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Clippers to announce new arena in Inglewood

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neo_prankster    198

Don't they have a sweetheart lease with the Staples Center?

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dfwabel    1,054
2 minutes ago, neo_prankster said:

Don't they have a sweetheart lease with the Staples Center?

Not much of a "sweetheart" deal when you don't control the premium seat revenue and more importantly, receive leftover dates after the Kings and Lakers get to choose first.

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kroywen    1,448

Just as I was saying that they'd probably be better off financially staying in the Staples Center in the NBA Relocations thread... ;)

 

I get why they're doing this. They want complete control over dates, rather than playing third fiddle to the Lakers and Kings, and they want exclusive sources of revenue. But given that they have a sweetheart lease in place right now, they'll need to significantly increase revenue in a new arena to make up for increased costs.

 

It appears they'll own the arena and pocket all event revenue and concessions from any and all events at the arena. That's a virtual necessity to make this arena profitable. I have a feeling that they're not going to make any bigger of a profit on basketball games alone, but that the other arena-related revenue is going to be what makes it profitable.

 

This was the time to do it, though, while the Clippers are hot and the Lakers are not. Strike while the iron is hot and the Clippers are the most relevant they've been in decades. Ballmer is definitely going to try to cut a unique Clippers fanbase in and around Inglewood - whether the team is still good enough by that point to do so is an open question.

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MBurmy    438

You GOTTA feel for Anaheim right now...any hope that the NBA would come to the ol' Pond is pretty much dead now.

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dfwabel    1,054
1 minute ago, MBurmy said:

You GOTTA feel for Anaheim right now...any hope that the NBA would come to the ol' Pond is pretty much dead now.

No sympathy here.

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kroywen    1,448
6 minutes ago, dfwabel said:

Not much of a "sweetheart" deal when you don't control the premium seat revenue and more importantly, receive leftover dates after the Kings and Lakers get to choose first.

 

But at the same time, the Clippers are paying insanely low rent for use of the Staples Center 42+ times a year:

 

This is from 2008, so the numbers may have changed with the most recent Clippers lease renewal, but this should give a good idea of how little they're paying: http://clipperblog.com/2008/12/04/value-play/

 

Quote

The Los Angeles Clippers lease at the Staples Center sums up owner Donald Sterling’s philosophy of running the franchise: maximize profits by keeping fixed costs low. The Clippers pull in less revenue from premium seating and arena advertising than the typical NBA team. But they pay only $1.5 million a season in rent at the arena, which is owned and operated by AEG, owner of the Los Angeles Kings and a minority stake in the Los Angeles Lakers. The Clippers have posted more than $9 million in operating profits the past five seasons despite fielding one of the worst teams in the league. In 2004 the Clippers extended their lease at Staples for 10 years.

 

Sure enough, the Clippers have been one of the most consistently profitable teams in the league regardless of how they're doing on-court, since their operating expenses are so much lower than most teams'. Their revenue is significantly less, but their costs are more than contained.

 

Of course, Steve Ballmer has a very different operating philosophy than Donald Sterling did. Sterling was just the type of owner who would be content with sacrificing revenue streams in favor of penny pinching and keeping costs very low, and avoiding debt at all costs (the Clippers famously were debt-free under Sterling's ownership, which is very rare in the world of professional sports).

 

A tech guy like Ballmer is not going to operate that way. It's not surprising that he wants to pursue new revenue streams and maximize them, even if it means giving up hilariously cheap rent and taking on plenty of debt.

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kroywen    1,448
8 minutes ago, MBurmy said:

You GOTTA feel for Anaheim right now...any hope that the NBA would come to the ol' Pond is pretty much dead now.

 

It never made financial sense. The only reasons for the Clippers to leave the Staples Center would be to a.) have control over arena revenue streams, both basketball-related and non-basketball, and b.) to have first choice over dates.

 

They'd have neither at the Pond - they'd be tenants of the Ducks (and the City of Anaheim, I believe), and they'd have second choice of arena dates after the Ducks. Why leave downtown LA with dirt-cheap rent just to be someone else's tenant out in Anaheim, with much higher rent? It would make no sense. Even if they get a cut of arena revenue and premium seat revenue (which they don't have at Staples), the increased rent and smaller corporate/population base in Orange County would probably counter any gains in revenue.

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Great move in my opinion. They were always the third wheel in Staples and Ballmer seems eager to carve out a legacy for the Clips in their own building. Also much respect to him for planning to fully finance this arena.

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dfwabel    1,054
9 minutes ago, kroywen said:

 

But at the same time, the Clippers are paying insanely low rent for use of the Staples Center 42+ times a year:

 

This is from 2008, so the numbers may have changed with the most recent Clippers lease renewal, but this should give a good idea of how little they're paying: http://clipperblog.com/2008/12/04/value-play/

 

 

Sure enough, the Clippers have been one of the most consistently profitable teams in the league regardless of how they're doing on-court, since their operating expenses are so much lower than most teams'. Their revenue is significantly less, but their costs are more than contained.

 

Of course, Steve Ballmer has a very different operating philosophy than Donald Sterling did. Sterling was just the type of owner who would be content with sacrificing revenue streams in favor of penny pinching and keeping costs very low, and avoiding debt at all costs (the Clippers famously were debt-free under Sterling's ownership, which is very rare in the world of professional sports).

