Group Created with Sketch.
Volume 24 No. 156


AEG’s strength as a leading event promoter was the deciding factor for its sister company winning the job to manage Consol Energy Center, according to Penguins COO & General Counsel Travis Williams. The Penguins yesterday announced they had signed a five-year deal with AEG Facilities to take over arena operations starting Sept. 1. SMG, the incumbent, and Global Spectrum, part of Comcast-Spectacor, the owner of the Flyers, also competed for the contract. “We had a great run in our first two years and AEG [Live] is a promoter with a great platform to drive additional events and shows to what we feel is already a world class facility,” Williams said. “We felt AEG would be our best partner.” SMG opened the building in August '10 after running the old Mellon Arena since '91. SMG had reached the end of a 13-year deal signed in '99, and restructured it as part of a bailout plan to rescue the team from bankruptcy. The club was then sold to former Penguins player and Hockey HOFer Mario Lemieux. For the first eight years of the Mellon Arena deal, SMG served as the Penguins’ landlord and controlled arena revenue streams with the obligation to pay building expenses, Williams said. Over the past five years, those roles have been reversed, with the Penguins taking control of arena revenue and SMG paying a fee to serve as the team’s “agent” for running the old and new facilities. Under terms of the new deal with AEG, the Penguins will continue to control revenue and pay expenses at Consol Energy Center with AEG assuming the agent’s role, he said. The future of SMG's Consol Energy Center GM Jay Roberts and three other arena executives employed by SMG has not been determined, Williams said. Otherwise, the Penguins expect to retain 45 full-time employees and about 500 ushers and ticket takers, he said. AEG’s deal to run Consol also provides the firm with an opportunity to help the Penguins develop land across the street where the old arena once stood. The Penguins are currently forming a master plan for the 28-acre property tied to office and residential use with 250,000 square feet reserved for retail and entertainment. That portion of the development could be modeled after Xfinity Live in Philadelphia, compared with the larger L.A. Live district in L.A., where AEG is a partner, Williams said. The Penguins previously hired real estate developer Jones Lang LaSalle as their owner’s representative to develop the property (Don Muret, SportsBusiness Journal).

IMPACT ON FANS, STAFF: Williams said, “The guest experience will be exactly the same as it's always been. To the outside observer, probably nothing noticeable." He added that there “could be some changes or upgrades in non-NHL events.” In Pittsburgh, Shelly Anderson reports workers at Consol Energy Center -- “including ushers, ticket-takers and maintenance crews -- will keep their jobs.” However, those in SMG's senior management “will have their jobs evaluated, including" Roberts. Aramark remains “as the food and beverage provider at the arena” (PITTSBURGH POST-GAZETTE, 8/2). Also in Pittsburgh, Jeremy Boren wrote Williams “declined to disclose financial terms of the five-year deal.” Penguins officials said that they “believe AEG can increase the number of concerts and other shows coming to Consol Energy Center” (, 8/1).

The Royals and Jackson County (Mo.) officials yesterday “escalated their long-running battle over taxpayer support for Kauffman Stadium and the Truman Sports Complex,” according to a front-page piece by Helling & Dillon of the K.C. STAR. Amid criticism of “how the team uses tax dollars," County Exec Mike Sanders and Royals Owner David Glass "talked stadium spending in a rare phone call between the two.” At the center of the conflict “sits growing dissatisfaction in county government with stadium lease terms agreed to six years ago by the Royals and Chiefs, and the teams’ insistence that the county stick to the deal.” The teams have “long insisted their spending for some personnel costs, including taxes, are fully allowed" by 25-year leases signed in '06. But critics, including “some in county government, argue such spending is unreasonable.” Tempers had “clearly flared” yesterday. But Sanders’ Chief of Staff Calvin Williford said, “We continue to work with the teams to resolve these issues in a way that protects the taxpayers.” Reports that the Royals and Chiefs “spent taxpayer money on personnel costs and other expenses rocketed through the blogoshpere and on local sports talk radio Tuesday and Wednesday.” Some critics were “particularly steamed that the teams had used taxpayer money to cover payroll taxes.” A special fund created by the leases “typically collects $8.5 million in tax money each year from the state of Missouri, Jackson County and Kansas City.” Under the leases, each team “can use its half of the fund for a variety of expenses, including stadium staff costs, utilities and repairs.” That fund “can’t be used for player or front-office salaries and benefits, but can be used for ‘event day operations’ at the ballpark.” The leases contain “no prohibition on spending the money for the clubs’ stadium-related payroll taxes" (K.C. STAR, 8/2).

