JordonCooper Rotating Header Image

Credit Union Centre

Value investing in arenas

As a hockey fan, this kind of hurts

Josh Harris said Newark’s Prudential Center was a more important financial piece in his purchase of the New Jersey Devils than the hockey team itself.

Harris and David Blitzer, a New Jersey native and senior managing director of Blackstone Group LP, purchased the National Hockey League franchise last month in an agreement that also gave the partnership control of the Prudential Center.

Located three blocks from Newark’s main transportation hub, the $385 million Prudential Center was opened in 2007. Harris called it “one of the most modern arenas in the country.”

“And we think that with the new capital structure and the new ownership group and the new management that we put in, that we’ll be able to make this arena really realize its potential financially,” Harris said in a Bloomberg Television interview.

Harris, who bought the National Basketball Association’s Philadelphia 76ers in 2011, acquired the NHL team in a deal valued at about $300 million.

Harris has already made changes to the Devils’ business personnel, hiring Scott O’Neil as chief executive officer. The former president of Madison Square Garden Sports, O’Neil is also the chief executive of the 76ers.

Harris said he viewed the Prudential Center as complementary to New York City’s two main arenas, Madison Square Garden in Manhattan and the Barclays Center in Brooklyn. The home of theNBA’s New York Knicks and NHL’s New York Rangers, the Garden is completing a $1 billion private renovation. The $1 billion Barclays Center, home of the NBA’s Brooklyn Nets, opened last year.

“If you’re a big concert event and you stop in New York, you’re probably going to play one of MSG and Barclays, and this arena,” Harris said of the Devils’ home.

O’Neil said in another Bloomberg Television interview last week that the Prudential Center was the fourth-highest grossing arena in the nation, behind Barclays, the Garden and Staples Center in Los Angeles. He didn’t offer specific figures or the source of his information.

Located about 11 miles (18 kilometers) from New York City, the Prudential Center has been a one-tenant building since the Nets moved to Brooklyn prior to the 2012-13 season. Harris said the venue’s concerts and special events would be enough to sustain the building without a second professional team.

“Having a basketball team, an NBA team, in this arena is not in the business plan right now,” Harris said. “We don’t think it’s necessary.”

Interesting bit of arena drama right now in New York.  You have Madison Square Garden being evicted, the Nassau Coliseum being totally renovated and refurbished, the Baclay’s Centre opening, and now the New Jersey Devils being purchased not for the team, but because it gives them access to Newark’s Prudential Centre.

In case you think this is just a New York thing, check out what MSG is doing with the old Los Angeles Forum, a building many thought would be torn down.

The first thing to consider is that arenas are costing $300 million dollars at least with many heading towards the $500 to a $1 billion range (depending on land prices).  Older arenas like Nassau and The Forum now have tremendous value, if you can call a $100 million renovation a value, in part because modern arenas have become so expensive, they aren’t viable in non-premier markets.  Remember that the City of Edmonton is paying a subsidy to the Edmonton Oilers to operate their new arena and Glendale is paying a large subsidy to the Coyotes to manage their arena.

25 Years

Saskatoon Blades

25 years ago the Saskatoon Blades opened Saskatchewan Place with a game against the Brandon Wheatkings.  That night I got a phone call with an offer to go to the game.  Later that week I watched the Canadian Olympic Hockey Team practice in anticipation of some exhibition games they played at Saskatchewan Place.  It was a big deal and an amazing stadium.  Over the years I have seen a bunch of concerts, hockey games, World Junior Hockey Championships, and even some curling at now Credit Union Centre.  The stadium is rather sterile but it’s ours and it’s fun to go tonight with some friends to watch the Blades play the Lethbridge Hurricanes (who when they were the Calgary Wranglers, where the first WHL team I ever saw play).  It should be a fun game night.  Monday I have a column out about Saskatchewan Place and stadium economics today.  A lot has changed although I am glad the famous Blades Pac Man logo still makes an appearance from time to time.

Review of the renovated Credit Union Centre

Credit Union Centre - Saskatoon

2010 World Junior Hockey Championships Logo I was in (the then Saskatchewan Place) for it’s first game in 1988.  It was a horseshoe configuration with the one end open on top and bottom while the other end was open in the upper bowl only.  Over the years the top bowl was completed on one end and for the World Junior Hockey Championships, the arena was totally filled in bringing capacity from it’s original 7,800 to 14,705.

Over the years I was there for the first hockey game (Saskatoon Blades beat the Brandon Wheat Kings), the 1989 Memorial Cup, the 1991 World Junior Hockey Championships, a Billy Graham Crusade, curling, lots of concerts, an uncountable amount of Saskatoon Blades games (most of them they lost) some Olympic hockey exhibitions, lots of tradeshows, and even played a couple of games there over the years.

