Can’t We Be More Like San Francisco?

Without getting into too much detail, I’m trying to keep this brief, there were two articles in Sunday’s papers that caught my attention.

First, there was this. A story in the Bee about a potential new arena for the Kings. Marcos Breton estimates that the arena would cost $500 million and be paid for with 75% of public funds.

arcoarena.jpg

courtesy of Sacramento County.

Then, while avoiding studying for the bar exam, I found this story. In the SF Chronicle, Matier and Ross discuss how the 49ers may be beginning to plan a new stadium on Candlestick Point. The interesting thing, is that the estimated $800 million stadium there would be privately financed. In fact, the 49ers would have to give back “the $100 million bond that city voters approved back in 1997.”

Obviously there’s a huge difference between the economics of basketball and football. But my simple question is, if the 49ers can do it, why can’t the Kings?

Matier and Ross point out that the 49ers expect to seek a $150 million loan from the NFL. I’ve not heard a single word about the Kings trying to get financing from the league (but then, maybe I’m not following closely enough).

Breton seems to imply that the Kings are a profitable team:

In fact, let’s repeat the point again: Sacramento is a great NBA market no matter who owns the Kings…
Sacramento has sold out Arco Arena 312 consecutive times. This is the market where Kings ticket prices have skyrocketed, yet the fans keep lining up for more. This is where the Kings enjoy unrivaled adoration from Fresno to the Oregon border, a region that will vastly grow in size and wealth in the next 20 years.

But I wonder, does Sacramento have the corporate base to support the kind of arena that the Maloofs are seeking? Often, arenas are very profitable (as opposed to a little profitable or not profitable) because of a large number of luxury boxes that are typically sold to corporate sponsors. One of the gripes about Arco is that it doesn’t have enough luxury boxes. But Sacramento is mostly a government town, and while there are an increasing number of corporations finding a home here, government agencies and workers generally don’t buy luxury boxes. Frankly, I think it’s incredible they (the employees – fans, not government agencies) keep buying tickets of ever-increasing prices.

Clearly, San Francisco has a sufficient corporate base to support multiple professional sports franchises. They also benefit from their proximity to Silicon Valley, and the wealthy companies down there, who can sponsor luxury boxes and even stadium names (Monster.com stadium?)

I’m also reminded of an interview a few months ago by Jeffrey Callison at KXJZ, with a representative of hometown grocery chain, Raley’s. In the interview, the Raley’s rep said that if the Kings were to leave Sacramento, Raley’s really wouldn’t be impacted at all, despite being a major sponsor of the team. Maybe Raley’s isn’t typical of companies in Sacramento, or companies supporting the Kings, but if there’s little added value in sponsoring the team, then what’s the benefit to companies of having a publicly financed arena?

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