There are cities smaller than Seattle that support four major league teams, but experts warn there will be stiff competition for fans' dollars to support them as well as the Storm, Sounders FC and major college football and basketball.
Among the many questions surrounding the proposal to construct a new arena in Seattle to host NBA and NHL teams is this: If they build it, will they come?
And not just to the $490 million arena Chris Hansen has proposed be built in the Sodo District, but to Safeco Field, CenturyLink Field, KeyArena, Husky Stadium and Alaska Airlines Arena.
If Seattle acquires pro basketball and hockey teams, as Hansen has said is optimal to make the new arena work financially, the city would be one of 13 to have franchises in what are traditionally considered the four major pro sports — NBA, NHL, NFL (Seahawks) and MLB (Mariners).
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Seattle would also be one of just four cities to have those four as well as teams in MLS (Sounders FC) and the WNBA (Storm).
Throw in the University of Washington football and men’s basketball teams, and some wonder if Seattle would be able to adequately support all of its sports franchises.
The question is a key one that swirls around the contentious debate over Hansen’s proposed arena at a critical time. The proposal will be considered and could be voted on Monday by the Metropolitan King County Council.
“The data is pretty compelling that we would be sort of flooded here with teams,” said William Byers, a UW professor who conducted an analysis on the topic for the Metropolitan King County Council arena advisory committee.
Still, those who study sports economics say that while Seattle would suddenly be as flush with teams as any city in the country, each could be supported given the city’s population and corporate base — especially if the teams win.
“Seattle is a very rich city compared to the actual population so there is enough money to support four teams,” said Rodney Fort, a sports economist and University of Michigan professor who used to work at Washington State University.
Saturation in Seattle?
The numbers illustrate well, though, just how saturated Seattle would be with the addition of two more teams.
Local independent economist Dick Conway, who also prepared a market analysis for the arena advisory committee, calculates that each of the 3.5 million people in the Greater Seattle area would have to attend 2.12 events per year to fill every seat for new NBA and NHL teams, as well as the Seahawks, Mariners, Sounders and Storm.
That ratio is the third-highest among the 22 largest cities in the United States, he said. Only Denver (2.6) and Cleveland (2.32) are higher. Seattle now ranks eighth (1.67).
Mark Rosentraub, a professor of sport management at the University of Michigan, worries that Seattle is “already pretty saturated” with sports franchises and “would be at a stress level” by adding two more.
Hansen insists he isn’t worried about too much competition for the sports dollar in Seattle.
“The bottom line is Seattle is a very large and vibrant market more than capable of supporting four (or five or six, depending on how you categorize MLS and the WNBA) teams,” Hansen spokesman Peter McCollum wrote in an email. “There are smaller, less affluent markets already thriving with that many teams.”
Every pro team and the UW athletic department say they are not concerned about an oversaturation of sports.
“I think Seattle is an incredible sports town, and we obviously supported an NBA team here for a long time and coexisted,” Washington athletic director Scott Woodward said. “And I think it would be nothing but positive for our programs.”
Sports economists acknowledge there would be stiff competition for the Seattle sports dollar, but say each of the teams could still be financially successful.
“This doesn’t mean Seattle can’t handle two more teams,” said Conway, the independent economist.
Neil deMause, who runs the website Field of Schemes devoted to tracking arena/stadium issues, agrees.
“Minneapolis-St. Paul and Denver do it, and they’re smaller than Seattle,” he said. “I expect there’d be some competition for fans, and especially corporate support, but I don’t see why it wouldn’t be manageable.”
Suites and TV deals
One factor that might work in Seattle’s favor, some economists say, is the changing definition of support. Two decades or so ago, support was largely in-game attendance. Luxury suites and other premium seating became a key part of the equation over the past 20 years, combining for 5 to 20 percent of a pro or major-college team’s revenue.
Selling those suites in a new arena would be vital. The NBA’s Sonics saw their suite sales lag in their final years in Seattle. And the current economic downturn would add to the challenge for existing or new teams. The Mariners and Seahawks won’t reveal suite sales, but there are reports of slower suite and luxury-seat sales nationally.
Hansen, though, has expressed confidence that won’t be an issue, writing on the SonicsArena.com website touting the project that the area’s “incredibly strong corporate base” will allow for enough sales of premium seats to go around. Indeed, Washington recently ranked 13th among states on per-capita personal income.
