.
If you're Ratner, you're doing whatever you can to make sure your billion dollar outer borough arena is the only game in town... and any sort of noise coming from Queens is something you need to quash. As it stands, Barclays looks poised to steal events from the Rock and the NVMC because it has that NYC allure and can position itself as a viable alternative to MSG for big acts and shows. An arena in Queens is a major threat on that front. Additionally, I think Wang would run into trouble in Queens and even Suffolk... in the former he'd have to face questions about why the city needs a third arena and in the latter he'd be likely to face a fair amount of NIMBYism, no?
All I know is that Botta seems to think Brooklyn is a really legit option... and from my perspective he seems like a guy in the know (though you guys would all know better than me). Is it perfect? No. Is it long term? Probably not. But it's there.
This is true -- along with Ratner, I'm sure that Jim Dolan wouldn't be thrilled to see a new arena going up and adding additional competition for MSG.
Most importantly though, there is just no space for another arena project in New York as long as Mike Bloomberg is mayor. Getting the Barclays Center built was a massive headache. The city got ripped off big time on the Yankee Stadium/Citi Field deal. If you think that he's going to spend the last years of his administration fighting austerity minded politicians over yet another sports project then you're crazy.
Something will eventually be built at Willets Point, but I'd be shocked if it happens before 2015.
Typically right on cue from the guy who supports business practices from the place that's BANKRUPT.
Your foolish assumptions reach new highs in low. It's already been said to you don't ASSUME Wang or any buyer gets a bad deal and you ignore that ASSUMING Wang would get a limited deal touting nassu's and Queens deals when at present they don't have viable arenas post 2015. And you're not capable of thinkiing of anything but being a tenant with no options. Priceless.
Other options like Ratner giving luxury box revenue, real estate buy in portions part ownership, anything to get what he wants to knock out LI's and Queens competition are possibilities but only astute people see that. The kind that think that seats can't be added isn't final. Too funny.
You can't even fathom media buy time points system based on increased attention, advertising rates from real banks not Bethpage credit union, Ratner sharing ad rates, higher tix prices because of fewer seats, big corporations not named king kullen buying luxury boxes Ratner could share and so many opiions that would go over you because your views are "limited".
Gee the Mets corp support has them top 5 in payroll, revenue and value. Wang's current all encompassing nassau lease has NYI last in revenue, payroll and worth 50 million less than he paid. Damn right I'd never go into business with you.
Since NYI hardly ever draw more than 14K they'll do fine. If it ever grows then extra seats or the Fenway Park principle could work. Once again, thanks for the laughs.
"Hi, I'm Bruce Ratner. I want your awful team really badly, so here's 25% of my billion dollar arena and all my luxury box revenue. Want my kids? They can sew."
Bingo. W/O getting into arguments over revenue streams or whatnot. A given is that Brooklyn will have an arena. Queens and Suffolk will not. While a new or renovated Coliseum is still but a dream. So as of this moment, it seems that it would be Brooklyn or out of state. Unless a miracle happens in Nassau or Queens come through.
.
This was my point. How foolish is it to assume otherwise? Brooklyn or out of state. Seems like an easy choice to most.
Barclay's Center is a basketball arena, that can barely fit an official NHL sized rink.
Between Ratner (and his partners in the Forest City Ratner Enterprise), Prokhorov (with his controlling interests) and of course Jay-Z ,the Barclay Center has all the investors they need.
With the arena due to to open in several months, the people already involved can start making money. Again, after they did all the work, put up all the investment capital and are now due to start collecting on their investment, they are going to let Wang buy his way in? Highly unlikely. If Prokhorov or Ratner did allow Wang in on a sizable portion of Barclays Center (which isn't even adequate for hockey), it would cost Wang the kind of money he would be better off spending in Nassau. Because in Nassau, he can get a lease agreement where he OWNS the whole thing and keeps profits on ALL events, advertising, parking, etc.. Despite Wangs or TOH's public demeanor, they still have 3 more years to nail this out. The Penguins arena deal if everyone can recall, also went to the last minute.
Also, a refurbished or brand new Nassau Coliseum can and will be very profitable for Wang. Both Brooklyn and Long Island have enough residents for high profile concerts to consider both.
Barclay's Center is a basketball arena, that can barely fit an official NHL sized rink.
Between Ratner (and his partners in the Forest City Ratner Enterprise), Prokhorov (with his controlling interests) and of course Jay-Z ,the Barclay Center has all the investors they need.
With the arena due to to open in several months, the people already involved can start making money. Again, after they did all the work, put up all the investment capital and are now due to start collecting on their investment, they are going to let Wang buy his way in? Highly unlikely. If Prokhorov or Ratner did allow Wang in on a sizable portion of Barclays Center (which isn't even adequate for hockey), it would cost Wang the kind of money he would be better off spending in Nassau. Because in Nassau, he can get a lease agreement where he OWNS the whole thing and keeps profits on ALL events, advertising, parking, etc.. Despite Wangs or TOH's public demeanor, they still have 3 more years to nail this out. The Penguins arena deal if everyone can recall, also went to the last minute.