 

A tech guy like Ballmer is not going to operate that way. It's not surprising that he wants to pursue new revenue streams and maximize them, even if it means giving up hilariously cheap rent and taking on plenty of debt.

They were profitable under Sterling as he owned the team for such a long time, he received his ROI when they played at the sports arena.

 

Not only did Balmer spend $2B for the team, he pays into the luxury tax. While his local cable deal is top 6, all they take in at Staples is ticket revenue. His own facility not only assists Balmer getting a return faster, he assist his team in not having something crazy like back to back Saturday and Sunday 12:30 pm tipoffs. Plus, it's more BRI, Basketball Related Income.

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BlackBolt3    1,187

So a whole new arena less than 10 minutes away from The Forum, history aside, was just renovated in 2014.

 

 

 

Huh.

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LMU    3,137
Just now, BlackBolt3 said:

So a whole new arena less than 10 minutes away from The Forum, history aside, was just renovated in 2014.

 

 

 

Huh.

The Forum was converted into a concert-only venue.

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colortv    238
3 minutes ago, BlackBolt3 said:

So a whole new arena less than 10 minutes away from The Forum, history aside, was just renovated in 2014.

 

 

 

Huh.

 

The forum is far too outdated in every sense to be the home of a professional team.

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BlackBolt3    1,187

But putting major money into two separate venues in the same city within 10 years seems wasteful, no?

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LMU    3,137

MSG has a theater and an arena and nobody seems to raise a fuss.

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The Six    489
48 minutes ago, LMU said:

MSG has a theater and an arena and nobody seems to raise a fuss.

 

Inglewood ain't New York.

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Still MIGHTY    1,927
1 hour ago, kroywen said:

This was the time to do it, though, while the Clippers are hot and the Lakers are not. Strike while the iron is hot and the Clippers are the most relevant they've been in decades. Ballmer is definitely going to try to cut a unique Clippers fanbase in and around Inglewood - whether the team is still good enough by that point to do so is an open question.

 

Yes, try and cut a fanbase literally down the street from where the Showtime Lakers played. Geography is never going to be a thing for the Clippers in the same way it is for the Dodgers/Angels, Kings/Ducks, and Raiders/Rams back in the day. They're going to always be fighting for the same territory as the Lakers. Really, I thought their best hope for anything fanbase geography-wise was the talks of looking for arena land on the west side of town, Culver City/Santa Monica.

 

Almost every neighborhood in SoCal is always going to have more Lakers fans than Clippers fans, but I think they would've been able to tap into some sort of vibe over there. Inglewood? No, they won't have that territorial benefit.

 

Forum is at the top. Clippers plot of land would be at the bottom, to the right of the end point between Prairie and Yukon, below Century.

 

59421e403d28c_ScreenShot2017-06-14at10_40_05PM.png.c7d3691510d9f023edc23b00b4f0812f.png

 

 

1 hour ago, MBurmy said:

You GOTTA feel for Anaheim right now...any hope that the NBA would come to the ol' Pond is pretty much dead now.

 

We're okay, but thanks. The extra revenue in the Ducks' pockets would have been nice, but we'll manage.

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Lights Out    2,241

The Clippers just landed Jerry West this morning, too. Needless to say, it's great to be a Clipper fan today. B)

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kroywen    1,448
6 hours ago, The Six said:

 

Inglewood ain't New York.

 

And there's talk of eliminating the theater as part of renovations to Penn Station anyway. Cuomo is planning on utilizing that space for a grand entrance to Penn Station (link), in fact.

 

To be honest, I've lived in and around NYC my entire life, and I've never once heard of an event going on as the MSG Theater that I'd at all be interested in. I know they obviously run events there, but I don't think it's a huge draw. Bigger acts would rather go to MSG, the Rock, Barclays, etc. Smaller acts would rather play a small dedicated music venue. MSG Theater is kind of floating out there without much appeal.

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Gothamite    6,092
1 hour ago, kroywen said:

To be honest, I've lived in and around NYC my entire life, and I've never once heard of an event going on as the MSG Theater that I'd at all be interested in. I know they obviously run events there, but I don't think it's a huge draw. Bigger acts would rather go to MSG, the Rock, Barclays, etc. Smaller acts would rather play a small dedicated music venue. MSG Theater is kind of floating out there without much appeal.

 

Looking at their calendar of upcoming events, I'd like to see both John Legend and Chris Rock.  Ricky Gervais is not my cup of tea, but I can see he appeals to many. Same with Joe Rogan.  And Mary J. Blige isn't a bad act.  I've only been a couple times, to see comedians like Louis Black.

 

The problem is that there aren't a ton of 5,000 seat venues in the city - Radio City is just over that, 6000 IIRC.  The Hammerstein Ballroom and the Beacon are a little bit below, about 3,000 each.  And then you get to spaces like the Manhattan Center's Grand Ballroom or Irving Plaza, at 1200.  Which are both a pretty big dropoff from MSG.

 

Seems to me that the Theater at MSG fills a solid niche between the large arenas and the more plentiful ballroom venues.

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