SMG - Management of Chesapeake Energy Arena

[Swake]

Tulsa can pull from Northwest Arkansas (Fayetteville-Bentonville-Springdale-Rogers) which is a metro of over 500,000 about 2 hours away. It is a growing area (15th fastest growing metro in the U.S. between 2000 and 2017) with a healthy economy that will travel to Tulsa for concerts and events.

Springfield (500k+), Joplin (200k+) and Ft Smith(200k+) are all also less than 2 hours from Tulsa.

[BG918]

Springfield (500k+), Joplin (200k+) and Ft Smith(200k+) are all also less than 2 hours from Tulsa.

Springfield is closer to 3 hours from Tulsa and also 3 hours from STL. While some may come down from that area I would put Joplin/NW Arkansas/Fort Smith squarely in Tulsa's sphere of influence. Also SE Kansas but it's not a highly populated area (likely similar to western OK outside of OKC).

[Swake]

Springfield is closer to 3 hours from Tulsa and also 3 hours from STL. While some may come down from that area I would put Joplin/NW Arkansas/Fort Smith squarely in Tulsa's sphere of influence. Also SE Kansas but it's not a highly populated area (likely similar to western OK outside of OKC).

You must drive slower than I do. Google has it at 180 miles downtown to downtown and even if you drive the 75 mph speed limit you would be there in 2 hours 20 minutes. I can hit St Louis in five hours and Springfield is not the halfway point.

There aren't many people and even less money in southeast Kansas.

[kukblue1]

plus some artist might see OKC as too close to Dallas. 3 hours away where Tulsa is 4 1/2. So if they do Dallas and Do Tulsa they probably can grab some people from OKC.

[kwhey]

yes, but the thunder ownership group is exactly the problem... i don't have any links, because it was personal conversations... but the "thunder don't want to share" stance is what killed OKC getting an ECHL hockey team owned by the Dallas Stars ownership group.

Another reason, I stopped supporting the Thunder. Always me, me, me, me. Not to mention the time the time they got pissy because the Barons put huge banners on the Cox to announce the starting of one of the seasons and the Thunder demanded that they be taken down. The weak child that the city is told them to take them down. The Thunder can go stick it in their ear.

[Jersey Boss]

Wow, never heard that before. If true that would certainly make this hockey fan think twice about attending Thunder events in the future.

[benjico]

Another reason, I stopped supporting the Thunder. Always me, me, me, me. Not to mention the time the time they got pissy because the Barons put huge banners on the Cox to announce the starting of one of the seasons and the Thunder demanded that they be taken down. The weak child that the city is told them to take them down. The Thunder can go stick it in their ear.

I think I remember that banner. It said something like "Think Outside the Ball" and was aimed at people leaving Thunder games. Kinda seemed almost like a shot to the Thunder. I can see why they wouldn't want that type of advertisement in a space they normally control (if that's the banner you're speaking of).

[Jersey Boss]

If that is the case than that is some major league insecurities. A major league team taking issue with the advertising by a minor league entity in a different sport? Puhleeeze. If the Thunder put the kibosh on the ECHL team that is truly an example of bad citizenship.

[GoThunder]

If that is the case than that is some major league insecurities. A major league team taking issue with the advertising by a minor league entity in a different sport? Puhleeeze. If the Thunder put the kibosh on the ECHL team that is truly an example of bad citizenship.

Is there any evidence or first hand knowledge that the Thunder killed the ECHL team, or is this just a rumor? Not saying I have any information either way but it seems like we are talking about unsubstantiated rumors here.

[jonny d]

Is there any evidence or first hand knowledge that the Thunder killed the ECHL team, or is this just a rumor? Not saying I have any information either way but it seems like we are talking about unsubstantiated rumors here.

Shhhhh. Don't spoil the "everything OKC sucks" thread.

[Jersey Boss]

Is there any evidence or first hand knowledge that the Thunder killed the ECHL team, or is this just a rumor? Not saying I have any information either way but it seems like we are talking about unsubstantiated rumors here.

That is why my comment was prefaced with "If the Thunder...". Maybe Jedi has something more definitive.

[jedicurt]

Is there any evidence or first hand knowledge that the Thunder killed the ECHL team, or is this just a rumor? Not saying I have any information either way but it seems like we are talking about unsubstantiated rumors here.

i have had a face to face conversation with someone who works for the Stars ownership group, and was in OKC to discuss the potential of their ECHL team being here. these conversations took place in late 2015, early 2016, with the hope of having had the team play their first season this past year (the 2017-2018 season). but it fell through and the stars re-upped their agreement with the Idaho Steelheads.

