Virginia Beach Arena, and Sacramento Kings the latestAugust 25th, 2012 at 12:16 am by Bruce Rader under News, Personalities, Sports, Uncategorized
Tuesday is building up to be a big day in Virginia Beach, as two of the largest entertainment companies in the world pitch the city to build a new Arena with the possible guarantee of bringing to the beach an NBA team as the building’s anchor tenant.
It is now official, Peter Luukoo, the president and CEO of Comcast-Spectacor along with Michael Evans, president Live Nation Arenas and Wilson Howard, president of Live Nation’s southeast division have crunched the numbers and are ready to convince the City Council that Virginia Beach can make more than enough money to pay off the debt if the city builds an 18-thousand seat arena near the city’s Convention Center.
And to sweeten the pot, Beach Mayor Will Sessoms told me Thursday Comcast reportedly made a deal with a “major league sports team” to sign a 25 year lease and become the building’s main tenant. Although no specific team has been named, the consensus is that team is the Sacramento Kings of the NBA. Unhappy in Sacramento, the Kings have explored moving to several different markets and it’s believed team co-owner Joe Maloof has already visited the beach.
Of course neither the Kings nor the NBA will comment on the report, the Kings moving to Virginia Beach would depend on if the city builds the arena. It would seem silly for them to comment on a deal that hasn’t even been presented to the council. That is not how big business works, and this is big business.
So why would the Kings want to move to Virginia Beach?
The answer is Comcast, the $100 billion dollar entertainment giant that owns a huge cable company, the Philadelphia Flyers, the Wells Fargo Arena in Philly, and NBC–one of the four largest TV networks in America.
Comcast also manages arenas, their smaller company Global Spectum runs the Constant Center at Old Dominion. They can promise the Kings a new arena, a market with no major league competition, and a television deal. The city builds the Arena, Comcast-Spectacor runs it, and the Kings sign a 25 year lease.
According to a story by Bob Fernandez in the Philadelphia Inquirer, Comcast and the Sacramento Kings would not be strangers. Comcast carries Kings games on its CSN California regional sports network. An NBA franchise in Virginia Beach could be shown on a separate Comcast-owned regional sports network, SportsNet Mid-Atlantic.
But the Sacramento Kings TV rights would not automatically transfer, an official said.
Hampton Roads, would not be the smallest NBA market. New Orleans, Memphis, and Oklahoma City are smaller, said sports consultant and former NBA executive Ed Desser.
The arena, built to NBA specifications would cost about $350 million; Virginia Beach with its high bond rating could easily get that money in a 25 year loan.
Live Nation, which also owns Ticketmaster, is the world’s biggest concert promoter and ticket seller, is losing money in financially strapped Europe, but is making big profits in Hampton Roads.
The Virginia Beach Amphitheater, which Live Nation manages, is one of the top 5 most profitable venues in the 112 Live Nation stable of venues. The company feels it can make even more money for itself and Virginia Beach if it can bring its big acts to a new arena 12 months a year. Among the acts Live Nation books include Eric Clapton, Radiohead, the Jonas Brothers, Kayne West and the Police. The company has a complete country music division led by Toby Keith, Tim McGraw, Brad Paisley and Rascal Flatts.
Although they will not comment until an arena is built, officials from the ACC and NCAA have made it known that both an ACC basketball tournament and NCAA Regional Tournaments would be good possibilities for a new arena.
But starting Tuesday comes the hard part.
Comcast and Live Nation have to convince a majority of the council that they can generate enough money with concerts and sporting events to play off the loan the city would have to borrow to build the arena.
Oklahoma City went another route–adding one penny to the sales tax for five years paid for their new arena which is the home of the Oklahoma Thunder.
Virginia Beach would borrow most of the money for the project, but I would assume they would at least ask for some financial help from the companies involved and the state. Gov. Bob McDonnell has already endorsed the concept, and his office recently gave Redskins owner Daniel Snyder more than six million dollars to keep the team from moving their headquarters to Washington, DC. Income tax from just a team of NBA players alone would provide Virginia with almost $1.5 million dollars a year. Not to mention coaches, and other staff members. Plus the Governor would love to have an NBA team in the Commonwealth.
After Tuesday’s presentation the council will have about 2 months to make a decision–right around election time.
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