Ascent Entertainment and the city of Denver pledged a
25-year partnership Tuesday, giving Ascent "a chance to
build a money-making arena and Denver another jewel for its
Central Platte Valley renaissance," according to Alan Snel
of the DENVER POST. Ascent's Avalanche and Nuggets will
move into the $160M Pepsi Center by the fall of '99.
Construction of the privately financed arena, which will
hold 18,100 for hockey and 19,300 for basketball, "is
expected" to begin sometime in October (DENVER POST, 8/13).
Ascent Chair Charlie Lyons: "This arena agreement comes in
the wake of a solid second quarter and the successful
release of Air Force One. Our strategy remains to build
Ascent on a foundation of exclusive entertainment assets
accompanied by strong distribution methods. Our goal is to
maximize the value of each asset" (Ascent Entertainment).
DETAILS: In Denver, Kevin Flynn reports that with the
deal, the city receives legal guarantees that the teams will
remain in Denver until 2025; "title to the land under the
new arena -- making it free of property tax -- to give the
city leverage to enforce the guarantee;" and $1-2M annually
from Ascent, depending on attendance for the new arena's
anticipated 160 events, in exchange for cancelling the
Nuggets' long-term lease at McNichols. The city gives up
the 10% seat tax currently levied at McNichols, which last
year generated $4.9M from all events, "many of which would
transfer to the Pepsi Center;" The city also gives up the
right to book "major" events at McNichols, and Ascent has
the right to book medium and major shows into McNichols if
it doesn't want them at the Pepsi Center. Ascent will
receive the first $1-2M in sales tax paid at the Pepsi
Center each year and can count that money as part of its
required annual payments to the city. If the sales taxes
don't cover the city payment, Ascent "must charge a 1%
ticket surcharge or dip into its own pockets" (ROCKY
MOUNTAIN NEWS, 8/13). In other details, the city will pay
$4.5M for infrastructure improvements that are expected to
cost $5-5.5M, while Ascent pays the balance. Denver will
pay Ascent $2.25M in a sales tax rebate during the two-year
construction phase. Ascent is also responsible for cost
overruns (DENVER POST, 8/13).
LIBERTY KICKS IN $15M: TCI subsidiary Liberty Media
will invest $15M in the Denver Arena Company, LLC, the
Ascent entity that will build, own and operate the Pepsi
Center arena project. As an investor, TCI and Liberty will
not be involved in the management or operation of the Pepsi
Center or the Avalanche or Nuggets. In addition, Ascent and
Fox Sports Rocky Mountain (FSR) announced the signing of a
seven-year regional TV deal for the Nuggets and Avs. The
deal gives FSR exclusive over-the-air and cable TV rights
for 65 regular-season games and all available playoff games
for the Nuggets and Avs beginning with the '97-98 season.
FSR will determine the split between over-the-air and cable
telecasts (Ascent Entertainment).
SAKIC TO STAY: In Denver, Bob Kravitz reports that with
the Liberty investment, the Avalanche will match the
Rangers' three-year, $21M offer sheet and retain Joe Sakic.
The investment "will provide Ascent ... the cash needed to
pay the $15 million signing bonus it will take to keep
Sakic" (ROCKY MOUNTAIN NEWS, 8/13).
