You think costs will go down in 3 years? Interest rates aren't going to go down by then, but costs will keep going up. Especially labor costs.

I don't think you quite understand how expensive it is to build things with other people's money. This is not going to go from being a $900M arena to a $1.1B arena in 2 years and if it does, then I guarantee you the finance cost is going to blow $200M out of the water. If we're dealing with 10% inflation in 3-5 years then borrowing rates will be in the teens.

I have no qualms breaking the MAPS model and building a project of this scale with some debt involved, but starting construction 2-3 years before we even start collecting is, if I'm being charitable, "ambitious"

We've going to have to build a new arena sooner or later. Trust that the leadership are further ahead on this project than most believe.

If we take the attitude about building the arena and having the team leave as a reason to vote down the project, then you will seal the fate of the Thunder leaving and a new arena not getting built.

This may be our last opportunity to get a truly State-of-the-art arena built with all of the different groups wanting funds for their projects as they successfully pulled off in MAPS 4. We're going to have one chance to get this project secured--December 12 special election passage for $900 million.

Don't gamble that the project will be scaled down and there will be another vote if this fails.

Hundreds of millions of interest...there's zero world where waiting two years has that amount of opportunity costs. There's no scenario for this where the city is making the most sensible financial decision when the city's needs are the paramount concern in the discussion.

Anyway, the context of my comment wasn't about financial analysis; it was about showing how the city is being pushed for this package against its own interests and the most sensible reason this local ownership group would be trying to secure the future of the franchise today is because they intend to sell, likely after the media rights deal and maybe some expansion.
Your value analysis is more like a home owner, not a business owner. If you are selling a hotel, for instance, the value isn’t replacement costs, but rather the revenue earning history and capability. Increased income potential adds value in multiples. Increasing value by the two years of interest cost doesn’t equal two years of revenue increase, but multiples of that. Getting started raising revenues accelerates the earning arc and the value calculations.

I read an article several years ago from Dead Spin about the fall of the Super Sonics in Seattle. IT's a good read. Here is the link, and an excerpt from the article. The author worked in Public Relations, and had been fielding calls from angry fans about WHY the team needed a new arena just 10 years after a $100 renovation?:

"...Alas, Walker didn't have the good sense to lie to us. He went through a litany of minor reasons why the team needed a new arena: higher capacity, bigger arena footprint, more room for high-end concessions, more places for premium seat holders, a.k.a. the super rich, the people who could afford a pair of courtside season tickets for $70,000. These were the justifications he offered us to explain why we were asking for a heaping pile of taxpayer dollars. After Walker's spiel, a member of the sales staff asked the fateful question: "Wally, what will this arena upgrade do for Joe Sixpack—the regular fan?"

Dead silence.

After an uncomfortable few seconds, Walker said, "Well, nothing." The wind went out of me. It was as if he'd punched me in the stomach. Walker tried to backtrack, but the damage had been done. The battle for hearts and minds had ended before it'd even begun. I didn't see how we'd get an arena deal led by men who couldn't conceive of it as anything but a rich man's boondoggle, perpetrated on behalf of other rich people. Average people would shoulder the costs of making sure that the Puget Sound's affluent—suits at Boeing, executives at Microsoft—could be coddled at a sporting event that average people would no longer be able to afford to attend..."

https://deadspin.com/howard-schultz-gave-out-3-50-starbucks-gift-cards-an-5907371

I read an article several years ago from Dead Spin about the fall of the Super Sonics in Seattle. IT's a good read. Here is the link, and an excerpt from the article. The author worked in Public Relations, and had been fielding calls from angry fans about WHY the team needed a new arena just 10 years after a $100 renovation?:

"...Alas, Walker didn't have the good sense to lie to us. He went through a litany of minor reasons why the team needed a new arena: higher capacity, bigger arena footprint, more room for high-end concessions, more places for premium seat holders, a.k.a. the super rich, the people who could afford a pair of courtside season tickets for $70,000. These were the justifications he offered us to explain why we were asking for a heaping pile of taxpayer dollars. After Walker's spiel, a member of the sales staff asked the fateful question: "Wally, what will this arena upgrade do for Joe Sixpack—the regular fan?"

Dead silence.

After an uncomfortable few seconds, Walker said, "Well, nothing." The wind went out of me. It was as if he'd punched me in the stomach. Walker tried to backtrack, but the damage had been done. The battle for hearts and minds had ended before it'd even begun. I didn't see how we'd get an arena deal led by men who couldn't conceive of it as anything but a rich man's boondoggle, perpetrated on behalf of other rich people. Average people would shoulder the costs of making sure that the Puget Sound's affluent—suits at Boeing, executives at Microsoft—could be coddled at a sporting event that average people would no longer be able to afford to attend..."

https://deadspin.com/howard-schultz-gave-out-3-50-starbucks-gift-cards-an-5907371

deadspin lol .. but what he could have said is " a new arena means you get to keep your team"


the new okc arena will provide tons and tons of new things for 300 level seat holders ..

deadspin lol .. but what he could have said is " a new arena means you get to keep your team"


the new okc arena will provide tons and tons of new things for 300 level seat holders ..

Like what? Or is this another example of trying to speak authoritatively without actually knowing the details?

Like what? Or is this another example of trying to speak authoritatively without actually knowing the details?

