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Harris: Prudential Center more important financial piece than NJ Devils (Bloomberg)

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09-16-2013, 05:55 PM
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LadyStanley
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Harris: Prudential Center more important financial piece than NJ Devils (Bloomberg)

http://www.bloomberg.com/news/2013-0...han-team.html?

Quote:
Apollo Global Management LLC (APO) co-founder Josh Harris said Newark’s Prudential Center was a more important financial piece in his purchase of the New Jersey Devils than the hockey team itself.
...
“And we think that with the new capital structure and the new ownership group and the new management that we put in, that we’ll be able to make this arena really realize its potential financially,” Harris said in a Bloomberg Television interview.
...
Harris said he viewed the Prudential Center as complementary to New York City’s two main arenas, Madison Square Garden in Manhattan and the Barclays Center in Brooklyn. The home of the NBA’s New York Knicks and NHL’s New York Rangers, the Garden is completing a $1 billion private renovation. The $1 billion Barclays Center, home of the NBA’s Brooklyn Nets, opened last year.
The Rock: 4th highest grossing arena of US per O'Neill

Harris plans on increasing # of concerts and special events, which should alleviate not having a second anchor tenant.

$200m in bonds used to fund arena, guaranteed by airport and marine-terminal revenue.

Harris not expecting high level of ROI (compared to other investments); perhaps 1-20%.

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09-16-2013, 06:01 PM
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Just found this quote interesting.

Quote:
He [Harris] said he’d like to see returns from 1 percent to 20 percent, without getting more specific.

“These are the kinds of things that appreciate over a long, long period of time -- generations,” he said. “I get to have fun, earn a decent return and hopefully make some money in the process and help the community as well.”

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09-16-2013, 06:07 PM
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One of the main reasons why Devils fans were never worried about moving..

and like many said in the relevant threads, Prudential Center has been doing pretty good despite what some others may like to say about it..

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09-16-2013, 06:10 PM
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Don't jump on me, but this sounds like the Florida model-the hockey team is but a small part of it-the arena itself and the events/concerts/attractions gets more of the attention.

I am NOT in ANY WAY making the suggestion of viability of the hockey team-that is not the point I am making-it's the "Hockey is one small part of the overall "entertainment" concept, very similar to Florida Panther set up.

Which is fine, just interesting to see another example of how arenas are more and more fulfilling the "entertainment complex" idea of marketing.

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09-16-2013, 06:13 PM
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Quote:
Originally Posted by Tinalera View Post
Don't jump on me, but this sounds like the Florida model-the hockey team is but a small part of it-the arena itself and the events/concerts/attractions gets more of the attention.

I am NOT in ANY WAY making the suggestion of viability of the hockey team-that is not the point I am making-it's the "Hockey is one small part of the overall "entertainment" concept, very similar to Florida Panther set up.

Which is fine, just interesting to see another example of how arenas are more and more fulfilling the "entertainment complex" idea of marketing.
I don't think its a small part.. but it isn't the bigger part of the two.

It's also NY vs. FL so you can imagine how much more valuable arena rights are.

Rangers are the same way.. do you think the Rangers themselves are more valuable than MSG? Islanders and Barclays as well. It's more of a NY market type of thing than anything else.

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09-16-2013, 06:17 PM
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Quote:
Originally Posted by DevilChuk View Post
I don't think its a small part.. but it isn't the bigger part of the two.

It's also NY vs. FL so you can imagine how much more valuable arena rights are.

Rangers are the same way.. do you think the Rangers themselves are more valuable than MSG? Islanders and Barclays as well. It's more of a NY market type of thing than anything else.
Yea, my wording was bad-didn't mean to imply "small" as it were with NJ-guess I was just trying to (in my own awkward way) get the idea out about how the business of "hockey arenas" has been evolving into "entertainment centers"

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09-16-2013, 06:18 PM
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Quote:
Originally Posted by Tinalera View Post
Yea, my wording was bad-didn't mean to imply "small" as it were with NJ-guess I was just trying to (in my own awkward way) get the idea out about how the business of "hockey arenas" has been evolving into "entertainment centers"
I think based on the market, hockey arenas are almost automatically entertainment centers.

Put MSG in another market and it may not be an entertainment center.. take any other arena and put it where MSG is and it will be an entertainment center, etc.

I mean, at best.. you have 44 dates + playoffs. Unless you have multiple anchor tenants, sports isn't going to be the most common booking.

