Summary:
The Pitch's up and coming superstar writer Justin Kendall is the first area
journalist to step forward and point out that the new Sprint Center will open in
about a year and there is no hint of a basketball or hockey franchise moving to
KC. His "Emperor Has No Clothes" cover story (Sept. 7-13) is aptly titled
"We're Pucked."
We're Pucked
Seven big-league hockey and basketball
teams have rejected Kansas City. When the Sprint Center opens, will anyone love
us?
By Justin
Kendall
Millionaire sports-team owners treat Kansas City like a mistress. They flirt
with Kansas City. They call Kansas City's new arena pretty. They even tell
Kansas City that they'd consider leaving their home cities for her. But it's all
pillow talk. In the end, the owners get newer arenas, better leases and a
bigger chunk of arena revenues from their current homes. Kansas City gets left
with an empty arena.
Thirteen months from now, Kansas City's $276 million Sprint Center arena is
scheduled to open. It will anchor downtown's $850 million Power & Light
District. The city entered into a public-private partnership with Los Angeles'
Anschutz Entertainment Group, which will operate the arena. AEG is a
sports-industry goliath, with connections at the top of the NBA and the NHL.
The place will look like a giant, sparkling-glass radial tire. Inside, it's
being built to specs for pro hockey and basketball, with the hope of convincing
a team to change addresses.
Mayor Kay Barnes and AEG
officials have offered assurances that a major-league hockey or basketball team
will call the Sprint Center home by next fall. Barnes has even suggested that
Kansas City could lure both.
AEG President Tim Leiweke promises the arena won't
go empty. "I can assure you, there is going to be an anchor tenant," Leiweke
told The Kansas City Star in May 2004.
Meanwhile, the Star has printed these repeated promises without asking many
tough questions about them. Instead, the paper has trumpeted speculation about
what cities might be poached, including Seattle and Orlando, Florida.
In fact, none of the teams mentioned as possible Sprint Center tenants are still
publicly discussing hanging their jerseys in Kansas City.
Several factors have worked against Kansas City in its bid to land a team.
· Experts say Kansas Citians don't have enough income to support another
franchise.
· Neither the NHL nor the NBA appears interested in Kansas City.
· The competition is fierce, with cities such as Las Vegas and San Jose,
California, likely to outbid any offer from Kansas City.
· Most damning, no local millionaire or ownership group has expressed an
interest in buying a team, something crucial to landing a tenant in the Sprint
Center.
The reality may seem clear. But like victims of unrequited love, city leaders
and AEG officials have stubbornly refused to admit that they're growing
desperate. he story of how seven teams passed up Kansas City could foretell the
future of the quest for a Sprint Center tenant.
The responsibility for finding a team belongs to AEG. The city struck a deal
with AEG in July 2004 and hailed it as risk-free to taxpayers. AEG would cover
construction cost overruns and operating costs. The city reportedly had an in
with AEG; Herb Kohn, a senior partner at Bryan Cave, the law firm that helped
the city secure its contract with AEG, is a friend of the Leiweke family.
The first rumored possibility came in September 2004. Movie producer Howard
Baldwin talked about buying the NHL's Anaheim Ducks and moving the team to
Kansas City. However, the Walt Disney Company sold the Ducks in 2005 to an owner
who decided to keep the team in California.
Howard Schultz, owner of the NBA's Seattle Supersonics, threatened to move his
team in February. Schultz, who also is the chief executive officer of Starbucks,
put the Supersonics up for sale in April, and the Star suggested that the team
could be a tenant for the Sprint Center. But no Kansas Citian with deep pockets
stepped up to bid.
Instead, Oklahoma City businessman Clay Bennett bought the Supersonics and the
WNBA's Seattle Storm in July for $350 million. Bennett chairs a group trying to
lure pro basketball to Oklahoma City, but he has said he'll keep the team in
Seattle — if he gets a new arena. The Kansas City Supersonics is a bust.
The New Orleans Hornets basketball team also looked ready to move a year ago.
With that city's post-Hurricane Katrina economy wrecked and its population
slashed, the Hornets needed a new place to play.
The Hornets considered a temporary move to Kemper Arena but ultimately chose
Oklahoma City. But this summer, NBA Commissioner David Stern quashed any hope of
the New Orleans Hornets moving. He said the Hornets will return to New Orleans
for the full 2007-08 season. "It will happen," Stern told the Associated Press
in August.
Rumors that the NBA Kings — Kansas City's pro basketball team until 1985 — would
exit Sacramento, California, died in July. The team's owners and Sacramento
County officials agreed to put a measure on that county's November ballot asking
voters to approve a quarter-cent sales tax increase for a new arena. Even if
voters reject the plan, the Kings are unlikely to cruise out of California
because the team owns and operates Arco Arena.
