Suns Owner Threatens Relocation, Seattle And Las Vegas Named Front-Runners

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Suns Owner Threatens Relocation, Seattle and Las Vegas Named Front-Runners

The Phoenix City Council opted to delay a vote Wednesday that would decide if $150 million in public resources would be allocated to the $230 million planned renovation of Talking Stick Resort Arena (home of the Suns); had the City Council voted, the measure would have faced a “lopsided defeat.” Council Michael Nowakowski, considered to be the deciding vote, said “I want to make sure the community understands the economic impact of the arena, what renovations are needed to continue operating the arena and the source of the funds that would be used for renovations” before votes are cast. Team owner Robert Sarver has threatened to move the franchise should he fail to receive the financial support necessary to bring the building up to current NBA standards (currently league’s 5th oldest arena). The Phoenix City Council is likely to vote on the renovation plan on January 23rd.

Howie Long-Short: The Phoenix community remains in the dark about the arena renovation project (which would take place between ’19-’21) because its supporters tried to rush the proposal through before a new mayor assumes office; plans were announced just 6 days ago, there have been no public hearings on the project and the city has yet to detail how the funds would be allocated. Those that are aware, are not in favor of the renovations; 66% of the 450 polled oppose the plan, just 20% would support its passing. As of Wednesday, 3 council members were prepared to reject the plan, while Nowakowski remained undecided; 4 no votes would kill the proposal.

Threatening relocation is common tactic to secure public funding for a pro sports venue and Sarver is wise to use the leverage he has here. The club can opt-out of the team’s current lease as soon as ’22 and there are viable landing spots (with new arenas) in both the Emerald City and Sin City. Suns President Jason Rowley has wisely publicly refuted the possibility of relocation, reiterating the team’s commitment to the city.

Seattle is a more “valuable” market than Las Vegas (see: NHL expansion fees), but that doesn’t necessarily mean it’s the most sensible landing spot (see: Chargers in Los Angeles). I asked Neil deMause, a New York–based journalist and the operator of the stadium news website, which city offers the Suns the best option from a revenue generation standpoint?

Neil: Phoenix has 1.8 million TV households and Las Vegas has 700,000, so that move isn’t happening unless Sarver’s in the mood to set his bank account on fire. Seattle is more feasible demographically, but given that Oak View Group isn’t likely to be handing out any sweetheart leases on their newly redone arena – what with a hockey team and concerts already in place – I don’t see that as an especially more alluring option to staying put at Talking Stick Arena.

If the Suns move, which I don’t think they will, I guarantee you another team will be looking to move to Phoenix within a couple of years. It’s just too good a market compared to some of the lousy ones in the NBA.

The decision to renovate (as opposed to building a new arena) was an easy one for Sarver. He has a chance, despite public opposition, to convince a 7-member council (+ the interim Mayor) to allocate $150 million to keep the team in the Phoenix (Sarver will pay the remaining $80 million). There’s little chance he could convince the public to fund a new building that would cost anywhere from $375 million+ to build (see: T-Mobile Arena). Under Arizona law, plans concerning the construction of a new arena require a public vote, renovations simply need the city council to sign-off.

I asked Neil deMause of, if opposition to public funding weren’t an issue, would the franchise be better off building a new arena?

Neil: The issue isn’t what it would cost to build a newer arena, it’s how much of an upgrade it would be. Talking Stick is only 26 years old, so how much more revenue would they get from a newer place? I can see why Sarver wouldn’t want to spend more than $80 million on Talking Stick; what I don’t get is why Phoenix should want to spend any money at all on it.

Fan Marino: Many of those opposed to the renovation plan are really opposed to giving Robert Sarver a hand-out. There’s a consensus among basketball minds that Phoenix “has been one of the NBA’s worst-run franchises since he purchased the team in 2004” and the team is off to a disastrous start in 2018-2019. Mired in a 10-game losing streak, the Suns have the league’s worst record (4-24) and their franchise cornerstones (DeAndre Ayton and Devin Booker) had a heated locker room exchange last week after Ayton accused Booker of lacking “energy” (i.e. he was dogging it) in a blowout loss at Portland.

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What is JohnWallStreet?

JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.

While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.

We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLFELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA).  If it trades on Wall Street, and has a sports angle, it’s in our wheel house.

Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.

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