EXPENSE REPORT: K.C. sports radio station WHB-AM’s Kevin Kietzman noted the Royals have “requested nearly $17 million of taxpayer money the past five years from the Kauffman Stadium repair and upkeep fund.” But documents show that only 9% of the money received was actually spent on repairs and maintenance of the stadium. Below is a chart that lists the Royals’ expenses used from the fund (, 7/31).

Salary, Full-Time Associates
Payroll, Taxes and Benefits-Full Time
Salary, Full-Time Associates
Payroll, Taxes and Benefits-Full Time
Salary, Part-Time Employees
Payroll, Taxes-Part Time Employees
Stadium Services

A lawyer for Hillsborough County (Fla.) Tuesday said that officials "can talk to the Tampa Bay Rays about the team's future stadium plans, so long as they don't get too specific," according to Bill Varian of the TAMPA BAY TIMES. County Commission Chair Ken Hagan said that he "hopes to start that conversation Thursday, the next time his board meets." However, St. Petersburg Mayor Bill Foster "offered his standard response to overtures of any sort from other governments toward the Rays: butt out." He said, "This is more outside interference in something that is between the Rays and St. Petersburg and Pinellas County" (TAMPA BAY TIMES, 8/1). A TAMPA BAY TIMES editorial stated, "It's time to start talking and quit stalling on initiating public talks about a new stadium for the Tampa Bay Rays. A commonsense legal opinion released Tuesday gives the Hillsborough County Commission all the reassurance it needs to have an open discussion about the future of Major League Baseball in Tampa Bay and stadium options." If Foster "continues to bury his head in the sand, the area's elected officials have an obligation to go on without him." Every year that goes by "with no discussion clicks another year off the Tropicana Field lease and makes it easier and less expensive for the Rays to leave the area." The editorial: "The Rays want to talk. The political leaders of both Pinellas and Hillsborough want to talk -- except for one who has isolated himself. It's time to start working toward building a consensus for a new stadium and exploring all of the possibilities, with or without the St. Petersburg mayor" (TAMPA BAY TIMES, 8/1).

Nassau County Senior Policy Advisor & Communications Dir Brian Nevin said that “four developers have applied to become the master developer of the 77 acres surrounding Nassau Coliseum.” On Long Island, Randi Marshall noted Patchogue-based Baldassano Architecture “submitted an application,” as well as Garden City developer Breslin Realty, Plainview developer Donald Monti and Syosset developer Ed Blumenfeld. Nevin said that he “did not have a timetable for a decision.” The winning developer “will be asked to negotiate with” Islanders Owner Charles Wang (NEWSDAY, 8/1).

THROWN OUT: In Las Vegas, Ed Vogel notes the Nevada Supreme Court yesterday in a reversal of its June 19 decision “threw off the November ballot a proposal to levy a 0.9 percent sales tax increase to raise funds to build a $500 million arena near the Imperial Palace.” In the order, justices said that the 200-word description on the Arena Initiative Committee's petition "did not tell signers that, if approved, the arena could only be constructed on property owned by Caesars Entertainment, not on one of three other sites where proposals to construct arenas have been made” (LAS VEGAS REVIEW-JOURNAL, 8/2).

TIDAL WAVE:’s Chase Goodbread reported the Univ. Of Alabama Board of Trustees Exec Committee “issued Stage I and Stage II approval for a new strength and conditioning facility that will be constructed adjacent to the Mal Moore Athletic Building.” The school has an architectural services contract with Davis Architects, whose fee “will be just under $600,000.” The size of the facility “will be approximately 34,000 square feet and it will be available to all UA student-athletes.” The projected completion date is January, '13 (, 8/1).

YOUR NAME HERE: In Albuqerque, Rick Wright notes in recognition of a $1.5M gift that Albuquerque lawyers Turner and Margaret Branch pledged to the Univ. of New Mexico athletic program, the school's football team “will be playing on Branch Field at University Stadium when they step on that new turf for the season opener Sept. 1.” UNM AD Paul Krebs said that the “turf will bear a ‘Branch Field’ logo at both 25-yard lines, with ‘Turner & Margaret’ below in smaller letters.” Krebs added that the naming rights to the football field “have been awarded for a period of 15 years.” He said that the $1.5M will be paid to UNM “in installments … pledged over a 7-year period” (ALBUQUERQUE JOURNAL, 8/2).