In June, owner Paul Allen put the Portland Trailblazers on the market, leading
to talk that the team could move to Kansas City. But without explanation, Allen
took the for-sale sign down in August.
The Orlando Magic appeared to be a strong candidate. The team has a year-to-year
arena lease. The Star reported that Magic officials contacted Kansas City in
July 2005 about moving to the Sprint Center. But again, talk of a move to Kansas
City or elsewhere became nothing more than a bargaining chip to get local
officials to sweeten the pot to stay. Orlando Mayor Buddy Dyer announced in
August a $350 million plan for an entertainment complex that will include a new
arena for the Magic.
The team that seemed most likely to come to Kansas City appeared to be the NHL's
Pittsburgh Penguins. The team went up for sale in January, and prospective buyer
Sam Fingold suggested this May that he'd move the team here. Fingold, a
34-year-old Connecticut real estate developer, called Kansas City "one of the
most under-served sports markets" in the country. Fingold told the Star: "I
think Kansas City needs an NHL franchise, and I'd love to be the one to do it."
But Pittsburgh stepped up to keep the team. Isle of Capri has agreed to build a
$290 million arena if the Pennsylvania Gaming Control Board awards the casino
company a slots license. If that doesn't work, Pennsylvania Gov. Ed Rendell has
devised a plan to pay for the arena with bonds that could be paid off by the
Penguins in modest annual installments.
With those two offers on the table, getting the Penguins to Kansas City for next
year's opening of the Sprint Center would be virtually impossible. NHL rules
forbid a team from moving if there's a plan to stabilize a team in its current
city, and NHL Commissioner Gary Bettman has said he favors keeping the Penguins
in Pittsburgh.
On July 28, Fingold signed a letter of intent to purchase the Penguins for $175
million. At the same time, he backpedaled from his early interest in Kansas
City. "We agree with the current ownership group that the Penguins should remain
in Pittsburgh, and that a new arena is crucial to the team's long-term success,"
Fingold said in a statement released that night. "The Penguins are an important
part of Pittsburgh's sports landscape, and it is our objective to do everything
possible to secure their future here."
Last week, Fingold's deal to buy the Penguins appeared to be falling through,
according to several media reports in Pittsburgh. The Star buried the news in a
415-word article on page nine of the sports section.
Despite the clear setbacks, AEG and Kansas City officials still talk of the
Penguins and others as possibilities.
Kevin Gray, president of the Kansas City Sports Commission and Foundation, talks
of the "golden opportunity" Kansas City has to land the Penguins. "We definitely
respect the fact that the league wants to stay in Pittsburgh," Gray tells the
Pitch. "But our belief is that right now, if the league wants to be successful
and solidify a market, you can do that here right now."
The man offering more promises than anyone else, however, has been AEG's Leiweke.
Leiweke is a familiar face on the Kansas City sports scene. In the '80s, he was
general manager and later president of the Kansas City Comets, an indoor soccer
franchise that began with promise and kept crowds flowing into Kemper Arena.
Leiweke left the team in 1988 to work for the Minnesota Timberwolves NBA
franchise; three years later, the Comets fizzled out.
Leiweke talked about a major tenant for the Sprint Center even before voters in
August 2004 approved a hike in car-rental and hotel and motel fees to pay for
the new arena.
Early on, Leiweke said the only question would be whether the Sprint Center's
tenant would be a hockey team or a basketball team, according to the Star. He
continued his optimism in July 2004. "If you build a world-class facility and
create the economic streams for the franchise to thrive, you're going to get an
NBA and an NHL team here," he told the Star.
More than a year after those initial comments, Leiweke said in September 2005
that either an NHL or an NBA team would be in the Sprint Center "when you open
the doors," the Star reported. In November 2005, he played up the Penguins as a
possible tenant. "The Pittsburgh Penguins can be the Kansas City Penguins," he
told the Star, "no question about it."
Mayor Kay Barnes has kept up a cheery demeanor, remaining optimistic even as the
list of possible teams has dwindled. In July, Barnes told the Star: "I am
totally confident that AEG has been and will continue to do what is necessary to
secure a NBA or NHL team or both for the Sprint Center."
The key words were "or both." Adding both would put Kansas City in league with
the biggest sports markets — Los Angeles, New York, Boston, Philadelphia and
Chicago. But the city likely wouldn't be able to support teams in both leagues.
Barnes apparently wasn't aware of Kansas City's ranking as the No. 5 most
overextended sports market in the country.
American City Business Journals, the parent company of the Kansas City Business
Journal, analyzed 179 markets earlier this year to see if residents had enough
income to support pro sports teams. The study found that Kansas Citians can't
even support the teams already here. To support a hockey or a basketball team,
Kansas City would need another $100 billion in personal income. "There's a new
arena going up in Kansas City, inspiring brave talk about pursuing a franchise
in the NBA or NHL," according to the report. "But the hard truth is that the
city has already lost teams in both of those leagues."