I mean, modern arena, more retail and concession space (has been mentioned numerous times by Mayor Holt). Without knowing the true detail and specs of the arena, these are 2 things that will likely benefit everyone, not just the wealthy.

Like what? Or is this another example of trying to speak authoritatively without actually knowing the details?

just like the renovation of the peake would have done .. full bar area or 2 will be in the 300 level ... with better food options ..

just like the renovation of the peake would have done .. full bar area or 2 will be in the 300 level ... with better food options ..

Wow, this is a pretty interesting concession.

Your value analysis is more like a home owner, not a business owner. If you are selling a hotel, for instance, the value isn’t replacement costs, but rather the revenue earning history and capability. Increased income potential adds value in multiples. Increasing value by the two years of interest cost doesn’t equal two years of revenue increase, but multiples of that. Getting started raising revenues accelerates the earning arc and the value calculations.

Right - so owners who want to sell want this quicker. From the city's perspective this should be viewed from a "home-owner" lens because we're not engaging in a major business activity (yes I understand we receive a kick back from business generated revenue), but rather own a piece of real estate that we're leasing out. A lot of the success of MAPs comes from how sound it is from a fiscal perspective. We're not wasting hundreds of millions in financing costs we have no real way to recover except to further raise taxes.

just like the renovation of the peake would have done .. full bar area or 2 will be in the 300 level ... with better food options ..

So "tons and tons of new things" is...a bar and some better food, which could've easily been added to the existing stadium? Great sales pitch.

So "tons and tons of new things" is...a bar and some better food, which could've easily been added to the existing stadium? Great sales pitch.

The things that CAN'T be added to the current arena will also benefit citizens, and not just the wealthy. Better docks and ability to get in and out for those semi-trucks will lead to better shows for everyone.

And also, no, those other options can't really be added to the current arena. There is only so much more room to add to. And this would be it, and only adds a couple years to the life of the arena.

Again, there are hundreds of reasons to build a new arena. If you want to nitpick all of them, then that is your prerogative. But being biased doesn't help further discussions.

Confident OKC will not repeat the mistakes made with the Downtown arena (Square footage/bare bones interior/exterior). The new arena will have more square footage b/c this is one of several major issues for building a new arena.

Although we all want to see some renderings, you're not going please everyone.

Yes, it going to cost--10x ($900M) what we budgeted for the DT arena ($89 million) in 1993. Confident it will be among the best in the NBA. The $120 million ($70 million Maps 4/$50 million ownership group. That's more than enough for Architectual designs and drawings.

You know regardless of what's designed, there's always going to be critics and those who will never be satisfied. INVEST IN OKC'S FUTURE.

... We're not wasting hundreds of millions in financing costs we have no real way to recover except to further raise taxes.

The other way to recover the financing costs is to move up the timeline for generating revenue. If the revenue stream is enough to cover financing costs, then new taxes would presumably not be needed. If the revenue stream is more than the financing costs, then you'd be delaying the ROI by using the cash method and would effectively be losing money while waiting to raise the cash before starting construction.

Of course, the potential returns can only be estimated, and it seems that exactly how much the current arena generates and how much of that the city actually gets is a bit of a blind spot. IMO, this is one reason knowing lease terms might clear some of it up. Because if financing is involved, then we'd want to make sure that the city is getting at least as much participation in arena operations as would service the debt. I imagine that's why we see a bigger chunk of arena revenue going to ownership groups who contribute in the hundreds of millions for construction of a venue, because they have to have revenue to service that debt.

Of course, all of this is obviously a gray area without knowing the details of how any of it is structured, but, in theory, debt could be serviced by operational revenue instead of taxes.

https://www.koco.com/article/oklahoma-city-thunder-contribution-arena-fair/45433449

I wonder why the ownership group refused to sit down with KOCO. That's really weird.

https://www.koco.com/article/oklahoma-city-thunder-contribution-arena-fair/45433449

I wonder why the ownership group refused to sit down with KOCO. That's really weird.

That is a really sad attempt by Holt to try to cover for the Thunder. "Well, Detroit has 4 million people" isn't really a defense at all. And the Thunder not speaking at all speaks volumes about what they think of the voting populous.

https://www.koco.com/article/oklahoma-city-thunder-contribution-arena-fair/45433449

I wonder why the ownership group refused to sit down with KOCO. That's really weird.

The article you shared never said they refused to sit down with KOCO? Not sure where you are inferring that from.

That is a really sad attempt by Holt to try to cover for the Thunder. "Well, Detroit has 4 million people" isn't really a defense at all. And the Thunder not speaking at all speaks volumes about what they think of the voting populous.

It didn't seem like they asked the Thunder to talk. Nowhere does that article say they refused to talk.

And yes, it is a defense. Detroit has every pro sport in the Big 4. OKC has 1. And will never get another if they lose the Thunder.

It is disingenuous of you to bash the Thunder when I don't see anywhere in that article they refused to cooperate.

