Anschutz Controls NHL Fates of Las Vegas, Kansas City
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NHL fans are about to find out just how powerful the owner of the Los Angeles Kings, Phil Anschutz, is. Anschutz — who is not a publicity hound and rarely gives interviews — now has a chance to orchestrate the league’s next expansion between now and 2009 by placing teams into arenas he has built or is building in Kansas City and Las Vegas.
He’s an executive who is powerful in boardrooms from the NHL to MLS — not to mention his newspaper holdings, his movie production company, his theater chain, and the Anschutz Entertainment Group (AEG), which runs stadiums and arenas, including the soon-to-be-opened arena in Newark that will house the New Jersey Devils.
Anschutz, for the most part, kept MLS alive by owning the majority of the teams until recently. He still owns the Los Angeles Galaxy, the Chicago Fire, and the Houston Dynamo. Last year, Anschutz sold the New York-New Jersey MetroStars to Red Bull for a reported $100 million, and is helping to construct the team’s new Harrison, N.J., stadium. In hockey, he owns the Kings, as well as the AHL’s Manchester Monarchs, and the ECHL’s Reading Royals. He owns a piece of the NBA’s Los Angeles Lakers, and helped build an arena in downtown Los Angeles and a soccer facility in nearby Carson, Calif., which was originally earmarked for an NFL team. He has other sports teams in Major League Lacrosse, the L.A. Riptide, a Swedish soccer team, Hammarby IF, and two German hockey teams, the Hamburg Freezers and Eisbären Berlin. In Britain, AEG controls the O2 arena, which will host two regular season NHL games on September 29 and 30, featuring the Kings and the Anaheim Ducks. Those two games, along with an NBA preseason game between Minnesota and Boston on October 10, are sold out.
The NHL’s expansion plans were solidified when Anschutz’s AEG entered into a partnership with Harrah’s to build an arena on Harrah’s property near the Las Vegas strip. The new building will be opened in 2010 and it appears that Las Vegas already has an owner in movie producer Jerry Bruckheimer, who has spoken with NHL officials about placing a team in Las Vegas.
Neither Kansas City nor Las Vegas is a big TV market. But if Anschutz wants teams in those markets, the odds are pretty good that his fellow NHL owners, along with NHL commissioner Gary Bettman and deputy commissioner Bill Daly, will see it his way. Phoenix Suns owner Robert Sarver, the head of the NBA owner committee studying Las Vegas as a potential league outpost, could be persuaded as well to recommend that the NBA set up shop in the new Harrah’s-AEG building. Both leagues will work with the Nevada Gaming Commission and come up with a solution to get league games off the Vegas gambling books.
Las Vegas’s franchises would be marketed entirely differently than any other sports franchise because of the peculiarity of the marketplace. Nevada has a growing population, but Las Vegas-Henderson is small and there are no secondary markets for cable TV. The casinos are the main business and the prevailing thought was that the casinos would not want a major league team in town, because thousands of people would spend time at the game rather than the casinos. But having Harrah’s as a partner changes that equation. A Las Vegas NHL or NBA franchise would not have the traditional 65% corporate to 35% individual seasonticket holder base. Instead, casinos could work out packages with a franchise and send high rollers and others to games. Packages to attract tourists or convention-goers from other NBA/NHL cities that would include tickets to see their home teams as part of the Las Vegas experience would be available.
Kansas City is a different kettle of fish. The market may have reached its saturation point in terms of economic strength even though the mayor, Kay Barnes, and the city council went ahead and partnered with AEG in constructing a new downtown arena that will open this fall. Most of the dollars earmarked for sports spending in the Kansas City market go to the NFL’s Chiefs. Jackson County, Mo., taxpayers approved a sales tax hike in 2006 to renovate Arrowhead and Kauffman stadiums, which should already bring the city’s NFL and MLB teams more revenue.
Kansas City is a small TV market as well and will not get the cable TV dollars that even Minnesota, St. Louis, and Pittsburgh generate. But with customers now paying big prices for tickets, an NHL or NBA team would get most of the revenue generated in the arena from luxury suites, club seats, and concessions instead of the city, which put up funding for the building. It’s the only way a team could survive in Kansas City.
Anschutz has two buildings that need tenants. NHL expansion franchises could bring in at least $400 million, which would be split evenly among the 30 teams, or about $13 million per team. Those dollars might be part of the 13,000,001 reasons that 29 NHL owners will listen to Anschutz and expand to Kansas City and Las Vegas.
