Golden Knights and LA Kings Have Complicated Business Relationship: Their Team Owners Both Own A Piece of T-Mobile Arena
By ALAN SNEL
LOS ANGELES — A prime division rival for the Vegas Golden Knights is the Los Angeles Kings and that burgeoning rivalry has the makings of a complicated relationship.
That’s because the Kings’ owner, LA Live-based Anschutz Entertainment Group, is in the unique financial position of benefiting when the Golden Knights generate revenues for their home venue — T-Mobile Arena.
The twist is that Anschutz Entertainment Group, more commonly known as AEG, also owns a piece of T-Mobile Arena — the VGK’s home ice.
Most Las Vegans know MGM Resorts International also owns a healthy share of T-Mobile Arena. MGM Resorts are so invested in the palatial arena behind New York-New York that the company is trying to recruit an NBA team to the venue as a second tenant besides the Golden Knights to generate more revenue from the building.
Golden Knights owner Bill Foley also owns 15 percent of T-Mobile Arena — a crafty investment because his team is the building’s primary tenant. With his millions of dollars invested into the arena, Foley made a bold move recently when his rookie NHL franchise told one-year season ticket holders that they will have to pay a new $3 per ticket per game charge as an arena improvement fee for next season.
At 45 home games at T-Mobile Arena and three bucks per game extra for the arena fee in 2018-19, one-year season ticket holders will have to pay a total of $135 more next season (Plus, those one-year season ticket holders will also pay increased ticket prices for 2018-19 if they renew by mid-January.) Fans with plans of three, five and 10 years won’t face the arena improvement fee and increased ticket prices next season, but eventually they will also have to pay those extra costs down the road.
One-fourth of the Golden Knights’ 14,000 season ticket holders are one-year season ticket holders. So if you multiply 3,500 one-year season ticket holders by $135 a piece next year, Foley just made $4.725 million in new revenue for 2018-19.
With both Foley and AEG serving as co-owners (along with MGM Resorts) of T-Mobile Arena, its has set up a fascinating business milieu where both the owners of the Golden Knights and Kings have motivation to see the venue generate lots of revenues.
It’s an arena Odd Couple, since AEG — controlled by Colorado billionaire Philip Anschutz — stands to financially benefit when the Kings’ rival arena does economically well.
T-Mobile Arena is not the only NHL arena that AEG has a financial stake in. AEG doesn’t own the Arizona Coyotes’ arena, but Anschutz Entertainment Group does manage the Coyotes’ facility. AEG also operates the Barclays Center in Brooklyn where the New York Islanders play. But the Islanders are leaving the Brooklyn venue for a new Belmont arena on Long Island starting in 2020-21.
AEG wants the Golden Knights arena to make money because it’s invested a major chunk of equity and debt into financing the building.
To pay for the $375 million, privately financed arena, both AEG and MGM Resorts each brought $75 million in cash to the deal. AEG and MGM will also pay off $225 million in debt. Bank of America is the lead lender in the T-Mobile Arena loan. (Bank of America, by the way, also helped the Raiders finance their share of the $1.9 billion football stadium in Las Vegas after billionaire casino tycoon Sheldon Adelson took his $650 stadium commitment off the table.)
AEG does own and manage several dozen arenas and stadiums in the U.S. and around the world. Anschutz turns 78 years old Thursday when his NHL Kings host the Golden Knights at Staples Center at LA Live in downtown Los Angeles. Anschutz’s net worth is $12.9 billion, according to Forbes magazine.
*
Follow LVSportsBiz.com on Twitter, Facebook and Instagram. Contact LVSportsBiz.com founder/writer Alan Snel at asnel@LVSportsBiz.com