And it also isn't fair, in that the private wealthy don't keep the revenues, aside from related to the item they own (The Thunder). If N*sync plays the new arena, the owners get nothing. If the owners sell the team to an ownership group intending to move, the owners get nothing for having this nice new arena. If another group buys the Thunder, they won't be staying here, especially after their lease is up. So no buyer will pay a premium for an arena they have no control over. I truly wish people on here got that. Why pay extra for an asset you won't own or have control of? Imagine if the Thunder owned it, then sold, and the arena went to a group out of, say, Seattle or Louisville or something. Then I could see your pissing and moaning that the wealthy would benefit. But as it will stand, if the Thunder sold, the arena would stay under OKC control, and the Thunder owners could try to include its lease as an asset to a potential buyer, but no group will accept that. It adds no value to them.

The article you shared never said they refused to sit down with KOCO? Not sure where you are inferring that from.

You gotta watch the video, Sport. @4:15

It’s just a bit surprising that a group of native sons would refuse to speak with local media.

Are they embarrassed that they only offered $50M?

"The public's going to pay for it, but the private part will keep all the money. That's not a partnership. That's exploitation," Bradbury said.

That's where this analyst's bias is showing. He doesn't know that anymore than any one else does, unless he's been in the room with the brokers of this deal.

What he doesn't mention is that, in the recent examples where the private part pays around half of construction the public part gets next to nothing. So, which is really a better deal?

I know he'd say "it all sucks". I just think he could probably make that argument without making stuff up. If you're starting from the position of these deals are always bad regardless of how they're structured or who gets what, then just say that and move on without misrepresenting what you actually know.

That's where this analyst's bias is showing. He doesn't know that anymore than any one else does, unless he's been in the room with the brokers of this deal.

What he doesn't mention is that, in the recent examples where the private part pays around half of construction the public part gets next to nothing. So, which is really a better deal?

I know he'd say "it all sucks". I just think he could probably make that argument without making stuff up. If you're starting from the position of these deals are always bad regardless of how they're structured or who gets what, then just say that and move on without misrepresenting what you actually know.

No, his studies show that these agreements don't pay off, even those in which the public retains ownership in the stadium. It's quite the claim to say someone doesn't have any knowledge just because you don't like their conclusions. If you read his work, it shows precisely what he states - the private companies get inflated valuations and heavily subsidized arenas at almost no cost. We are socializing the costs while privatizing the gains. It's not "bias" to go where the data is leading you. If you have a problem with his conclusions, then outline where he went wrong with his method rather than just hand-waiving him away based on nothing.

No, his studies show that these agreements don't pay off, even those in which the public retains ownership in the stadium. It's quite the claim to say someone doesn't have any knowledge just because you don't like their conclusions. If you read his work, it shows precisely what he states - the private companies get inflated valuations and heavily subsidized arenas at almost no cost. We are socializing the costs while privatizing the gains. It's not "bias" to go where the data is leading you. If you have a problem with his conclusions, then outline where he went wrong with his method rather than just hand-waiving him away based on nothing.

How are gains privatized? Seems like a bold claim, without actually knowing that the arena won't travel in the sale. Why would a group from Louisville give a rat's behind about an arena in OKC? There is no way to bind the team here, truly (money will always out, at a certain point). So an arena the team doesn't own doesn't privatize gains. The gains are more revenue for Thunder games, due to improved concessions, retail stores, etc within the arena. But they only benefit on Thunder items purchased and concessions on Game days.

Again, any other single event in that arena, the Thunder don't make a dime. And if they sold (which is when you realize any gains) the arena won't be figured in.

I truly want to know where these gains coming from an arena they don't own will come from.

How are gains privatized? Seems like a bold claim, without actually knowing that the arena won't travel in the sale. Why would a group from Louisville give a rat's behind about an arena in OKC? There is no way to bind the team here, truly (money will always out, at a certain point). So an arena the team doesn't own doesn't privatize gains. The gains are more revenue for Thunder games, due to improved concessions, retail stores, etc within the arena. But they only benefit on Thunder items purchased and concessions on Game days.

Again, any other single event in that arena, the Thunder don't make a dime. And if they sold (which is when you realize any gains) the arena won't be figured in.

I truly want to know where these gains coming from an arena they don't own will come from.

Because these arenas don't make back the money invested in them. This arena won't net $1b over 25 years, even with the revenue from concerts and non-Thunder events. Meanwhile, all the proceeds the Thunder make goes to their bottom line - they're not responsible for maintenance or other overhead for the venue. However, the venue will significantly increase their franchise value, allowing them to borrow against it and use that to make more money. In other words, the public will foot the bill for this while the only body making a profit from this will be the private franchise. That's what I mean by socializing the costs, and privatizing the gains. If you can show me that this arena will net $1b over 25 years, then I'll happily admit that I'm wrong in characterizing it in this way.

No, his studies show that these agreements don't pay off, even those in which the public retains ownership in the stadium. It's quite the claim to say someone doesn't have any knowledge just because you don't like their conclusions. If you read his work, it shows precisely what he states - the private companies get inflated valuations and heavily subsidized arenas at almost no cost. We are socializing the costs while privatizing the gains. It's not "bias" to go where the data is leading you. If you have a problem with his conclusions, then outline where he went wrong with his method rather than just hand-waiving him away based on nothing.

He stated that about THIS deal. He doesn't know that and doesn't care to know. If someone is so invested in their position that they are uninterested in even learning the facts of this deal before making aconclusion, then that simply is being biased,.

He took is a step further by making stuff up by saying "the private part will keep ALL the money". He doesn't know that.

Look, he could be some sort of mystical economic soothsayer and end up being right, but stating that as some sort of fact is discrediting, imo.