Now that it is finally done (it only took us 21 years), here is my review.

The Good

  • Upgraded the video screen and added some automated cameras.  They were done really well.
  • 14,705 of us can fit in there now.  That’s almost NHL type capacity and double what many American franchises draw to their games.  Realistically we could move Atlanta, Nashville, and Phoenix to Saskatoon and still have room for the Saskatoon Blades.
  • They still offer free parking.  You have no idea how nice it is to go out there and not have to pay for parking. 
  • The seats are a lot closer to the action then other NHL stadiums and has a similar feel to Rexall Place in Edmonton (which I think had the same architect).  The result is that an already noisy stadium is even noisier.
  • We finally have luxury boxes.  From what I have seen they are pretty standard but I am hoping as time goes on they develop their own character.  Of course that depends on the lease but it’s a nice upgrade from the old temporary boxes.

The Bad

  • The LED ribbon board.  A ribbon board is supposed to go around the entire stadium.  Ours goes around each end and doesn’t connect.  It kind of reminds of Circle Drive (which isn’t a circle).  It looks wrong and like we decided to cut corners and save costs.  I wish they had never done it.  The other thing is that graphically, it looks really weak.  I don’t know if that is a limitation of the technology, how it was used or the IIHF’s use of it.  Either way it looked bad and cheesy.  Then again, maybe they have a 21 year plan to complete it.
  • 14,705 of us can fit in there now.  You thought that Credit Union Centre felt empty when the Blades only drew 1,800 people before, now imagine how it feels.
  • The concourses are really crowded and seem to be poorly laid out.  The northwest corner ground foot traffic to a halt during many games while the temporary concessions stands seemed really rushed and hurried.  There is more room in the west end of the stadium which was reserved for a place for Saskatoon visitors to get questions answered.  In a more balanced situation I am hoping they used in a better way.
  • The Team Store which hasn’t really changed that much.  I wish it would have been made a little bigger.  It’s too small for Blades games and you couldn’t even move in there during any of the World Junior Hockey Championship games which was unfortunate.  It took Mark and I ten minutes to get from one side of it to the till and it wasn’t much bigger then 20 feet across.  That was before the game started, it was inaccessible during the game.

What I Would Like To See

  • A restaurant or grill in the building.  There are times when I have been there when I really want something else other than a cheeseburger, pizza, or fries.  Well maybe I would like those things but I don’t want them from a concession stand.  In other words I really want a good cheeseburger and there isn’t one out there.  I would even be open to a VIP lounge that is accessible with a more expensive ticket (well, then again maybe not).
  • A standard design for outside concessions stands.  I think it would give some personality to the place, even for events like this and clean up the cluttered look that was seen during this tournament.
  • A Tim Hortons or Starbucks concession :: Not all of us drink beer at the game and the coffee was mediocre.
  • While the Blades have their banners hanging in the rafters I would love to see some more evidence that this is the home of the Saskatoon Blades.  When you go to Rexall Place, you know you are entering into the home of the Edmonton Oilers but I never get that feeling that I am entering into Credit Union Centre.

Phoenix Coyotes logo from 1996 In the end, despite all of the improvements, it’s still an obsolete arena by NHL standards but that’s moot as Saskatoon will never get a NHL team.  I know there is a plan to move the Phoenix Coyotes to Saskatoon for five or six games this year but I think that’s a reflection at how bad the team draws in Phoenix rather than how great Credit Union Centre is.

It is too big for a WHL team but I can’t figure out why no one has moved a AHL team to Saskatoon.  A team for one of the Canadian teams would draw well, be close enough to get players easily and would solidify a fan base for the parent team.  Maybe some day. 

Team Canada

Hockey Canada Logo For those of you who are American and don’t appreciate how big the World Junior’s are in Canada, the only thing I can compare it to is the NCAA Men’s Basketball tournament.  The difference is that the entire country is cheering for the same team and all wearing the Hockey Canada Jersey.   Like the tourney though, we are deeply appreciative of good hockey and there are games where the fans cheer for both teams.  Well as Canadians we don’t so much cheer but rather “ooh and ahh” a lot at close goals and good saves but you get the point.

Getting cut

I was planning to take in the Islanders Training Camp tonight at Credit Union Centre.  As you can see from the screen shots below, the practice schedule has been posted on the Credit Union Centre website here.  These screen shots were taken Thursday morning.

image

imageWhen I called out to Credit Union Centre today to confirm the times, I was told that they were not practicing tonight and when I said, “Your website says that they are scheduled to practice tonight.”  I was told, “Your mistaken” and the phone was hung up before I could say that I was looking at the website right now.  It seems kind of weird for an event this high profile, Credit Union Centre wouldn’t be able to keep it’s website current or even list the morning practices correctly.  Not a great job on their part.