Tuesday, September 1, 2009

Arena Rent: $15,000/Game?

An article about the possible departure of the Tulsa Talons - an "arenafootball2" team - from the BOK center in Tulsa gives one an idea about the economics of arena rental.

The BOK Center charges the Talons 15-thousand dollars rent per game, but report the team receives 25-thousand dollars from BOK Suite and Premium seat ticket sales. The Talons say they also have to pay 9-thousand dollars per game in operation expenses like ushers and security and have never received more than $22,800 from the seats.

Let's assume the Talons are telling the truth about their economic situation. You would then get this budget for running a team like, say, the Atlanta Dream:

Arena Rental: $255,000 ($15K x 17 home games)
Arena Operations: $153,000 ($9 K x 17 home games)
Salary Cap: $803,000 (from Collective Bargaining Agreement)

So this is $1.2 million dollars a year minimum to run a WNBA team. This isn't counting such things as:

- player meal money
- player travel and player relocation
- coaching expenses (in the six figures)
- staff operationing costs (salary/office rental/office expenses)
- promotions

It all adds up after a while. Of course, the gate helps alleviate some of the expenses. You hope that the gate at the very least takes care of the arena costs. It's an interesting exercise in speculation, and gives one an idea of the challenges an owner or team president faces.


Anonymous said...

That is a pretty bad sign for Tulsa if AF2 wants rent savings to stay in town.

If football only gets 22k from premium seat revenues per game for a shorter season, don't bet on WNBA getting nearly that much! 24k total cost is not cheap per game for a small town (but nice) arena, and to me this is just another signal that Tulsa is going to flat out be a bust if they go forward. Civic pride will carry them in year one, but then reality will hit pretty hard....and unlike Atlanta where the city is big enough for the team to recover long term, in Tulsa it will just quickly become a joke.

kansasdreamfan said...

Tulsa may have better luck with wbb as it is an area where fans love their women's programs. I attended last spring's Big 12 tourney in OK City. The Sooner fans nearly packed the house for many games. Those same fans will support a WNBA team loyally, especially if the team can land a player from OU - Ashley and Courtney Paris on the roster would almost guarantee great ticket/merchandise sales. I think Tulsa will be a great location for a team.

Anonymous said...

OU fans going to the Big 12 tourney is different than OU fans coming to 17 home games during the summer even if they got the Paris twins (and Sac is not giving up Courtney after spending their pick on her anyway). OU is not in Tulsa. And even if it was, there is a big difference in ticket pricing and time of year....

I sure hope they do well if they decide to do it, but let's be real about the situation. Tulsa is a dinky town with a nice arena and no track record of serious support for the minor league teams it has, and those are guys sports....

pilight said...

$1.2M seems like alot, but consider...

If they average $20 per ticket they only need an attendance of 3530 per game to make that. That's not even counting their share of the TV revenue.

Anonymous said...

I don't know the exact math, but I have heard people talk about W teams spending anywhere from 4-6 million total to run a team (less if can share things with NBA team). The arena and player costs are just the beginning....I worked for a minor league baseball team and you would be amazed even if you run things cheap how quickly it can all add up.

Jeff said...

This has always been the problem/challenge in the WNBA... What is termed "local expenses". When the business model was NBA teams owned the WNBA teams collectively it was less challenging to break even.

One potential solution and one that would help in PR and improved image for NBA players and the players association is every player in the NBA donate one (1) game salary to the WNBA. I haven't done the numbers or math, but generally speaking: 30 teams, 13 players per team (390 players). What's average salary?... 900K (low end). Roughly 4.3 million. Divide that equally between 11 WNBA teams... $390,000.00 each. Roughly. It doesn't cover everything, but it's a nice chunk, it's great PR for the NBA players and league and it helps keep the "W" afloat. Want to make a bigger splash, let the NBA players decide how many games salary they want to donate, but make the minimum one. Heck, you might fund the whole league that way.

Money, in the end, will sink the WNBA... the basketball is good enough, the time of year is good everything Is good enough, except the money. Resorting to "selling" your team name on the front of your jersey isn't a good sign, but it appears it's necessary to survive.

Since the inception of Title IX there have been over 20 Women's Professional Basketball leagues.... only one has made it past year 3, the WNBA. David Stern and the WNBA folks know what they are doing. It has survived this long.

In it's 13th year the WNBA has proved it is for real. Can it withstand this economy and the bottom line..... I hope so.