Also, a refurbished or brand new Nassau Coliseum can and will be very profitable for Wang. Both Brooklyn and Long Island have enough residents for high profile concerts to consider both.
1. Actually he pays rent since it is owned by Nassau County. The sweet deal Wang has may not last after 2015. If the Coliseum is not replaced, then it will lose its appeal as the time goes on.
2. Depends on how the new arena in Nassau is funded. If it is 100% privately financed, it is a GUARANTEED money loser.
1. Actually he pays rent since it is owned by Nassau County. The sweet deal Wang has may not last after 2015. If the Coliseum is not replaced, then it will lose its appeal as the time goes on.
2. Depends on how the new arena in Nassau is funded. If it is 100% privately financed, it is a GUARANTEED money loser.
If Wang gets CLOSE to that deal, it's a win. And the rent is a pittance.
If the deal is privately financed, if it's $300M, that's a guaranteed loser? It's a written off expense on his income for years, and the whole point of the new arena was to generate more money, correct?
So....if it makes the arena do $100M more in business every year, the Isles make NHL average or better in revenue, that means they go from $30M to $40M in gate, sell more concessions, more parking, SELL BETTER ADVERTISING, all things we're pining for a new arena.
So.....if there's $30-40M more every year, that's ten years to recoup the investment. That's solid.
If Wang gets CLOSE to that deal, it's a win. And the rent is a pittance.
If the deal is privately financed, if it's $300M, that's a guaranteed loser? It's a written off expense on his income for years, and the whole point of the new arena was to generate more money, correct?
So....if it makes the arena do $100M more in business every year, the Isles make NHL average or better in revenue, that means they go from $30M to $40M in gate, sell more concessions, more parking, SELL BETTER ADVERTISING, all things we're pining for a new arena.
So.....if there's $30-40M more every year, that's ten years to recoup the investment. That's solid.
And, apparently, a guaranteed money loser?
If it wasn't a money loser, Wang would have done it already.
4% is the average rate of inflation, so I decided to use that as the discount rate.
Finally, as mentioned earlier, $320 million is the cost of the renovation.
With that little background, here we go:
Discount Rate: 4%
Life of Project: 30 years
Initial Investment: -$320 (in millions, of course)
Income, Years 1-10: $12.80 (using the Vancouver figure)
NPV: -$216.18
In other words, asking Charles Wang to privately finance his hockey arena would result in a net loss of over $200 million. I realize nobody is going to feel sorry for a man as rich as Mr. Wang, but none of us would take that deal.
Public Money
Things get far more interesting when you look at using public money for the facility. Sports economist Andrew Zimbalist, who was gracious enough to answer a few questions for this blog back in May, pointed out that the average public share of a stadium/arena is 65%. For fun, I took a look at what would happen if that same $320 million renovation was financed with the average public share:
Discount Rate: 4%
Life of Project: 30 years
Initial Investment: -$112 (35% of $320 million)
Income, Years 1-10: $12.80 (using the Vancouver figure)
NPV: -$8.18
It's still a net loss of $8 million. However, look at what happens when you use Prof. Zimbalist's previous study that said the average public share was 75%:
Discount Rate: 4%
Life of Project: 30 years
Initial Investment: -$80 (25% of $320 million)
Income, Years 1-10: $12.80 (using the Vancouver figure)
NPV: $23.82
Stand-alone arenas can be built for a situation such as the Islanders', in which the arena has one major tenant and competes for regional events with Madison Square Garden and the Prudential Center, only if taxpayers foot the bill.
A privately funded new arena will cost around 350 M, so the math won't change much. It still loses money.
$12.8M made for the Vancouver Canuck organization. That, in accordance with NHL figures, includes, what, ticket sales, merchandising, brand, cable revenues?
What does Orca make on arena revenues outside, concessions, parking and all other revenues from arena operations ON TOP of the $12.8M?
say it's only $10M profit. That's $22.8M?
That's the SAME OWNERSHIP.
$22.8M in 1-10 (using 2015 dollars)
30 years
-$320M
NPV = -$92M
Breakeven in year 14. (inflation drops it likely to 11 years to reach that total)
on a 30 year lease, using 2015 dollars, 16 years means the investment nets you what on that figure? $365M.
A money losing situation, clearly.
Now, of course, taxes play a role after the recouping of investment capital, and inflation plays a role.....but to say it isn't worth the investment is just folly.
Wang's $320M doesn't have to be used. Cut the extras and make it work. This was the LHP figure? You CANNOT tell me the building couldn't be done for $200M without the extra rinks, the high arching roof deco and all.
Now...if the taxpayers funds it, the expectation is the CONTINUANCE and INCREASE of TAXABLE GOODS REMAINING IN THE COUNTY COFFERS.
A closed Coliseum yields $0.00 in taxable goods and services.
A fully operational Coliseum, if it meant $200M in direct and indirect income for the immediate region yields WHAT in County, local and state taxes? What would convince you that the taxpayer does not benefit from 8.625% of that each year for 30 years? (that's 17.25 million dollars for those folks at home EVERY YEAR for 30 years)
It's funny, but really sad, that this thread has evolved into a "I can prove more about how arena financing works" piss off contest then an actual discussion about how the Isles might actually stay in New York.