The Star has provided a forum for Barnes and Leiweke to repeatedly stoke the
speculative fires and make more promises. And the Star's headlines over the past
two years have added to the rumors that several teams were Kansas City-bound.
The practice of reporting speculation hasn't let up, with the paper adding new
teams and dropping others from the list of potential tenants. In a February 2005
story, the Star added the Florida Panthers, the Nashville Predators and the
Carolina Hurricanes to its list.
In May 2005, Leiweke talked up meetings with the commissioners of the pro hockey
and basketball leagues. Halfway through the story, NHL Commissioner Bettman
trampled on Leiweke's optimism. "I have told Tim, as this stands right now,
there is nothing to discuss."
So did NBA Commissioner Stern, who sounded as if he were dodging potential blame
for an empty arena.
"We didn't tell them to go do a building," Stern told the Star in May 2005. The
Star quoted him adding a joke: "Maybe they can have a WNBA team."
The Star still pondered potential relocaters — the NHL teams in North Carolina,
Nashville and Pittsburgh and the NBA teams in Orlando, Sacramento and Seattle.
After Leiweke's Penguins-to-Kansas City talk in November 2005, the league
quickly refuted Leiweke's comments. NHL Deputy Commissioner Bill Daly smacked
down the speculation, saying the NHL had "no current intention of either
relocating an existing franchise or adding an expansion franchise."
The next day, The Pittsburgh Post-Gazette quoted
Daly as saying that Leiweke wasn't speaking for the league or the NHL board of
governors. "It remains the league's strong desire to continue working with the
Penguins and with local government officials to create an environment in which
the Penguins can be successful in Pittsburgh for the long term," the statement
read. "We have no interest in relocating the Penguins to Kansas City, or
anywhere else, for that matter."
After the sale of the Supersonics, the Star's Randy Covitz told Kansas Citians
to "relax." He added that it was "too early to panic." Covitz noted that talk of
a move a year from now would be ludicrous — season tickets still need to be
sold.
Covitz declined to comment to the Pitch, and calls and e-mails to Star Managing
Editor Steve Shirk were not returned.
Covitz's coverage of the search has reflected a faith in Leiweke's ability to
get things done. Leiweke's résumé breeds such confidence. Leiweke sits on the
NHL's board of governors. His company also owns the NHL's Los Angeles Kings and
a stake in the Los Angeles Lakers.
The Star's editorial board has also given Leiweke a pass. An editorial in May
2004 showed the paper's full support: "Why doubt Leiweke?"
Even with a new stadium under construction, Kansas City will have difficulty
finding a tenant, simply because relocation packages now require more than AEG
and the city may be willing to give.
For instance, Kansas City might have landed the New Orleans Hornets last year,
but Kansas City was outbid. With the New Orleans Arena wrecked by Hurricane
Katrina, the NBA needed to temporarily relocate the team last season. League
officials considered Kansas City and even toured Kemper Arena.
But then came an offer from Oklahoma City, which reportedly guaranteed Hornets
owner George Shinn that his team would get a 5 percent bump in local revenue
over the previous season in New Orleans. The city also picked up the tab for
housing expenses, team offices and upgrades to its Ford Center.
AEG's Leiweke wasn't about to be outdone. "Whatever Oklahoma City gave away is
minuscule in comparison to the opportunity for revenue in this marketplace for
an anchor tenant," Leiweke told the Star in November 2005.
But Andrew Zimbalist, a professor at Smith College and a leading sports
economist, doesn't see how that's realistic. He says AEG would have to offer a
team low rent — or none at all — and perhaps all of the revenue from the arena.
"So it doesn't seem like a promising situation," Zimbalist says. "I wouldn't be
optimistic, if you were asking for my projection."
Neil deMause, co-author of the widely cited Field of Schemes: How the Great
Stadium Swindle Turns Public Money Into Private Profit, wonders what the benefit
would be to the city. "You've got a team, but you're not making any revenue off
of your arena," deMause says. "You've just filled up 40 dates, and you're not
getting anything from it." He says Kansas City and Oklahoma City could end up
being "the cities that everybody loves to play footsie with."
Vacant arenas can become nothing more than leverage, according to deMause.
"Probably every other team in the nation was thrilled when KC decided to build
this arena. It's a win-win situation for them," deMause says. "Either they can
think about moving there and reaping the benefits of the new place, or they can
just use it as a threat."
Gray, with Kansas City's sports commission, dismisses the idea that Kansas City
has become a bargaining chip. "They're not going to jack around with AEG," Gray
says. "AEG is an 800-pound gorilla. The leagues won't play around."
