Oak View Group CEO Tim Leiweke said Climate Pledge Arena patrons should see an immediate benefit if his company’s pending blockbuster acquisition of food and beverage giant Spectra is approved by federal regulators.
Monday’s announced deal would see OVG, which is spearheading the $1 billion-plus overhaul of the former KeyArena into Climate Pledge, buy out the Comcast Spectacor and Atairos ownership of Spectra. If approved by the Department of Justice, Leiweke said the merger would see OVG jump from 1,500 to about 4,000 full-time employees and enable it to significantly upgrade its food and beverage, customer service and arena operations side.
“I’ll have a lot more executives we can throw at Climate Pledge Arena and make sure we do it right,” Leiweke said. “It gives us a lot more management expertise and a lot more personnel and resources to oversee additional opportunities.”
Terms of the deal were not announced. Though both parties termed the acquisition a “merger,” it’s unlikely to lead to a newly named company.
Philadelphia-based Spectra, with about 2,500 employees, is considered a top venue management and hospitality provider. Though known for its food and beverage capabilities, its venue-management division also specializes in event booking and content development, finance and administration, marketing and sales, operations, ticketing and box-office management.
Spectra CEO Dave Scott said in a statement that the merger “will lead to significant opportunities to cross-sell food, beverage and sponsorship services across our combined client base … to enhance the future of live events for our valued clients.”
Leiweke said the deal “gets us into the food and beverage business, which we currently aren’t a part of. We obviously now take over a whole food and beverage company, so that increases the level of services we can offer as a facilities management company.”
Leiweke said the deal will enable OVG — currently developing seven global venues, including Climate Pledge, the UBS Arena for the NHL’s New York Islanders and a facility in or near Palm Springs, California, for the Kraken’s planned American Hockey League affiliate — to add another six to 12 “brick and mortar” projects to its portfolio.
Climate Pledge is set to open in October and serve as home to the NHL’s Kraken as well as the WNBA’s Storm. Leiweke has said the venue will be fully capable of hosting an NBA team if one is made available. The Kraken’s home opener against Vancouver is set for Oct. 23, and Leiweke last week spent several days in Seattle touring the venue alongside his brother, Tod, who is the NHL team’s CEO.
“Everything happening in there is going extremely well,” he said.
The final arena price tag is more than $400 million higher than what OVG initially budgeted for four years ago, when bidding against Anschutz Entertainment Group for the right to renovate KeyArena. OVG under terms of a deal finalized with the City of Seattle, is assuming the entire arena construction cost and any overruns.
An initial OVG funding deal with Goldman Sachs was replaced in early 2019 by a $500 million construction loan from Truist Bank. OVG is now finalizing a permanent, long-term financing deal with another lender that it hopes to announce next month. The new 25-year deal will replace the construction loan and finance approximately two-thirds of the total arena overhaul cost.
Leiweke said the two-thirds debt load is standard within the arena building industry, and the remaining one-third of the cost has been covered by OVG, Kraken owner David Bonderman and their partners.
The merger with Spectra, which will remain headquartered in Philadelphia, is expected to be completed in this year’s fourth quarter. Leiweke wouldn’t speculate on timing for federal approval.
“Just like with NBA commissioner (Adam) Silver when I say I don’t like to get ahead of commissioners, I also don’t like to get in the way of federal regulators doing their job.”
OVG, co-founded in 2015 by Leiweke and music-industry mogul Irving Azoff, is the world’s sixth-largest arena facilities management company. If the Spectra deal goes through, Leiweke said the newly combined entity would become the third- or fourth-largest.