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Kansas City’s Sprint Center Still has No Permanent Major Leauge Sports Tenant, And That’s No Big Deal

2009 October 1
by Phil Miller

The Sprint Center in Kansas City was opened in 2007 to much fanfare. A gorgeous facility built in a struggling downtown area, one of the hopes was that the Sprint Center would attract and NHL and/or an NBA team. Neither has yet happened, but according to the Kansas City Star, that’s no big deal.

Kansas City is expected to cash in on a rocking year of concerts and events at the Sprint Center to the tune of $1.8 million.

The surprise boost comes from a profit-sharing section in the development agreement between the city and the arena’s operator, Anschutz Entertainment Group.

The surprise boost comes from a profit-sharing section in the development agreement between the city and the arena’s operator, Anschutz Entertainment Group.

Here’s an interesting bit regarding sports at the arena

Any professional team would likely demand big chunks of the facility’s revenues from luxury suites, concessions and sponsorships. That would cut the arena’s ultimate profits.

“The economic model of this building is quite successful,” said Leiweke, who was in town for a preseason NHL match Tuesday night between the Los Angeles Kings, owned by AEG, and the New York Islanders.

“The last thing we or the city want to do is throw away that model and make the arena a loss leader with another tenant,” he said.

“It’s a tougher scenario with a professional team,” he added. If there were a team there now, “I’m sure we wouldn’t be able to write a check to the city for $1.8 million.”

While landing a professional sports team as an anchor for the arena remains the ultimate goal for AEG, Leiweke said the presence of a team also could diminish its popularity as a concert venue. Now, the arena has an abundance of options to offer concert promoters.

This is not good news to any proponent of public funds for sports stadiums. It also affirms the notion that using public funds to generate a positive city-wide economic boost does little good. The economic impact that comes from sports in a stadium flows mainly to fans and to owners, leaving little or no externalities.

Cross-Posted at Market Power

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