Now, if he's talking about the Milwaukee deal, fine, because pretty much the private part will be keeping ALL the money in that situation, both from arena operations and the district around it. But nothing at this point indicates that's what's happening here.

Because these arenas don't make back the money invested in them. This arena won't net $1b over 25 years, even with the revenue from concerts and non-Thunder events. Meanwhile, all the proceeds the Thunder make goes to their bottom line - they're not responsible for maintenance or other overhead for the venue. However, the venue will significantly increase their franchise value, allowing them to borrow against it and use that to make more money. In other words, the public will foot the bill for this while the only body making a profit from this will be the private franchise. That's what I mean by socializing the costs, and privatizing the gains. If you can show me that this arena will net $1b over 25 years, then I'll happily admit that I'm wrong in characterizing it in this way.

I mean, do most publicly-owned assets actually make money? Will Scissortail Park net its cost back? And the arena can and will continue to be used after that 25 years.

You can't treat government like a business. Sure, you are very much likely correct that the arena will lose money. But if it leads to people coming downtown and eating at restaurants, staying in hotels (stuff people do a lot going to shows in Tulsa that skip OKC for a plethora of reasons), then that indirectly helps the city. Some people might never come downtown, except for Thunder games. I know tons of people who make date nights out of the games, or date weekends (from out of town). So for the city, I can see it benefitting them far beyond $1 billion, over time, when you factor in other things like that. People normally aren't choosing between going to a game or going to Chicken n Pickle, it is more between a game or a night in. So they wouldn't automatically just spend that money elsewhere.

Is it perfect, no. But again, I don't think the gains, once sold, will be as great as people think. Because if this arena is factored in, any buyer will immediately reject buying something based off a lease, not owning the asset (I can't sell a leased car, can I?). So I want to see how said public asset benefits private owners valuations.

Yes, their income statement will look better, you are correct. I will agree with you there. But no one buys a franchise based off the income statement. As a CPA, it is the least important financial statement. Cash flows matter. And the Thunder owners don't get to factor in concert revenue in their valuation of selling price.

So maybe short-term, they get a gain, as their cash flow looks great. But when they truly go to sell, then buyers will scrutinize the heck out of their future cash flows, as they won't own the arena (since I doubt any group is buying them to keep them in OKC).

Maybe I just look at it differently than you do, as I am an accountant, so I see things through that lens.

What he doesn't mention is that, in the recent examples where the private part pays around half of construction the public part gets next to nothing. So, which is really a better deal?

I know he'd say "it all sucks". I just think he could probably make that argument without making stuff up. If you're starting from the position of these deals are always bad regardless of how they're structured or who gets what, then just say that and move on without misrepresenting what you actually know.

this is correct ...

I mean, do most publicly-owned assets actually make money? Will Scissortail Park net its cost back?

You can't treat government like a business. Sure, you are very much likely correct that the arena will lose money. But if it leads to people coming downtown and eating at restaurants, staying in hotels (stuff people do a lot going to shows in Tulsa that skip OKC for a plethora of reasons), then that indirectly helps the city. Some people might never come downtown, except for Thunder games. I know tons of people who make date nights out of the games, or date weekends (from out of town).

Is it perfect, no. But again, I don't think the gains, once sold, will be as great as people think. Because if this arena is factored in, any buyer will immediately reject buying something based off a lease, not owning the asset (I can't sell a leased car, can I?). So I want to see how said public asset benefits private owners valuations.

Yes, their income statement will look better, you are correct. I will agree with you there. But no one buys a franchise based off the income statement. As a CPA, it is the least important financial statement. Cash flows matter. And the Thunder owners don't get to factor in concert revenue in their valuation of selling price.

So maybe short-term, they get a gain, as their cash flow looks great. But when they truly go to sell, then buyers will scrutinize the heck out of their future cash flows, as they won't own the arena (since I doubt any group is buying them to keep them in OKC).

What differentiates this from, say, Scissortail Park, is that there's no analogous billion dollar private organization that gets to rent out the park 40 nights a year for free and then pocket everything those events generate, or whose value increases because of the construction of the park. And scale matters here as well. I would be very, very leery of dropping $1b on a downtown park (or really any individual civic project)

https://www.youtube.com/watch?v=XNpHHLMp6U0

Because these arenas don't make back the money invested in them. This arena won't net $1b over 25 years, even with the revenue from concerts and non-Thunder events. Meanwhile, all the proceeds the Thunder make goes to their bottom line - they're not responsible for maintenance or other overhead for the venue. However, the venue will significantly increase their franchise value, allowing them to borrow against it and use that to make more money. In other words, the public will foot the bill for this while the only body making a profit from this will be the private franchise. That's what I mean by socializing the costs, and privatizing the gains. If you can show me that this arena will net $1b over 25 years, then I'll happily admit that I'm wrong in characterizing it in this way.

Do all civics projects have to make a direct net operating profit?

and/or

Should all civics projects be structured so that no private entities profit directly nor realize an indirect asset valuation gain as a result?

You'll find a lot public projects where private entities contribute zero, yet realize gains from it. Unfortunately, you'll also find public projects that injure private entities. You can always argue from pure ideological position that adheres to a chosen economic -ism, but that doesn't exist in the real world, so you got to evaluate these things on their individual merit and not just copy and paste stuff.