Big money being paid to pro teams via regional television packages also changes the equation, economists say. The Los Angeles Lakers just finished the first year of a 15-year regional-TV contract that will pay them an estimated $3 billion. Hansen has said he expects that “well over half” of the revenue for a new Seattle NBA team would come from national and regional media-rights deals.
“With TV now the key revenue stream for professional teams, Seattle is really an ideal place to add two sports franchises,” McCollum said.
Rosentraub cited the Los Angeles Kings of the NHL as an example of a team whose worth has changed markedly due to the changing economics. He said the Kings “lose money every year” when considering only expenses and revenue from attendance but now make enough from a TV deal to be viable.
“If someone is tethering the team to a regional sports market, and it provides enough nights, a team can lose money on the traditional side because it is making enough on the (media) side,” he said.
The Seattle market’s wide geographic reach could also help pull in fans from throughout the region as well as increasing the value of a TV deal.
Rosentraub also noted that support is in the eye of the owner. What one owner views as an appropriate level of revenue to run his team may be different from another.
“You can have an owner of one of them that really doesn’t care much about making money because (he or she) wants to do it for the region,” Rosentraub said.
Conway said he asked Hansen during the board meeting if he is in it to make money or have fun. Conway said Hansen told him “for fun. … I think that’s important. I’m not sure some of the owners we had in the past viewed it that way, or maybe they thought it was fun in the beginning and when they started losing money decided it wasn’t as much fun as they thought it would be.”
Still, getting fans in the seats remains critical, and new teams would have to draw good crowds to succeed. The Sonics were generally well-supported for 41 years, and although attendance dropped after the sale of the team to Clay Bennett, Seattle often ranked high in league attendance. Observers don’t question that another NBA team would draw well, especially if successful.
Gauging the potential support for an NHL team is somewhat trickier, Fort believes, because the NHL’s potential fan base in Seattle is untested and, “They’ve got to win.”
“It can fly,” he said of hockey in Seattle. “But it all rests on how committed the hockey group is to actually making hockey good in Seattle quickly because (fans) won’t wait for it to come around.”
Economists and other observers say it’s hard to know exactly how different or similar audiences are for each sport.
Conway and Byers say there is some overlap in fan bases. The question is how much.
“The fan spending pie is sort of fixed,” Byers said. “Does the addition of two more teams take away demand for existing teams? At this point, all I can do is raise that question.”
Woodward said the departure of the Sonics had, at best, a “marginal” impact on the crowd at UW basketball games.
In fact, winning seemed to make the only real difference. Washington drew 9,880 per game in 2004-05, for instance, the season it advanced to the Sweet 16, while the Sonics averaged 16,475 at KeyArena as the team won 52 games and a Pacific Division title.
Last season, while winning the Pac-12 title but missing the NCAA tournament, UW averaged 8,785.
“I think having professional sports at the highest level, which is totally different than what we do, is nothing but positive,” Woodward said.
Washington is in the process of a $250 million renovation of Husky Stadium that will open in 2013. Woodward said the university has sold almost all of the 25 luxury suites for the new stadium and is “sold out with waiting lists” for other premium seats.
Economists warn, though, that the market has gotten more crowded since the Sonics left. The MLS’ Sounders FC have set records for attendance since their first season in the league in 2008. Fort, though, said “there is not a lot of crossover” between fans of soccer and hockey and those of other sports.
Also hard to define exactly is the impact new teams would have on smaller sports activities, such as attendance at Emerald Downs racetrack in Auburn, though observers say there likely would be some.
Ultimately, Fort said, what will determine the financial success of any of the area teams is their success in the standings.
“I don’t think it’s a matter of the number of people, because the population is high enough in Seattle,” he said. “Seattle will support teams that win. But you’ve got to win.
Bob Condotta: 206-515-5699 or email@example.com. On Twitter @bcondotta.
“We support anything that is good for the Seattle community and downtown development. Both the Seahawks and Sounders believe that the economic and cultural benefits of professional sports are a central and important contributor to any community’s growth.”
Peter McLoughlin, Seahawks president and Sounders FC
and Adrian Hanauer, Sounders FC general manager and part owner
“The Seattle market is big enough for all of us to be successful. We believe that NBA and NHL teams would be good for this community, but are concerned about the location of an arena and its traffic impacts for fans coming to and leaving games and events as well as scheduling. We believe it should be located on a site which is in the community’s overall best interests, like Seattle Center.”
“Seattle sports fans have shown a willingness to embrace and support many teams and a variety of sports. The addition of two more teams will create great new opportunities for Seattle fans to enjoy more sports.”
Force 10 Hoops, owners of Storm