The decision for them to take total control of their minor league system came when Tom Gaglardi made the decision in 2014 to purchase the Texas Stars (their AHL affiliate since 2010) so that the team had a total control of not only their brand, but their development prospects. Stars ownership (Tom Gaglardi) has made it abundantly clear that they did not get along with mangement of the Allen Americans (in allen texas) and that is why they ended their development affiliation with them after just two seasons, back in 2011. And the Stars have a long standing dislike for the Stevens Brothers that goes back to the mid 2000's, and they own both the Tulsa and Wichita teams. so OKC became the viable option, because it would be something they would own (much like their AHL team), and have marketing control over, and thought it would be more successful than the Barons, because it would bring back the rivalries with both Tulsa and Wichita which lead to some great Blazers years.

so that's the history lesson. But i was told in my face to face conversation, that the some people were really excited about the possibility, especially with the Stars being so close, and this opening up the door for maybe getting a preseason exhibition of the stars each year, and things like that. and said that for 2 days the conversations where going well, and then on the third day, the OKC group came in and said, that basically everything that had been talked and worked through involving a merch store, any branding of any kind, build out for locker rooms for the hockey team, and whether ice could remain between games, had all come into jeopardy, because the thunder ownership thought it would diminish their product. and that basically the previous two days had been a waste of time.

due to the fact that i still use this source for Dallas Stars information (as we are long-time friends) I will keep who they are and what position they hold out of this... but let me just say that if and when the stars are looking for affiliates, either by contract or owning them, this person would be in the know and would absolutely be involved in those conversations.

[jedicurt]

and as for the banners on the Cox center... i was on the Barons season seat holder Advisory Board at the time... and i can tell you that we were told by prodigal that the reason for removal was the thunder, and them claiming that they had the rights for all advertising on that stretch of reno during basketball season. I don't have anything to go on except the word of Prodigal, which i don't trust at all after my experiences with being a member of that board... so take that lightly that it is the full story.. there might be much more in play... Prodigal loved (and probably still do) to blame everyone but themselves for everything.

[jedicurt]

one last note. i also know that the St. Louis Blues were in OKC in early 2015 (after the announcement that the barons would not be returning). They actually had a contingent of 7 people who were in town and actually at a barons game. this is how i know. i just walked up to them all in their very nice STL Blues themed suits and tie's and asked them why they were in OKC. and they said they were just scouting the market as a potential future development location. I do not know if this would have been their ECHL, or their AHL (although i do know at that time they were having contract issues with their agreement with the AHL Chicago Wolves). I also do not know if it went any further than this one trip where they were looking at the city. But did want to throw that out as more information.

[BDP]

they bring in even revenue, because of the way OKC allows things to happen and people get their hand in the pot here, the break-even point in tulsa is significantly lower,

Interesting. What are the arrangements that allow this to happen and how do they function?

[LordGerald]

I might remind everyone that the OKC Blazers asked to be primary tenants when the Ford Center opened. At that time, it was ludicrous that an arena would be built to NBA/NHL standards, only to house a minor league hockey team. I believe the Council negotiated terms that the Blazers would get scheduling priority UNLESS an NHL or NBA team came available. In 2005, thanks to Hurricane Katrina, those terms were exercised, giving the Hornets scheduling priority for the then Ford Center.

[jedicurt]

I might remind everyone that the OKC Blazers asked to be primary tenants when the Ford Center opened. At that time, it was ludicrous that an arena would be built to NBA/NHL standards, only to house a minor league hockey team. I believe the Council negotiated terms that the Blazers would get scheduling priority UNLESS an NHL or NBA team came available. In 2005, thanks to Hurricane Katrina, those terms were exercised, giving the Hornets scheduling priority for the then Ford Center.

yes but there is a difference between having scheduling priority and not allowing another tenant at all

[jedicurt]

Interesting. What are the arrangements that allow this to happen and how do they function?

My understanding is that part of the set up for the suites is that ticket purchases for all events right now (even non-basketball) the thunder still get their share of that ticket cost, which is not insignificant

and it would be difficult for revenue to be even for same attendance as certain major thunder partners are able to keep some of their highly discounted premium seats for concert events (or in the case i was specifically told about recently, boxing match) and therefore these seats are not sold at a price that allows for SMG to make much of their money back. So this ends up in the amount earned by ticket sales to much less as a large chuck of your higher dollar tickets are not available for public sale at the higher price.

Those are just two things i have heard specifically about.

as for the specific arrangements that allow this to happen, i do not know the piece that allowed for those arrangements. perhaps it has nothing to due with the thunder but their donations and support for the arena as a whole... but those that are getting these benefits are also tied very close to the thunder, so perhaps it just appears that it is the thunder behind this situation.

Again, this is just my understanding of some of the things in place that makes it more profitable for SMG to have events at BOK as compared to Peake. i'm still hoping Urbanized is able to shed some light on what he has found that he mentions back in post #24.

[Jersey Boss]

^^^^ Thanks so much for contributing your insights and knowledge to this topic.

