Bee: Maloofs on a tour of arena facilities

VF21

VF21

Super Moderator Emeritus
SME
#1
#1
http://www.sacbee.com/content/sports/story/14313237p-15218671c.html

Maloofs are on a tour - of arena facilities

AUBURN HILLS, Mich. -- Joe and Gavin Maloof, who occupied their usual courtside seats during the best-of-five WNBA Finals series opener, are spending the off days touring a few of the newer venues, or at least those within a short charter flight away.

The Maloofs spent Wednesday in Memphis, getting an up-close-and-personal tour of the FedEx Forum from Memphis Grizzlies officials. Next up: the home of the Predators in Nashville, and if time allows, a quick visit to Columbus, Ohio.

"There were some things we liked," Joe Maloof said, "but there are some other things we would do differently."

Meanwhile, back at the Palace …

The 22,000-seat facility remains a functional NBA/WNBA wonder. It was built in 1988 for $90 million -- more than double the cost of Arco Arena -- within months of the increasingly obsolete facilities in Sacramento, Milwaukee and Orlando. Constructed with longevity in mind by Pistons/Shock owner William Davidson, a local businessman who maintains his offices on the premises, the arena just underwent a $20 million to $25 million renovation that added 13 suites (for a total of 192) and several restaurants, and expanded the concession areas.
 
kennadog

kennadog

Dog On It!
#3
#3
Well The Palace cost $90 million to build, I believe, the same year that a whopping $40 million was spent to build Arco. Despite what some people think, you often do get exactly what you pay for. Spend cheap and you get cheap.

Not that I blame Lukenbill. I think the original ownership group was pretty tapped out just buying the team. And they had no help from the City building the arena. Of course, that's why they were going bankrupt and floating in red ink. The city then had to give them a loan to stay afloat. Of course, we know they subsequently sold to the Maloofs.

Interestingly, I think it was Gavin on the radio that said MSE has lost money 5 out of 8 years. They have also projected that MSE over the 30-year lease, will lose money 15 of those years. I'm sure that's a conservative estimate on their part, but probably meant to be a safe estimate.
So if the City were to share the revenue, would the City also want to absorb loses in any down year? Of course not. They just get the rent check every year, regardless of losses for MSE. Much safer bet for the City.

Incidentally, the lack of much cash flow is exactly why arenas need public subsidy. No bank is going to touch a deal where even some negaticve cash flow indicates an inability to make loan payments.

Paul Allen is the 6th richest man in the entire world and his Rose Garden went bankrupt. He makes the Maloofs look like paupers.:eek:
 
kennadog

kennadog

Dog On It!
#5
#5
Franchises have generally been a good investment in terms of increasing value. Similar to buying real estate. Generally, increases in value over time (especially in CA;)). Of course, you don't realize the profit until you sell.
 
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