SBD/June 6, 2011/Facilities

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  • Cost Of Doing Business: 49ers' Santa Clara Stadium Estimate Increases

    49ers have routinely referred to stadium as a "billion-dollar project"

    The latest estimate for construction of a new 49ers stadium in Santa Clara “has risen to $950 million, up from the original estimate of $937 million,” according to David Goll of the SILICON VALLEY/SAN JOSE BUSINESS JOURNAL. 49ers VP/Communications & Government Relations Lisa Lang said that the new estimate “is likely to change again as design of the 68,500-seat facility” proceeds. Lang said that cost estimates will continue to fluctuate, adding that “team officials have routinely referred to the stadium as a ‘billion-dollar project.’” The stadium “is still on track for construction beginning in early 2013 with completion in time” for the ’15 NFL season. Other changes in the cost allocation and stadium planning include the 49ers “agreeing to pay 15 percent to 25 percent of development costs to cover such team-related facilities at the stadium as the team store, locker room and 49er ‘hall of fame’ facility.” The 49ers will also pay more in rent than the originally projected $5M a year, but Santa Clara acting Assistant City Manager Carol McCarthy said that “the new amount has yet to be determined” (BIZJOURNALS.com, 6/4).

    HAVING TRUST ISSUES: AEG President & CEO Tim Leiweke said that a "big part of the problem in persuading Los Angeles to make a deal for a new football stadium is the rampant mistrust between the city and the NFL -- largely created by so many false starts on stadium concepts." Leiweke said NFL owners "don't have a lot of faith" in L.A., and the city "doesn't have faith in the NFL, either." Leiweke said that AEG's plan to build Farmers Field is "largely misunderstood." Calling the downtown proposal the "best deal that's ever been made for any city in the history of the NFL," Leiweke said, "The biggest thing people don’t understand about the deal is they’re all convinced that the $350 million in bonds is going to end up coming back to haunt the city or ultimately affect the general fund, or become a liability to the taxpayers.” Leiweke contends that “persuading a franchise to relocate," while allowing AEG Chair Philip Anschutz to become a part owner, is "simpler than striking a deal with the city.” Leiweke: “There are 32 teams, and six or seven of those currently don’t have a home that economically works. Are all six or seven of those going to solve their problems in their current marketplace? No. We’re confident that it’s not just going to be one team. I think there are going to be at least two, probably more, that are going to have to look at moving in order to remain competitive within the league” (L.A. TIMES, 6/4).

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  • Vikings, Ramsey County Can End Agreement July 1 If Stadium Not Approved

    Vikings' stadium deal with Ramsey County allows both parties to walk away on July 1

    The Vikings and Ramsey County "can end their preliminary agreement to build a $1 billion stadium in Arden Hills on July 1" if the state legislature "does not approve the project," according to Kaszuba & Olson of the Minneapolis STAR TRIBUNE. The agreement gives both parties "wide 'walk away' rights." There were "fresh signs on Friday of the hurdles a Vikings stadium faces." Minnesota Gov. Mark Dayton sent Vikings Owner Zygi Wilf a letter in which he reiterated that the project "would not move forward until there was an agreement on how to fund $131 million in state road improvements and further details on the public's role in building and operating the stadium." Kaszuba & Olson also noted "much will hinge" on Minnesota's government "first finding a solution to the state's $5.1 billion deficit" (Minneapolis STAR TRIBUNE, 6/4). In St. Paul, Frederick Melo noted Dayton has put the Vikings "on alert" by saying that he cannot support the stadium project "without knowing who will foot the bill" for the road improvements. Dayton "also asked to see a stadium partnership agreement spelled out," saying, "We have yet to see a plan that would result in a proper partnership with the state in the construction, ownership and operation of the stadium." Vikings VP/Public Affairs & Stadium Development Lester Bagley said, "We forwarded (to the chairs of the House tax and transportation committees) what we believe to be a comprehensive transportation finance plan ... and have gotten generally positive feedback on the proposal. But we're not there yet." Bagley added, "We're willing to give the state the appropriate level of authority in terms of operations, ownership. ... We're trying to address that issue" (ST. PAUL PIONEER PRESS, 6/4).

    CAN'T TAX THE PLAYERS: In Minneapolis, Sid Hartman notes one "big change" that will have to be made in the bill before the legislature considers it is the "elimination of the proposed income tax surcharge on the salaries of NFL players." Another type of tax "will have to fund the stadium because NFL sources believe it's illegal." Bagley said, "The NFL has raised the concern that it may not be constitutional to tax one class of people, to single them out" (Minneapolis STAR TRIBUNE, 6/6).