What differentiates this from, say, Scissortail Park, is that there's no analogous billion dollar private organization that gets to rent out the park 40 nights a year for free and then pocket everything those events generate, or whose value increases because of the construction of the park. And scale matters here as well. I would be very, very leery of dropping $1b on a downtown park (or really any individual civic project)

For free? Man, you ALMOST had me. And any sales tax at those events goes to the city.

Sure, the lease is a good one for the Thunder. But having a major arena without an anchor tenant is a bad, bad look. But the lease they have and will have will help a ton in keeping them here. Any team in any city can leave, at any time, if they have the money.

Is there risk? Yes. But having the Thunder committed to this, and keeping them happy, lowers that risk significantly.

What differentiates this from, say, Scissortail Park, is that there's no analogous billion dollar private organization that gets to rent out the park 40 nights a year for free and then pocket everything those events generate, or whose value increases because of the construction of the park. And scale matters here as well. I would be very, very leery of dropping $1b on a downtown park (or really any individual civic project)

You don't think the park had any positive effect on surrounding properties, which contributed zero to the park? Maybe you're okay with it because you don't know their net worth?

You don't think the park had any positive effect on surrounding properties, which contributed zero to the park? Maybe you're okay with it because you don't know their net worth?

Those surrounding properties being valued more means they pay more property tax, so they're not "contributing zero" since taxpayer money paid for the park. The Thunder aren't paying property tax on the new stadium.

What differentiates this from, say, Scissortail Park, is that there's no analogous billion dollar private organization that gets to rent out the park 40 nights a year for free and then pocket everything those events generate, or whose value increases because of the construction of the park. And scale matters here as well. I would be very, very leery of dropping $1b on a downtown park (or really any individual civic project)

the thunder pay rent for every night they have the arena .. and then split all the concession revenue on top of that .. 2 mil a year +/- in rent and then the concession revenue split on top of that ..

Those surrounding properties being valued more means they pay more property tax, so they're not "contributing zero" since taxpayer money paid for the park. The Thunder aren't paying property tax on the new stadium.

Well, of course, they don't own it.

But, it seems like you're saying indirect revenue generated by arena operations via sales tax and potential property tax gains in surrounding commercial properties should be considered as a net positive factor when discussing civics projects like a new arena?

Got it.

The other way to recover the financing costs is to move up the timeline for generating revenue. If the revenue stream is enough to cover financing costs, then new taxes would presumably not be needed. If the revenue stream is more than the financing costs, then you'd be delaying the ROI by using the cash method and would effectively be losing money while waiting to raise the cash before starting construction.

Of course, the potential returns can only be estimated, and it seems that exactly how much the current arena generates and how much of that the city actually gets is a bit of a blind spot. IMO, this is one reason knowing lease terms might clear some of it up. Because if financing is involved, then we'd want to make sure that the city is getting at least as much participation in arena operations as would service the debt. I imagine that's why we see a bigger chunk of arena revenue going to ownership groups who contribute in the hundreds of millions for construction of a venue, because they have to have revenue to service that debt.

Of course, all of this is obviously a gray area without knowing the details of how any of it is structured, but, in theory, debt could be serviced by operational revenue instead of taxes.

The increased revenues from profit-shared elements of the arena will not hit $100M/year, let alone the profits. Additionally, in the current lease setup, which by all accounts will be the template for the new arena lease, PBC gets a percentage of sales (not profits) which means that only the city faces exposure to losses and profit margins have to be high in order to benefit the city. Raised ticket prices (which are almost a certainty if we get a new arena) only benefits PBC and would likely hurt the auxiliary sales that the city can benefit from.

With a new arena, yes, the city will make more money, but it will be a fraction of the interest costs.

Those same profits would be just as accessible 2 years later.

It is obvious that there are some who are enthusiastically against the Thunder, wealthy people, and public facilities that might not provide profit for the city. There are those that will approve any shiny new object. Thankfully, most of the citizenry is less emotional or dogmatic as the enthusiasts who argue in this medium. My guess is most of the regular citizens of the city won’t get caught up in self serving arguments and will just vote their feelings about it. I think it will pass about 60%. Most have seen what has been done in this city since MAPS and other initiatives have progressed as handled by the city, and they approve.

It is obvious that there are some who are enthusiastically against the Thunder, wealthy people, and public facilities that might not provide profit for the city. There are those that will approve any shiny new object. Thankfully, most of the citizenry is less emotional or dogmatic as the enthusiasts who argue in this medium. My guess is most of the regular citizens of the city won’t get caught up in self serving arguments and will just vote their feelings about it. I think it will pass about 60%. Most have seen what has been done in this city since MAPS and other initiatives have progressed as handled by the city, and they approve.

what has been presented represents a pretty significant departure from MAPS. And my guess is that most of the regular citizens of the city recognize that.

they certainly aren't idiots. and i doubt they enjoy eating sh*t sandwiches.

Is NSync getting back together?!?!

what has been presented represents a pretty significant departure from MAPS. And my guess is that most of the regular citizens of the city recognize that.

they certainly aren't idiots. and i doubt they enjoy eating sh*t sandwiches.

