Will we ever see another arena boom like 1999? Don’t count on it, industry experts say.
Back then, the economy was certainly robust and teams had little problem partnering with municipalities to finance sports facility construction.
Flash forward to 2009, and with large markets facing billion-dollar budget deficits, and in a few cases, bankruptcy, clubs have no one to turn to but themselves to pay for their projects, and it’s been difficult for them to borrow money during the credit crisis.
“In our lifetime, I don’t think you’re going to have that many built at the same time again, and one of the reasons is you’re not going to find the public money anymore,” said Lee Zeidman, Staples Center’s executive vice president and general manager. “It’s going to be tougher and tougher.”
Four of the eight arenas turning 10 years old this year were paid for entirely with private money — Air Canada Centre, Pepsi Center, Philips Arena and Staples Center. Now, times are so tough, even the private sector is shaky in its ability to secure financing.
“If we were trying to build Staples Center or L.A. Live today, I’m not sure it gets done,” said Tim Leiweke, AEG’s president and CEO. “You have a lack of funding the likes of which we haven’t seen in 20 to 30 years.”
Beyond predicting the next boom, the industry wonders about the next paradigm for teams needing new arenas.
“What is the next revenue model?” said Tom Anselmi, Maple Leaf Sports and Entertainment’s executive vice president and chief operating officer.
“It feels like it’s associated with technology, but that’s an enemy as much as a friend,” he said. “You can have a good experience watching the game at home, but is that working for or against us? I do believe nothing replaces long-term the live experience.”
— Don Muret