Anyone wondering what AEG and the city might offer a franchise need only look at
the NBA's Grizzlies' move from Vancouver, British Columbia, Canada, to Memphis,
Tennessee. With his team only six years old, but having suffered a reported loss
in 2001 of $13.3 million, Grizzlies owner Michael Heisley began making eyes at
several cities. Heisley's decision to put his team in Memphis made the Grizzlies
the smallest-market team in the NBA.
Forbes magazine valued the Grizzlies at $294 million in December 2005. But to
get the team, Memphis offered Heisley a package worth more than $400 million.
The city of Memphis and Shelby County pledged $250 million for a new arena,
Federal Express added $90 million for 20-year naming rights, and a local
ownership group agreed to buy a minority stake in the team.
Even if Kansas City were willing to part with all of the stadium income, AEG
would likely still need to find a local owner. That's something that AEG and the
city have been unable to do.
Stepping up comes with a hefty price. Forbes valued each of the 30 NBA teams at
an average of $326 million. NHL franchises range from $65 million for the
Carolina Hurricanes to $325 million for the Toronto Maple Leafs, according to
the magazine.
Last month, Barnes told the Star that finding a local ownership group isn't
impossible. "That may be part of the equation," she said.
Gray, meanwhile, isn't so optimistic. He knows that the Chiefs and the Royals
have out-of-town owners. "We tried [to find] local ownership," Gray admits to
the Pitch. "We just don't have anybody in this market that's going to step up
like that, in my estimation."
AEG faces no consequences if it fails to bring a team to Kansas City. The arena
management company won't default on its contract with the city — as long as the
city continues to believe that AEG is doing a good job looking.
AEG invested $50 million in the Sprint Center's construction and signed a
35-year management agreement to operate the arena. The contract calls for AEG to
"use all reasonable efforts" to lure a team to Kansas City within three years
"at no cost to the city."
In fact, if AEG does find a tenant, it may lose money. AEG gets all of the
revenue from the Sprint Center's 72 luxury boxes and club seats at events such
as circuses and college basketball tournaments. If it finds a tenant, AEG would
likely have to give up some or all of that revenue.
Every luxury suite has already sold out, at an average price of $110,000. In a
remarkable show of blind faith, corporations and wealthy Kansas Citians have
opened their pocketbooks for the suites, even though they have no idea what
events they'll be attending. AEG will collect more than $7.5 million a year.
The Pitch recently requested interviews with AEG representatives to detail what
efforts they've made to bring a team to Kansas City. Michael Roth, AEG vice
president of media relations, responded in a conference call with Sprint Center
General Manager Brenda Tinnen. At times, they seemed optimistic that a team
would come. Other times, they hinted that it wouldn't happen as promised by next
fall.
AEG won't reveal which teams are in discussions with Kansas City. Roth said
during the conference call that the secrecy is "out of respect for the cities
where they already play and out of our agreement that we have with the leagues."
But Roth assured the Pitch that "numerous discussions" have taken place between
AEG and prospective NBA and NHL owners about relocating to Kansas City. "
There has not been a single franchise that would
ultimately be sold or moved that hasn't had discussions with representatives of
Sprint Center," Roth said. "And furthermore, with the NBA and NHL clearly being
aware of the Sprint Center, they are playing a role in properly positioning the
building to teams that are realistically looking to move."
AEG has begun to press the city to consider a pro women's basketball team or a
minor-league hockey team, Gray tells the Pitch.
Arena Football also remains a possible and unheralded tenant. Kansas City
Brigade spokesman Rob Thomson tells the Pitch that the Brigade has had talks
with AEG about moving from Kemper Arena to the Sprint Center.
"The Kansas City Brigade and the Sprint Center have
been communicating regularly about teaming together, and both sides feel very
good about the direction it is headed," Thomson writes in an e-mail to the
Pitch. "Although nothing is official yet, we are encouraged a deal will be
completed and we certainly are excited to bring Arena Football and our
passionate fans into the Sprint Center in 2008."
Gray says the deadline of getting a big-league team by October 2007 is realistic
if the team is the Penguins — even though the chances of the Pittsburgh team
moving to Kansas City have seemingly come and gone. "With anything else,
probably not," Gray says.
In the recent interview with the Pitch, the Sprint Center's Tinnen sounded less
hopeful. "Ultimately, it takes a little work, a couple of years to land a
franchise, and we ultimately want to make the right deal with the right team for
Kansas City," Tinnen says. "Ultimately, optimistically, it would be great to
have a team for '07, but it may be the beginning of '08 before we get one. I
just can't predict that."
When asked if any major announcements were on the horizon, Tinnen responded
somberly: "No." She paused for a second and then added, "Not at this time."