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09-16-2013, 06:44 PM
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Quote:
Originally Posted by DevilChuk View Post
I think based on the market, hockey arenas are almost automatically entertainment centers.

Put MSG in another market and it may not be an entertainment center.. take any other arena and put it where MSG is and it will be an entertainment center, etc.

I mean, at best.. you have 44 dates + playoffs. Unless you have multiple anchor tenants, sports isn't going to be the most common booking.
Just usually the most high profile.

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09-16-2013, 06:45 PM
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Originally Posted by Riptide View Post
Just usually the most high profile.
Playoffs, maybe.. but in this area, you get a lot of high profile acts that easily generate more hype than hockey at least.

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09-16-2013, 11:00 PM
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Quote:
Originally Posted by Tinalera View Post
Don't jump on me, but this sounds like the Florida model-the hockey team is but a small part of it-the arena itself and the events/concerts/attractions gets more of the attention.

I am NOT in ANY WAY making the suggestion of viability of the hockey team-that is not the point I am making-it's the "Hockey is one small part of the overall "entertainment" concept, very similar to Florida Panther set up.

Which is fine, just interesting to see another example of how arenas are more and more fulfilling the "entertainment complex" idea of marketing.

The Atlanta model turned out to be a situation where the arena operator could make more money for nonhockey events than reserving those 45 dates for the team.

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09-17-2013, 12:25 AM
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Quote:
Originally Posted by Fugu View Post
The Atlanta model turned out to be a situation where the arena operator could make more money for nonhockey events than reserving those 45 dates for the team.
Out of curiosity I looked at the event schedule for Philips Arena this season. Ignoring the anchor-tenant NBA team the event schedule looks like.

Sep: 6 days (24 empty days) - (3 WNBA games, 3 days of Sesame Street Live)
Oct: 8 days (20 empty days) - (3 concerts, 5 days of Disney)
Nov: 7 days (15 empty days) - (3 concerts, WWE and 3 days of a minor college bball tourney)
Dec: 6 days (17 empty days) - (6 concerts)
Jan: 0 days (25 empty days)
Feb: 6 days (16 empty days) - (6 days of Ringling Bros)
Mar: 1 day (23 empty days) - (1 concert)
Apr: 0 days (25 empty days)

In total 34 days of non-NBA/non-hockey events booked at the arena over the course of the pro season. I'm not going to try to go look up past years but I'll hazard a guess the number of nonhockey events hasn't increased at the arena now that the Thrashers are gone. Or if it has increased then only by a very small amount.

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09-17-2013, 12:36 AM
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Quote:
Originally Posted by mouser View Post
Out of curiosity I looked at the event schedule for Philips Arena this season. Ignoring the anchor-tenant NBA team the event schedule looks like.

Sep: 6 days (24 empty days) - (3 WNBA games, 3 days of Sesame Street Live)
Oct: 8 days (20 empty days) - (3 concerts, 5 days of Disney)
Nov: 7 days (15 empty days) - (3 concerts, WWE and 3 days of a minor college bball tourney)
Dec: 6 days (17 empty days) - (6 concerts)
Jan: 0 days (25 empty days)
Feb: 6 days (16 empty days) - (6 days of Ringling Bros)
Mar: 1 day (23 empty days) - (1 concert)
Apr: 0 days (25 empty days)

In total 34 days of non-NBA/non-hockey events booked at the arena over the course of the pro season. I'm not going to try to go look up past years but I'll hazard a guess the number of nonhockey events hasn't increased at the arena now that the Thrashers are gone. Or if it has increased then only by a very small amount.

What would your conclusion be? Ownership loses less money without the second anchor tenant even if the dates remain open?

If so, then really even a few more dates are better than having the hockey team. ??

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09-17-2013, 12:46 AM
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it implies that the thrashers were losing money every year, and that having no games is more profitable than having a thrashers game.

without looking up the actual schedule, i'm sure the quality of the days available also plays into it. A marquee event on a friday-saturday night makes a lot more money than one on a monday/tuesday night, and i'm sure the thrashers took up a lot of the prime nights, both from the hawks and from alternate events.

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09-17-2013, 12:48 AM
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Originally Posted by danishh View Post
it implies that the thrashers were losing money every year, and that having no games is more profitable than having a thrashers game.

Yes, pretty much.