This will pass by a fairly large margin. They also realize this isn't a sh*t sandwich, like a vocal minority think it is. Most are more than ok with a high-quality, top-notch arena for $.01 per dollar.

what has been presented represents a pretty significant departure from MAPS. And my guess is that most of the regular citizens of the city recognize that.

they certainly aren't idiots. and i doubt they enjoy eating sh*t sandwiches.

How long have you lived in OKC?

How long have you lived in OKC?

Pretty much as long as I can remember.

Why won’t The Ownership Group say anything about this deal?

Can’t remember the last Oklahoman article that was free:

https://x.com/theoklahoman_/status/1709889175275606457?s=46&t=LOQXH1wn8XUerLzXZZnxMA

Pretty much as long as I can remember.

Why won’t The Ownership Group say anything about this deal?

Can’t remember the last Oklahoman article that was free:

https://x.com/theoklahoman_/status/1709889175275606457?s=46&t=LOQXH1wn8XUerLzXZZnxMA

From that article:


“If the city, in fact, puts in 95%, then they’re putting in much, much more than is typical,” Zimbalist said.

Fiserv Forum, which opened in 2018 and hosts the Milwaukee Bucks in Wisconsin, cost $524 million to build, but the Bucks ownership contributed $174 million, or 33%, toward the construction. The Little Caesars Arena in Michigan, home of the NBA's Detroit Pistons and the NHL's Detroit Red Wings since 2017, saw $539 million, or about 63%, of its $863 million construction cost privately financed. And in 2016, Sacramento's Golden 1 Center opened at a cost of $558 million, with the owners of the Sacramento Kings NBA team contributing an estimated $284 million, or about 51%, toward the arena construction.

Bradbury described the new OKC proposal as "one of the worst deals for a basketball arena that I've ever seen." He believes the current agreement with the Thunder is "a horrendous deal" with what he sees as no redeeming qualities.

Pretty much as long as I can remember.

Why won’t The Ownership Group say anything about this deal?

Can’t remember the last Oklahoman article that was free:

https://x.com/theoklahoman_/status/1709889175275606457?s=46&t=LOQXH1wn8XUerLzXZZnxMA

Good article.

what has been presented represents a pretty significant departure from MAPS. And my guess is that most of the regular citizens of the city recognize that.

they certainly aren't idiots. and i doubt they enjoy eating sh*t sandwiches.
Just curious of the departure? Approved canal, library, baseball park, civic center theater, arena, etc. None had private financing. None with a profitable proforma. All were quality of life projects. To you, apparently they were all sh.. projects. I doubt the public agrees.

Just curious of the departure? Approved canal, library, baseball park, civic center theater, arena, etc. None had private financing. None with a profitable proforma. All were quality of life projects. To you, apparently they were all sh.. projects. I doubt the public agrees.

I would be more amenable to voting “yes” if the project were structured like the projects you mentioned. But it is not.

Assuming there isn’t a recession during the collection period, 72 months of a 0.01 tax will yield roughly $1.5B.

600M represents a significant amount of cost overruns and interest payments, no? Show me another maps project that ended up costing 66% more than its budgeted value.

I would be more amenable to voting “yes” if the project were structured like the projects you mentioned. But it is not.

Assuming there isn’t a recession during the collection period, 72 months of a 0.01 tax will yield roughly $1.5B.

600M represents a significant amount of cost overruns and interest payments, no? Show me another maps project that ended up costing 66% more than its budgeted value.

I mean, that additional money will be used for future upgrades or capital maintenance, stuff OKC would be on the hook for. So you better hope they collect more than budgeted.

FAFO (you know what that stands for) - OKC is trying to find out just how easily a team can sell, and Louisville or KC or Seattle is going to crush any momentum OKC has.

Way to go, Daily Oklahoman. 1 chance it all we will get. Can't replace the Thunder, and we will be screwed going forward.

I mean, that additional money will be used for future upgrades or capital maintenance, stuff OKC would be on the hook for. So you better hope they collect more than budgeted.

No, it will mostly be paid to whatever bank is financing the project.

Fiserv Forum, which opened in 2018 and hosts the Milwaukee Bucks in Wisconsin, cost $524 million to build, but the Bucks ownership contributed $174 million, or 33%, toward the construction.

I'm always surprised when I see this one held up as a "good deal". There's extensive local reporting from the time in what I assume is their "alt weekly", Urban Milwaukee, much of which discusses the true costs to the city of the deal. Essentially, the city gave all direct revenue from the designated district to the team. So, while the team contributed more upfront, the city lost any way to service any part of its contribution through operations of the arena and much of the revenue from the district around it.

The net effect is that every bit of the actual cost to the city, which the Urban Milwaukee estimated at $800 Million after interest, subsidies, and tax breaks, must be paid for (taken from?) other projects and revenue sources, because it doesn't seem like it can come from arena operations. The owners get that. If all of that is true, that sounds like a horrible deal for the city, imo. It sounds like maybe the state got a good deal, with a pretty good return tied to an $80 million contribution, but the city gets no revenue tied to the arena outside of the $1MM / year lease payment from the the bucks.

Does that mean the deal with the Thunder is a good one or even a better one? I don't think I have the information to compare the two, but from what we do know they seem very different. It just seems ironic to me that if one is looking for deals that support the "city gets nothing, owners get everything" model, Milwaukee is it. Yet, it's held up as a "this is what good owners do" example, simply because of the front end contribution, even though they're getting much much bigger portion of the "everything" from the arena. Sure, if the Thunder get the Milwaukee deal for $50MM, it's a "horrendous deal" for the city. It seems like a horrendous for the 33% the Bucks contributed, too. IMO, for the bucks deal sounds more like they de facto own and operate the arena but only paid 1/3 of its construction.

