OVG scores with local partnerships and strong corporate interest in new Seattle arena, potential NHL club

Though Oak View Group is not from Seattle, the group continues to have success in forming local partnerships and drawing strong corporate interest that will prove vital to both the new Seattle Center arena and a potential NHL club.

“We will be of Seattle, by Seattle, for Seattle, and from Seattle. WE ARE SEATTLE.”

That first statement adorning the cover of Oak View Group’s response to the City of Seattle’s request for proposals to redevelop KeyArena was a bold one that seemed a bit out of place given the group’s Los Angeles home base. OVG CEO Tim Leiweke’s personal ties to Seattle through his wife and his brother Tod, one-time CEO of the Seattle Seahawks and Sounders FC, provided a bridge of sorts. But there was little to really back the boast.

That was addressed in short order by creating a Seattle presence for OVG under the care of Lance Lopes, a Seattle lawyer who worked for both the University of Washington and for 13 years as the general counsel for the Seahawks, Sounders, and Paul Allen’s First & Goal Inc. that manages CenturyLink Field.

OVG Seattle quickly formed relationships with the WNBA’s Seattle Storm and the Seattle University Redhawks basketball program to secure their home in the new arena. They reached out to Pearl Jam to have the band consult on the concert acoustics of the new venue and entertain a potential residency. And to partner on an ownership group to lead the push for an NHL club, they found David Bonderman, the billionaire founder of private equity investment giant TPG Capital. Bonderman graduated from U-Dub.

“Certainly, we expect to have a number of Seattle-based partners in the ownership group when we finish reconstituting it, or constituting it,” Bonderman told Sonics Rising’s Brian Robinson ahead of last Thursday’s historic season ticket deposit drive launch. “Not naming any names, but at the end of the day, you’ll see some folks who are long-time Seattleites in the deal with us.”

In the media deluge surrounding the ticket drive, it was confirmed that Bonderman, a minority owner of the NBA’s Boston Celtics, and partner Jerry Bruckheimer, the esteemed Hollywood film producer, would also pursue ownership of an NBA franchise in Seattle when an opportunity becomes available.

“I’ll add that all three of us, if we are fortunate enough to get an NHL team and the arena, [it] will be run by Seattle, for Seattle, and about Seattle,” said Leiweke. “It’s not gonna be run from L.A. or wherever we all happen to be. This is gonna be a management team that will be based here, will live here, and their families will be here. And these will be people that will be well-respected and well-known to this community.”

To help head that local management team, OVG Seattle hired 27-year industry veteran Steve Mattson as arena director of operations. He spent the past 16 years with the Minnesota Timberwolves as vice president/general manager with full responsibility over the Target Center. Mattson’s wife works for Amazon and the couple had moved to the Emerald City in May 2017.

Brian Robinson

“We’re overwhelmed with the amount of demand there is.”

It’s well-known that Seattle has one of the fastest growing economies in the country. The city proper is home to 5 of the region’s ten Fortune 500 companies: Amazon, Starbucks, Nordstrom, Weyerhauser, and Expeditors. Another, Expedia, is set to move into the city next year. The others — Costco, Microsoft, Paccar, and Alaska Airlines — are all within 15 miles.

The excitement around OVG’s redevelopment efforts, as well as the NHL pursuit, has fueled significant corporate interest.

The new Seattle Center arena will have 58 suites available for corporate purchase, and it isn’t hurting for buyers. “We have 600 requests,” Leiweke shared with SR. “We’re overwhelmed with the amount of demand there is.” He notes an additional 2,000 requests for club seats.

“We’re going to run out of suites and club seats for this venue pretty quickly and this is a good thing. This is a privately financed arena and these kinds of revenue streams are critical to the success of the $1.3 billion investment we are making,” Leiweke told the Puget Sound Business Journal.

Alexa, what’s Amazon’s role in the new Seattle arena?

Amazon could play a big role in the new Seattle Center arena, but Leiweke isn’t revealing the details of the role for the world’s largest internet retailer. Is it purely technological or will there be a greater financial stake?

GeekWire spoke with the executive in a follow-up to a March 2017 interview ahead of the ticket drive launch. Last year, Leiweke specifically mentioned patterning some of the arena experience on Amazon Go, a cashier-free convenience store concept. Now, he’s more tight-lipped on what a partnership would bring to the table.

“This is the tech city of the future, and that means we have to be a showcase,” Leiweke said. “But at the end of the day, whatever ideas they may be giving us or help they may be giving us and process that they may be involved in that has to be between us and them.”

Technology is certain to be involved. Checkout-less purchasing for food, beverages, and merchandising could help reduce wait times and improve foot traffic flow in the new building, increasing sales and attendee satisfaction. Hands-free, voice-controlled assistance in suites, powered by Amazon’s Alexa service, could add to the premium experience. Or leveraging Amazon’s cloud-based computing capability to help manage the technical operation of the new facility. And likely technology most of us are not yet aware of.

The arena investors wouldn’t get into specifics with GeekWire.

“We want to do our best to make this the most tech savvy arena that’s been built anywhere at any time, what exactly that’s going to look like, we don’t know,” Bonderman said.

Amazon is Seattle’s largest private employer, and currently rents or owns more than 1/4 of the commercial space in the city’s downtown. The company continues to grow, and with an estimated 50,000 workers downtown, the potential fanbase isn’t lost on OVG. Leiweke sees the sports and concert arena as a benefit to Amazon as well, an incentive to help recruit new talent to the company.

“My guess is they’ll be very aggressive in trying to help us accomplish being one of the top ten arenas in the world for music because it’s in their best interest, and we in turn are over the moon about being a neighbor to Amazon.”

Other opportunities present themselves in direct investment in the arena, transportation, or more.

“This is the 19th arena-stadium I’ve worked on for naming rights in my 40-year career, and this is the first time in my career that I am being chased.”

Leiweke also revealed to the Business Journal that six major companies have asked about acquiring naming rights. He declined to comment when asked if Amazon, Microsoft, Starbucks, Expedia, or Boeing were among the interested parties.

Could we potentially watch the Seattle Emeralds (or Steelheads or Pilots or Kraken or Metropolitans or...) take the ice in Amazon Arena in 2020?

Naming rights can be a significant source of revenue for a facility. Barclays paid $200 million over 20 years for Brooklyn’s arena. Golden 1 Credit Union and Little Caesars Pizza each paid $120 million over 20 years for arenas in Sacramento in 2015 and Detroit in 2016, respectively. In January 2016, J.P. Morgan Chase paid $300 million over 20 years for San Francisco’s new arena for the Golden State Warriors opening in 2019.

The richest naming rights deal for an NHL or NBA arena to date was signed last August. The Bank of Nova Scotia paid to rename Toronto’s Air Canada Centre starting in July 2018. The deal for Scotiabank Arena spans 20 years at $40 million Canadian per year, a total roughly $621 million in U.S. dollars.

One can imagine what a new Seattle arena will garner. As mentioned previously by Leiweke, any naming rights deal could also include an escalator when an NBA team is acquired.

OVG may not be headquartered in Seattle, but they are certainly planting a flag. With a proposed 39-year arena lease and options to take it to 55 years, the group is preparing to be a long-term part of the community. Its partnerships and ability to draw strong corporate support anticipate a successful part of the community.

This is something to keep an eye on.