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  • It's Showtime: TD Garden Preparing For Its First Stanley Cup Final Game

    Bruins offering Huge Bear wine in TD Garden suites for $98 per bottle

    Delaware North Sportservice, seizing the opportunity to cash in on the first Stanley Cup Final in Boston in 21 years, has greatly expanded its lines of merchandise at TD Garden. The '11 Stanley Cup championship moves to Boston for tonight’s Game Three and Wednesday’s Game Four. Delaware North Cos. owns Sportservice, the Bruins and TD Garden. For Game Seven of the Eastern Conference Finals in Boston, when the Bruins beat the Lightning to advance to the Cup Final, the concessionaire saw retail sales jump 28% over the regular season, said Sportservice President Rick Abramson. To keep the momentum going, Sportservice worked with its suppliers and licensees to produce 34 new items for the finals, ranging from hats to T-shirts, to collectible coins, pins, mini hockey sticks, commemorative pucks and “dueling team” pint beer glasses. "We expect an even bigger bump for the Finals,” Abramson said. “The Bruins are one of the best brands in sports and we have grown our business tremendously in the playoffs. The fans have been unbelievable in their support of the team. We challenged all our people to get creative to come up with new items and they have risen to the occasion, from concessions to suites to dining rooms and retail.”

    TRYING TO MEET DEMAND: To meet demand for Stanley Cup-branded merchandise, Sportservice set up 12 more points of sale in food concessions. In addition, every retail stand is now equipped with wireless handheld units to ring up merchandise and shorten transaction times. In TD Garden’s premium areas, suite holders have the option to order merchandise and have those items delivered to their skybox. On the food side, Sportservice has rolled out three more combo meals. Prices range from $11 for a hot dog, chips and a Stanley Cup-branded souvenir soda to $12.50 for a slice of pizza and souvenir beer cup. In the suites, Sportservice continues to offer those high-end patrons a limited selection of Huge Bear wines, a California winemaker. Company executives liked the brand’s tie-in to the Bruins and introduced Huge Bear’s Cabernet Sauvignon, Chardonnay and Sauvignon Blanc for the regular season. Those wines, produced in St. Helena, Calif., sell for $98 per bottle in suites, Abramson said.

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  • Dunkin' Donuts Renews Naming-Rights Deal For Providence Arena

    Dunkin' Donuts will pay $425,000 annually for naming rights to arena

    Dunkin’ Donuts has “reached agreement with the Rhode Island Convention Center Authority to extend its naming rights" to the Dunkin’ Donuts Center in Providence for another 10 years, according to Alex Kuffner of the PROVIDENCE JOURNAL. The company “will pay $425,000 annually for naming rights, sponsorship and advertising for the downtown facility.” Dunkin’ Donuts Center GM Lawrence Lepore said that the “base payment will be tied to the Consumer Price Index, so it will almost certainly be higher in later years.” Dunkin' Donuts will “promote events at the facility through a minimum $75,000 cash sponsorship during each year of the contract.” Lepore said that the contract “was agreed to about three months ago, but the deal wasn’t officially announced until now because it took time for Dunkin’ Donuts’ corporate headquarters to sign off on it.” The company under the old contract “had right of first refusal on renewing its sponsorship and naming rights, so no competing bids were sought.” The deal covers a period starting May 1, 2011, when the previous contract expired (PROVIDENCE JOURNAL, 6/4).

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  • And The Crowd Goes Wild: Entrepreneur Starts Site For Daily Deals On Tickets

    CrowdSeats looking to use model based on the Groupon site to sell sports tickets

    A young sports marketing entrepreneuer has launched CrowdSeats, a “daily deals” website offering sports tickets at discounts of 50-90% off their face value. Justin Cener, a 23-year-old Rutgers graduate and founder of CrowdSeats, has invested $5,000 to date to develop a model based on the hugely successful Groupon discount site. Cener built the prototype and at this point the new venture is a “100% solo startup,” he said. CrowdSeats has no deals with major league teams but Cener has had initial talks with the Dodgers and MLS Galaxy about partnering with the daily deals site. Officials with those two teams want to see CrowdSeats build a substantial subscriber base before signing agreements, Cener said. At this point, CrowdSeats has about 275 subscribers in L.A., N.Y., Chicago, S.F. and Boston, the five markets the new business is initially focusing on for offering deep discounts on sports tickets. CrowdSeats is pitching a business model where teams would in general keep 60% of the revenue from tickets sold on the site and Cener would collect the remaining 40%. To get teams on board, their take could start at 80%, he said. Groupon’s half-off ticket deals with major league teams and colleges typically split revenue 50-50, although some teams do keep up to 70% of the revenue. “I need to build numbers in the long run and my plan is to be flexible enough on pricing at the start,” Cener said. “The revenue splits will vary deal by deal.” After registering online at www.crowdseats.com, subscribers receive daily e-mails for discounted tickets for sports events. Clicking on the e-mail takes the subscriber through the process for submitting billing information and ordering tickets. The individual then receives a second e-mail informing them when they can print a voucher to submit to the box office in exchange for their ticket. A photo ID is required to claim the ticket.

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