[Urbanized]

My understanding is that part of the set up for the suites is that ticket purchases for all events right now (even non-basketball) the thunder still get their share of that ticket cost, which is not insignificant

and it would be difficult for revenue to be even for same attendance as certain major thunder partners are able to keep some of their highly discounted premium seats for concert events (or in the case i was specifically told about recently, boxing match) and therefore these seats are not sold at a price that allows for SMG to make much of their money back. So this ends up in the amount earned by ticket sales to much less as a large chuck of your higher dollar tickets are not available for public sale at the higher price.

Those are just two things i have heard specifically about.

as for the specific arrangements that allow this to happen, i do not know the piece that allowed for those arrangements. perhaps it has nothing to due with the thunder but their donations and support for the arena as a whole... but those that are getting these benefits are also tied very close to the thunder, so perhaps it just appears that it is the thunder behind this situation.

Again, this is just my understanding of some of the things in place that makes it more profitable for SMG to have events at BOK as compared to Peake. i'm still hoping Urbanized is able to shed some light on what he has found that he mentions back in post #24.

Yes, sorry it has been a busy few days. I do have info to share but it's just been tough to find time to set down and share it. One thing I do know, however :definitively the Thunder does NOT get revenue from non-basketball events. So someone steered you wrong on that one. The Thunder's agreement only gives them control over the suites and premium areas.

[Urbanized]

Basically the suite holders get their suite's tickets to all of the events held in the building. It is a part of their deal with the Thunder, and the Thunder's agreement with the City gives the team control of this (standard in an NBA arena). If you are a suite holder, you want very much for there to be TONS of non-basketball events, and the Thunder in turn ALSO wants tons of events because it makes it easier to charge big $$ for the suites. Regarding the terrace suites, the arrangement is that terrace suite ticket holders have first right of refusal for all events in those spaces, but revenue goes to the venue/promoter, and if they don't exercise their right to purchase those tickets then revert to the building/promoter to sell.

But regarding the Thunder not wanting other events, this is one of the assumptions being made here that I believe is a critical interpretive error taking place in this discussion. That is, the reality ACTUALLY is that the Thunder is highly-motivated for there to be lots of cool stuff in the building. And in fact it is my understanding that they aren't shy about championing this.

That said, I know zero about their feelings regarding sharing the buildings with other teams. I suspect it would be difficult for any minor league team to make a go of it in the building though, and this isn't specifically due to the Thunder; it is just a very expensive building to rent. And unless you can cover that in sales it is a tough fit. It doesn't help that suite sales would be off the table (because of course the premium areas were transferred to the primary tenant, the Thunder, which is again a standard NBA deal these days). But even then most minor league teams can't command enough revenue out of suites to help make much of a dent the big rent check, even if they had access.

By the way, access to premium areas, advertising sales and the like is not unusual and even causes friction when two major league tenants share a building. In fact in the example often cited of the Staples Center, the Clippers have been considering leaving because the Lakers own all of this stuff and it is difficult for the Clips to derive revenue now standard for NBA teams.

[jdg78]

Urbanized- Great insight. So, in your opinion what do you believe cause the BOK to attract more first readers n shows?

[jdg78]

Correction. Causes BOK to attract more first run shows?

[jdg78]

Also, it seems the BOK has more shows throughout the year.

[Urbanized]

Well, found out some interesting data on that also. It’s not as disparate as I previously thought, with some of the past few years where OKC actually had more Pollstar top 50 acts than did BOK, which I was personally surprised about. And in general our performance there is closer than I expected. It’s an interesting topic, and I wish I had regular access to the paid version of Pollstar because that’s the best way to compare and I’d love to dig around more. But Pollstar is expensive and it really only makes sense if you’re in the business.

To fully answer your question there are a combination of factors and I sort of need to go through and post in a way that will make it easy to understand.

But to cut right to the chase, to properly measure the performance of Chesapeake the correct measure is not to compare vs BOK (or Sprint Center in KC or Intrust Arena in Wichita or Verizon Arena in Little Rock) or any other non-NBA arena. The Thunder DOES have some impact on bookings, and I’ll explain more later.

But by the same token it also isn’t fair to compare to Staples, or Madison Square Garden, or even American Airlines in Dallas. Those are cities that artists and promoters leave big gaps for during tour planning, as they wait for NBA and NHL schedules to be released. And OKC is not one of those cities, and likely never will be. What IS fair when evaluating the performance of our arena is to compare to NBA arenas in similarly-sized markets (Memphis, Salt Lake, San Antonio and others). In which case we do very well.

If you’re going to compare to BOK or other non-NBA arenas you have to consider the 41+ game nights and call them what they are; 41+ rock concerts in their own right. In which case, our building outperforms this in a pretty incredible fashion. Simply put, our buildings have different business models.

That said, there are a number of reasons I think we will be seeing a shift towards even more shows at Chesapeake, which is some great news as a music lover.