Obviously, many people are dismissive of what the city actually gets from the asset it's building and just want to see the anchor tenant pay more upfront, regardless of their back end. I just feel that no civics project should sell off all its operations from any publicly built asset to any one private entity that didn't fully pay for that asset. IMO, that is what socializing risk and privatizing profit actually looks like, because potential profits are wholly granted to the private entity and the city has no revenue from the asset itself to service its contribution. It guarantees that it that comes from the public for the entirety of the agreement.

I honestly haven't decided yet, but I basically don't want the public to participate and it effectively end up wholly being the Thunder's arena like these other deals. I guess that's the simplest way to say it and I'll just leave it alone unless and until we actually find out more of how it's going to be structured. Unfortunately, too much of all of this is just conjecture and projecting other deals onto this one at this point, as if we know they'll be the same on the back end.

I'm always surprised when I see this one held up as a "good deal". There's extensive local reporting from the time in what I assume is their "alt weekly", Urban Milwaukee, much of which discusses the true costs to the city of the deal. Essentially, the city gave all direct revenue from the designated district to the team. So, while the team contributed more upfront, the city lost any way to service any part of its contribution through operations of the arena and much of the revenue from the district around it.

It's a huge assumption that the City MAKES money off the arena and development.

With the Paycom Center, the City of OKC owns it but also owns all the related expenses. Based on reports forwarded to me by a member of City Council, it appears the City loses money on Paycom and then has to provide millions out of the City's general fund. It's difficult to get straight answers on this as the numbers are buried deep in the City's budget and not separated out in a way that makes it easy for an outside party to report.

So, it is likely that the City loses money by owning the arena, making the Milwaukee deal look even better for taxpayers in comparison, not worse. And this doesn't even take into account the millions and millions the taxpayers continue to pour into Paycom which is funded through sales tax (subsequent MAPS): scoreboard, seating, and tons of other improvements.

I don't think it's a coincidence that those openly campaigning for the arena (like Mayor Holt) -- who also know the real numbers behind arena operating costs -- haven't mentioned whether there is a net income or loss from our current arrangement or the same for future projections. You have to know that if there was profit, they would be including it in their completely one-sided presentations. The fact they never mention this is very telling.


And remember, the Cox Center is viewed as a liability, thus the rationale for signing a deal with Prairie Surf where the City is losing a substantial amount of money.

It also looks like Paycom will be razed once the new arena is ready to go, so what is the value to the City of owning these structures? The land is valuable, but not the improvements. In fact, they are a liability as there is great trouble, disruption, and expense to have them demolished.

The City would probably be way better off NOT owning the arena and just ground-leasing the property to the owners, even if we end up kicking in several hundred million $.

So the OKCTalk consensus seems to be voting no on this. And by 2025, the Thunder will be in Seattle or Louisville or KC. Sometimes, when owners make threats, you have to believe them. OKC needs the Thunder a whole heck of a lot more than they need OKC. Especially now that the future looks bright for their roster.

Can't call a bluff from a position of no leverage or weakness, which OKC is in. Seattle tried and failed, even from a position of strength.

Maybe I am one of the few who sees the intrinsic and intangible value the Thunder bring to the city and state. Oh well.

Because there is almost no way there will be a second deal offered with more private money. This is very likely a take it or we're leaving deal. Which sucks, but that is what you get when you are a middle of the road city without a ton of positive momentum, overshadowed by almost pig-headed state leadership, with no corporate relocations coming to bring new citizens in. This is almost all OKC has to brag on a national scale about. People in Des Moines will know the Thunder. May not know players, but they know they are an NBA team. They wouldn't know anything else about OKC, aside from someone bombed a building here 28 years ago (might not even know that).

Tangent and rant over. Just know that these owners have very likely already had numerous calls from potential buyers, and are waiting for the vote results to decide when, or if, they call back. They could sell them tomorrow, I would imagine, if they wanted.

So the OKCTalk consensus seems to be voting no on this.

I never take a position on public votes.


However, it's a very scary thing that many people in OKC see open discussion about spending well over $1 billion in tax money as akin to not wanting NBA basketball here.

I never take a position on public votes.


However, it's a very scary thing that many people in OKC see discussion about spending well over $1 billion in tax money as akin to not wanting NBA basketball here.

I appreciate your reporting on the subject.

And yes, I wish the owners were contributing more. But the fact they aren't is my proof for them having already talked to buyers, and are simply a return phone call away from having the particulars on a sale done in 23 hours (after a quick 1 hour call).

So, unfortunately, with no leverage, it is that simple. OKC can't walk and have other wealthy people buy a team. These are many of the wealthy Oklahoma City people who are contemplating sale. Milwaukee at least had the Brewers to help add some muscle to their negotiations. Who does OKC have? The Dodgers. Not even a major college team, unfortunately.

It is always nice operating from a position of having the leverage. So it is a + b = c, in this case.

