The new Seattle Center Arena will be a “perfect basketball building” and offer the most enticement for an NBA team, says Oak View Group CEO Tim Lewieke.
On Wednesday, OVG and Seattle Hockey Partners LLC announced Tod Leiweke, Tim’s brother and former NFL chief operating officer, as CEO and president of a potential Seattle NHL expansion club. Following the announcement, older brother Tim spoke about Tod with Mike Gastineau of Sports Radio KJR 950AM, Tod’s unique place in the Seattle sports scene, and the efforts to secure the expansion team.
Seattle Hockey Partners LLC is the ownership group founded by billionaire investor David Bonderman and Hollywood uber-producer Jerry Bruckheimer. The younger Lewieke was previously CEO of both the NFL’s Seattle Seahawks and the Seattle Sounders FC of MLS, and is well regarded in the community.
Amidst all the NHL excitement, Gastineau asked Tim about the new arena and naturally had to question the ability to attract the NBA back to Seattle.
Gas addressed an overwhelming concern from a number of Sonics fans that a second (or third) team into a shared facility doesn’t tend to get as favorable a financial footing. While the points have been made previously, Tim succinctly laid out a case for the new arena’s appeal to any prospective NBA owners in three points: the building, the economics, and potential ownership and arena equity.
In addition to the seating capacity that will support an NBA franchise, the arena is being specifically designed with locker rooms for home and visiting NBA teams, as well as locker rooms for the Seattle Storm and a visiting WNBA team. “It is a perfect basketball building,” Leiweke said. “I’d argue it’s as good, if not a better, basketball building than a hockey building.” Leiweke mentioned having recently spent time with design firm Populous going over the architectural drawings and schematics.
Any naming rights and sponsorship deals will be structured so that the partners will be “obligated to spend the same amount of money on the basketball team that they’re spending on the hockey team.”
And we build all of that in so that we can guarantee that the basketball team walks in ... and instead of trying to start their own building, spend a billion dollars to build a new arena, and then go out and compete with us on sponsorship after we’ve taken much of the sponsorship revenue out of the marketplace, we actually build in the additional investment that will be made for the NBA.
As part of the economics, Tim reiterated that they would equally divide the premium revenue garnered from club seats, in addition to the naming rights and sponsorship revenues.
We already know that we are in a position, because economically we are doing extremely well with the building sponsorships and the building revenue, that we can take a third of the revenue — or the revenue directly generated by the NBA team, meaning food and beverage, and parking, and the merch — and give that back to the team. And be able to economically do it because now we have more activity, more dates, more people going through the building, more revenue that we’re generating. And we actually can be more aggressive with the lease that we could give to that other anchor tenant.
Lest anyone still think the group is not interested in being full or part owners of the NBA team, Tim reminded listeners that they are prepared to write a check for the team. They are also open to bringing in an ownership group or involving others in their ownership of the NBA team. Any new owner brought in will have the right to own equity in the building itself.
Though the City of Seattle owns the land and will ultimately take possession of the facility following a proposed 39-year lease (that could potentially stretch to 55 years with two conditional lease extensions), all revenue will be shared amongst OVG and team ownership. The city will be paid through annual lease and a mix of tax revenues guaranteed by OVG to never be lower than current levels plus inflation.
The group plans to pattern themselves primarily after Chicago, as well as New York, Boston, Philadelphia, and Dallas, as a model of a single facility offering the most benefit to two major league anchor tenants. They envision a new Sonics squad to be a “top quartile team” for NBA revenues, which would place it in the top 7 or 8 teams in the league.
So we, we’ve thought of all of this. And for those that ultimately say we didn’t build it for the NBA, couldn’t be further from the truth. We’ve spent an enormous amount of time. We not only meet minimum standards for the NBA, it’ll be one of the better NBA-built, designed facilities. We’ve designed everything into our contractually obligated income, and we have thought through how we make sure this would be a top quartile team in the NBA from the revenue that they could generate. If we could save somebody a billion dollars and they could ultimately move a team here and generate the same kind of net revenue for the NBA team, then that’s what’s going to get us a team.