I remember during our discussions on the pending Devils sale that Harris's side intimated they wanted to get into the greater NYC arena market. The comments here would support that being the driver behind the decision to purchase the Devils.

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09-17-2013, 12:56 AM
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About the Thrashers though, if another owners owned and paid rent why does Atlanta Spirit care?

And I cant imagine Hawks are making money neither.

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09-17-2013, 01:02 AM
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Quote:
Originally Posted by krnboy1009 View Post
About the Thrashers though, if another owners owned and paid rent why does Atlanta Spirit care?

And I cant imagine Hawks are making money neither.
who in their right mind would have bought the thrashers without buying the arena too? Not only would you be losing money every year, you'd be paying rent for the right to lose money.

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09-17-2013, 01:03 AM
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Quote:
Originally Posted by krnboy1009 View Post
About the Thrashers though, if another owners owned and paid rent why does Atlanta Spirit care?

And I cant imagine Hawks are making money neither.

Another owner couldn't be found. With no revenue from other arena events, and purely paying rent to ASG, there was little chance a different owner could come up with a viable model. The models that work have an owner who makes at least enough on the hockey team to not lose his shirt, and then pockets the rest of the arena revenue.

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09-17-2013, 01:17 AM
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Quote:
Originally Posted by krnboy1009 View Post
About the Thrashers though, if another owners owned and paid rent why does Atlanta Spirit care?

And I cant imagine Hawks are making money neither.
Because they'd have to operate. And also lose lucrative weekend dates. I can't imagine the per date breakdown of a lease is *that* much for the holder, especially if no one is showing up to spend money on the products they offer inside of the building.

Quote:
Originally Posted by Fugu View Post
Another owner couldn't be found. With no revenue from other arena events, and purely paying rent to ASG, there was little chance a different owner could come up with a viable model. The models that work have an owner who makes at least enough on the hockey team to not lose his shirt, and then pockets the rest of the arena revenue.
Well, I'm not sure that an owner couldn't be found, the lease holder just didn't want any part of it.

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09-17-2013, 01:27 AM
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Then charge rent as they see fit, not hard.

I am pretty sure there were ownership group willing to keep them in Atlanta, I read there was one with Tom Glavine in it.

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09-17-2013, 01:47 AM
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Quote:
Originally Posted by krnboy1009 View Post
Then charge rent as they see fit, not hard.

I am pretty sure there were ownership group willing to keep them in Atlanta, I read there was one with Tom Glavine in it.
If there was, I don't think the NHL would have shipped them out so fast... Everything I remember reading at the time, was that Sprint wanted them out of the arena, and that an owner couldn't be found who would keep them there.

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09-17-2013, 01:51 AM
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Eh, I guess. Shame though.

Again i cant imagine Hawks being that much more profitable. Ratings for them arent that good and the arena is as empty if not more so.

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09-17-2013, 02:22 AM
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Originally Posted by Riptide View Post
If there was, I don't think the NHL would have shipped them out so fast... Everything I remember reading at the time, was that Sprint wanted them out of the arena, and that an owner couldn't be found who would keep them there.
The NHL had no recourse, the only way to keep them in Atlanta would have been to book them in another building. Atlanta Spirit wasn't goofing around, they threw them out of the building

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09-17-2013, 07:40 AM
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Let's see this discussion moved back to Harris/Prudential Center please.

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09-17-2013, 08:26 AM
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Eh, I guess. Shame though.

Again i cant imagine Hawks being that much more profitable. Ratings for them arent that good and the arena is as empty if not more so.
The NBA has a better national TV deal, so bad attendance/regional TV ratings weren't hurting them as much as it would the Thrashers, plus you still need one anchor tenant so people know your venue exists. An anchor tenant, besides filling dates, means your arena gets mentioned on TV and that there are a subset of people who go there regularly, meaning awareness levels are very high. In a large city like Atlanta, this is important. This isn't a small city where everyone knows where "THE arena" is.

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09-17-2013, 09:02 AM
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Originally Posted by krnboy1009 View Post
Again i cant imagine Hawks being that much more profitable. Ratings for them arent that good and the arena is as empty if not more so.
Quote:
Originally Posted by MartysBetterThanYou View Post
The NBA has a better national TV deal, so bad attendance/regional TV ratings weren't hurting them as much as it would the Thrashers,
Winner.

A lot of NBA teams draw flies, but it doesn't matter due to the national TV rights.

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