Warriors’ new gold standard
Take the hottest brand in sports playing in the tech-rich Bay Area, add three consecutive NBA Finals appearances, plus the first arena to open in San Francisco in 78 years, and here’s the result — suites priced at a staggering $2.25 million a year at the Golden State Warriors’ Chase Center.
That’s the high-end cost for eight of 32 courtside lounges, the Warriors’ version of bunker suites at their self-financed $1 billion arena opening in 2019. The low end is $1.3 million annually for that prime real estate, according to sources familiar with the pricing. Separately, the Warriors are selling mid-level suites for about $1 million a year, and 60 theater boxes ranging from $350,000 to $525,000 per year.
|Courtside lounges at Chase Center will have a video wall with cameras placed near the patrons’ seats.
Bottom line, the Warriors have set a new benchmark for pricing premium hospitality on a per-event basis, representing a critical piece of the team’s $1 billion private financing of the arena.
Madison Square Garden, a two-team arena that books about 275 events a year, is the only other venue that comes close to those numbers. As part of its $1 billion renovation, MSG’s 20 bunker suites cost $1.5 million a year starting in 2009. They now cost about $2 million, factoring in escalators, said sources familiar with the deals.
In San Francisco, the courtside lounges at Chase Center carry 10- to 15-year deals and buyers have snapped them up quickly, with about half of them sold since the team started its sales campaign in March, sources said. Team officials have not made the prices public, but confirmed suite prices.
The courtside lounges are built at the event level beneath the seating bowl with no views to the action. But the Chase Center courtside suites will have a short, direct path to seats in the first 10 rows from the floor, said David Manica, the lead architect designing Chase Center.
The $2.25 million courtside lounges include 16 tickets to all Warriors games, including potential playoffs, all other concerts and other events at the arena, plus food and beverage for all Warriors games, parking, and a common wine vault where suite holders can store their own bottles of cabernet in private lockers, similar to high-end spaces at Staples Center and SunTrust Park.
The remaining 24 courtside suites come with 12 seats in the lower bowl. All 32 courtside suites include four extra lounge passes good for suite access only.
In a tech-savvy market, the Warriors are offering a unique feature: Each courtside lounge contains a video wall with cameras placed near the patrons’ seats in the bowl to showcase the view from their hospitality spaces. The aim is to project the actual live view from the courtside seats into the lounges as if there is a large window in the suites looking out to the floor.
The lounges are spacious, about 500 square feet and feature tall ceilings. The look and feel is “five-star hotel,” Manica said. By comparison, they’re about twice the size of traditional suites at Oracle Arena, the Warriors’ current home and the NBA’s oldest facility, where the average suite costs $200,000 to $300,000 a year.
Separately, the Warriors have sold all but five of the 44 mid-level suites, an impressive number considering it’s more than two years before the Chase Center opens. Marketed as club suites, the price includes 16 tickets to all arena events, playoff games, plus food and beverage for Warriors games. Terms for these suites range from eight to 12 years.
The 60 theater boxes are being sold with terms ranging from seven to 11 years.
“We visited every arena in the NBA in the past three years,” said Brandon Schneider, senior vice president of business development for the Warriors. “We looked at what every building has done. It is also important that the experience is unbelievable for all fans whether they are sitting on the floor or in the last row of the building.”
The Warriors are selling the premium inventory on their own at the Chase Center Experience, the name of their preview center that opened in March.
Since financing is private, the team isn’t disclosing total suite funding, but the strategy comes in a market where the San Francisco 49ers sold 150 suites with top prices of $500,000 when Levi’s Stadium opened in 2014, generating more than $400 million.
The Warriors suite sales come in a hyper-competitive but also high net-worth market given the wealth of Silicon Valley. The 49ers sold 96 seats along the 50-yard-line for $250,000 each, which covers food and beverage, owner’s club access and tickets to all events, including the Super Bowl, for 20 years. A minimum purchase of four tickets was required, or $1 million per season-ticket purchase, team officials said.
For the Warriors, a big part of their strategy is the combination of the supercharged Bay Area, a dominant team, and demand created by a city starved for a modern entertainment facility. Chase Center is the city’s first arena since the Cow Palace opened in 1941.
Due to the thriving tech space, real estate prices have peaked in the Bay Area, where the cost of living is already among the highest in the country.
“Even in Oakland, real estate per square foot is more valuable than New York,” said Bay Area native Chris Allphin, a senior vice president with Van Wagner Sports and Entertainment, the sales agency for U.S. Bank Stadium and SunTrust Park. “Look on Zillow … it’s totally saturated.”
Apart from Warriors games, the Chase Center will be an entertainment mecca, commanding the attention of big name concert promoters who soon will have a state-of-the-art facility to compete against the Oracle Arena and SAP Center in San Jose. In 2016, those two facilities ranked among the top-25 arenas worldwide in tickets sales for special events, according to Pollstar magazine. Starting in the fall of 2019, the dynamic is expected to shift to San Francisco with a heavy flow of events going through Chase Center.
“Demand will outstrip supply,” said Bill Sutton, principal of Bill Sutton & Associates, a sports consultant that counts NBA teams as clients. “It is the first downtown arena in that market and there is pricing like nowhere else. Besides basketball, it will be on everybody’s must-play list as a performer.”
The Warriors also have 40,000 people on a season-ticket waiting list, creating pent-up demand for both premium and standard ticket products.
“It’s unique versus other markets from the standpoint that people have been fans all their lives along with the high-tech companies and venture capitalists,” Schneider said. “The suite products are mostly corporate but the vast majority of our ticket holders tend to be individuals.”