Tuesday, February 28, 2012

UNO Seeking a Hockey Facility Decision

UNO hockey coach Dean Blais set off a bit of a firestorm locally with a quote in the Minneapolis Star-Tribune about the long-rumored arena for UNO:
"It takes two years to build an arena," Blais said. "It [an arena announcement soon] would be perfect timing."
Blais said UNO has been working for three years on the proposed arena. "We have the plans and everything nailed down," he said. "And now it is just getting the pieces of the puzzle put together."
From a contract perspective, it would be perfect timing as UNO's lease at the CenturyLink Center expires in two years.  But let's not forget about the history of UNO; almost nothing goes "perfect" for UNO.  (Aside than being able to hire Dean Blais, I think.)  We've heard this story about a new UNO arena for some time; Blais has even said it was a done deal a few times over the last couple of years.  And it's still not coming.

Or is it?  Some insiders insist it is.  They may be right.  I'm still skeptical.  The common rumor is that it's an 8000 seat arena.  Better than last year's 7500 seat rumor, I suppose.  (One I dismissed at that time to quite a bit of ridicule.)  But still woefully too small.

UNO has a valid reason for looking for alternatives to their existing contract with MECA.  Trev Alberts has talked repeatedly that UNO facility costs are out of line compared with what other college hockey programs pay. He's absolutely right.  But how does UNO get them in line?  A new building could help...in theory...but it really depends on how the building is financed.  And that's where the numbers get awfully questionable in my mind..and since we don't even have a solid proposal to work with, all we can do is guess at the numbers.

A new arena is going to cost $60 million to $100 million, depending on how big it goes.  It opens up new revenue streams (concessions, advertising, naming rights).  It also opens up new charges (mortgage, maintenance) that UNO doesn't currently pay.  And that's where I part with many UNO fans.  The more I hear about the UNO arena plans, the less I agree with the idea.

That's based on what I think the numbers will show, and that's pure guesswork on my part.  Speculation is that an 8,000 seat arena would cost around $60 million.  A right-sized 10,000 seat arena would be more; perhaps $80-$100 million.  Naming rights, advertising, suites, and concession revenue only go so far in paying for that bill.  If UNO has to finance $20 million of that bill, that's probably a $1.2 million mortgage each year at 4.5%. 

Spread that over 22 home games a year, and that's over $55,274 a game.  Dividing that over an 8,000 seat arena, that's almost $7 a seat per game.  Each and every seat.   That's an extra expense, and it's extremely unlikely that UNO is paying MECA anywhere near that amount.  (And I haven't even begun to discuss maintenance of any building in these numbers...)

This is fuzzy math at it's worth.  I'm purely guessing at that $20 million.  If new arena revenues and donations mean less money has to be borrowed, the numbers get better quickly.  If that number is low-balled and UNO has to borrow more, the numbers get even worse for UNO.  It's literally a bet-the-program choice; choose wrong, and the financial impact of that decision could destroy the athletic program.  Choose right, and of course, it could save the program.

I still believe that, at it's core, a decision by UNO to build an 8,000 seat arena is the wrong one.  UNO used to play in an 8,000 seat arena:  the Civic Auditorium.  UNO sold out every game in those years, and that apparently is the basis for thinking that UNO can support an 8,000 seat arena again.  I point out one thing though: if UNO is turning back the clock to 1999, then why is UNO wasting Dean Blais' time.  UNO hired Dean Blais because Trev Alberts thought big.  It was an ambitious plan.

That's why 8000 seats is such a bad idea. It says that this is as good as it gets for UNO hockey, as the Mavs averaged that last season.  There's no vision about taking the program to that next level.  I think Blais has championships in UNO's future.  Championships bring interest in the program, but UNO is capping interest at it's current level.

Some fans point out that if seating capacity is reduced, UNO can raise ticket prices.  Sure, that'll bring in more revenue...from the people who have sustained this program all along.  Thanks for supporting the program through think and thin; now pay an additional $200 per seat to pay for the new arena this season.

I don't know what UNO is really thinking.  It could be an elaborate ploy to get MECA to cut a more equitable arrangement.  Or UNO may have a more realistic financing scenario that I'm not seeing.

All I know is that all this talk about raising prices to play in a too-small of an arena depresses me about the future of UNO hockey.  It makes me wonder how much longer I can afford to continue supporting UNO hockey.


John Brumbach said...

Very good article.
As a season ticket holder, I like the CLink more than the civic. Video replays, bigger seats, bars within 2-3 blocks.
But I honestly think we would win more games in an 8000 seat arena. The size of the building is intimidating to opponents but the fans are not. You could not hear yourself in the Civic and even with 11,000 in attendance on Saturday you could still hear the music.
The WCHA is so competitive, imagine just 2 more home wins a season because the fans helped win the games.
Again good article but don't forget the intangibles.

Husker Mike said...

What happens to the atmosphere when the students are kicked out in favor of paying customers?

It's probably just me, but aside from a few special occasions (Tuesday night, Niki eating Jack Johnson, "Where is Ryan?") I never thought the Civic was that much louder that the CLink.