newarenanow wrote: KCHockey wrote:
Then on top of that, giving up $4M a year for that new building.
Where does $4M come from?
I thought it was $2.9M.http://www.post-gazette.com/pg/06090/678324-61.stm
The borrowing would be paid off over 30 years with annual contributions of $7.5 million from whoever gets Pittsburgh's casino, $7 million from a slots-backed state development fund, $2.9 million in rent from the Penguins and $1.2 million from the sale of arena naming rights
You are correct. I'm using what the Pens say they are contributing under plan B. The $2.9M plus the $1.2M of naming rights. THe Pens are saying that the naming rights at the Mellon Arena are budgeted under their income already, unlike the naming rights money used to fund Heinz field and PNC park since that was new found money(since 3 Rivers didn't have naming right money).
The Pens feel that they are losing out on income that they already have from the Mellon naming rights. If you listen to any Pens spokesman, they say the total will be $4M. It all depends on what point of view you are looking at. Sorry for the confusion.
As for iamau2fan, you can't expect anyone to take a $20-30M hit on the selling price to keep the fans happy. These guys invested money into the team to make money and have been taking loses the last few years to make you happy. Now they want their money back plus a profit. That is how these guys got rich. If someone really wanted to keep the Pens in the burgh, they will pay the price, but I don't see that happening.
Did you know the Pens will be paying the SEA $3M annually in rent and operating rights fees under their own IoC plan? That is a fact, not my opinion. I'm not going to look up the links because I've posted them infinite times before at this forum.
There is no way AEG can offer the Pens 100% of the arena revenues at Sprint because they have to recoup their $50M investment. The deal the Pens are angling for will give them 100% of revenue rights in a Pittsburgh arena. There is much more $$ in that model with non-hockey events for 150 nights per year. If the Pens get their terms from Rendell, Plan B can be every bit as lucrative as the IoC plan. Rendell even said he was willing to negotiate which means they could probably eliminate the $1.2M in naming rights giveback if they wanted to. There is no logical reason for Rendell to lead with his best offer.
If another city offers the Pens 100% of arena revenues for all events that would be a very real threat to take the team. That is not KC.
The Pens probably would be less profitable in the Igloo for 3 more seasons than they would the first 3 seasons in KC, but we can't project that with certainty. What is certain though is the financing model, ROI, and valuaiton for these types of deals are calculated on revenues/profitability over a much longer term than 3 years, so the initial ROI would not trump a model that showed Pittsburgh would provide a much better ROI over a 10, 15, 20 year period.
These kind of threats are the best news fans that want to keep the Pens in Pittsburgh can ask for. The only leverage the Pens have to extract the exact deal they want from Rendell is their threat to leave. The more real the threat is the more leverage they have.