Well, unfortunately, with no leverage, it is that simple. OKC can't walk and have other wealthy people buy a team. These are many of the wealthy Oklahoma City people who are contemplating sale. Milwaukee at least had the Brewers to help add some muscle to their negotiations. Who does OKC have? The Dodgers. Not even a major college team, unfortunately.

It is always nice operating from a position of having the leverage. So it is a + b = c, in this case.

This is just an argument based purely on fear and misinformation.


It would be a huge deal for Milwaukee to lose the Bucks; I was born there and have tons of family in Wisconsin.

This is just an argument based purely on fear.

It would be a huge deal for Milwaukee to lose the Bucks; I was born there and have tons of family in Wisconsin.

It would be a huge loss, but not as big as OKC losing the Thunder, on a pro rata basis, IMO. OKC has embraced the Thunder and they are very much engrained in the city. If they left, a lot of civic pride goes, as well, IMO.

People normally aren't choosing between going to a game or going to Chicken n Pickle, it is more between a game or a night in. So they wouldn't automatically just spend that money elsewhere.

But thats exactly what happens. If people didnt spend money on going to Thunder games, they would spend it on other entertainment and going out. Its not as if people would just stash all their thunder money away under their bed and never spend it, or only spend it outside of OKC. Im a thunder season ticket holder, and if they werent here I would simply spend that money elsewhere.

I'm glad someone is asking the questions. I mean I want to vote yes because I want to keep the Thunder. But at the same time these types of decisions have generational impact and just because I want to watch the Thunder in my city, doesn't mean that future generations will feel the same way. I think that's the give and take with living in a society.

It would be a huge loss, but not as big as OKC losing the Thunder, on a pro rata basis, IMO. OKC has embraced the Thunder and they are very much engrained in the city. If they left, a lot of civic pride goes, as well, IMO.

If Milwaukee were to lose the Bucks, it would be felt just as much.

The Bucks have been there far longer than the Thunder in OKC and Milwaukee is seen as a shrinking Rust Belt city. Losing a long-held NBA franchise would be devastating and would contribute strongly to the outside perception it is a dying community, which would also impact how the city is regarded by local citizens.


It's easy to say the Thunder somehow means more to OKC when you don't live in Milwaukee. There are people there who have been die-hard Buck fans for over sixty years. Also, the winters in Wisconsin are brutal and the Bucks provide much-needed vitality and a reason to go downtown.

These are the operating costs (loss) regarding Paycom Center and the City of OKC. These were forwarded to City Council by Craig Freeman, the City Manager. The document and footnotes were compiled by the City's Finance Department.

The reason you haven't seen this before is that the numbers are buried in various categories in the City's annual budget. I was told it took repeated requests before this analysis was performed and shared.

What this shows is that the net loss to the City is over $7.5 million for fiscal year ending June 2023. They list sales tax revenue of $2.2 million per year but that would accrue to the City regardless of who owns the arena. Also, that $7.5 million reflects a big bonus from ASM, far higher than budgeted, which implies the City did not get that amount in previous years which would push annual cost to the City close to $10 million.

The reason you don't see Thunder lease numbers is because that is paid to ASM, which operates the arena. The Thunder pays ASM about $40,000 per home game. The Thunder gets all ticket revenue from their games and then about 40% of concessions; ASM gets the remainder. The Thunder only gets about 10% for clubs and restaurants; 15% from bars.

The City pays for all capital improvements and maintenance.

As for the naming rights, the Thunder have the right to negotiate that. The amount paid by Paycom was never made public but previously Chesapeake was paying $3 million per year.

You can see below, the City is only receiving $508,396 per year for the naming rights. We know the NBA takes 50% for revenue sharing, but there is no way Paycom is only paying $1 million per year, which would be 1/3rd what Chesapeake had been paying in earlier years. I suspect ASM gets a chunk of that as well, which is why the City's share is so low.

So, taking the $7.5 million loss per year, that adds up to $113 million over the original 15-year lease with the Thunder. The Thunder have the right to exercise five options of 3-years each. We are currently in one of those option periods.


As far as I know, this net loss to the City to operate Paycom has never been mentioned in public. Holt has stated the agreement for the new arena would closely resemble the current deal. So, it's fair to say the City will continue to take a loss, and since it is currently $7.5 million a year and the term is to be 25 years, that's a ton of money; especially when we are being told $50 million from the owners is 'significant'.


HTTP://www.okctalk.com/images/pete/paycomloss2.jpg

These are the operating costs (loss) regarding Paycom Center and the City of OKC. These were forwarded to City Council by Craig Freeman, the City Manager. The document and footnotes were compiled by the City's Finance Department.

The reason you haven't seen this before is that the numbers are buried in various categories in the City's annual budget. I was told it took repeated requests before this analysis was performed and shared.

What this shows is that the net loss to the City is over $7.5 million for fiscal year ending June 2023. They list sales tax revenue of $2.2 million per year but that would accrue to the City regardless of who owns the arena. Also, that $7.5 million reflects a big bonus from ASM, far higher than budgeted, which implies the City did not get that amount in previous years which would push annual cost to the City close to $10 million.

The reason you don't see Thunder lease numbers is because that is paid to ASM, which operates the arena. The Thunder pays ASM about $40,000 per home game. The Thunder gets all ticket revenue from their games and then about 40% of concessions; ASM gets the remainder. The Thunder only gets about 10% for clubs and restaurants; 15% from bars.

The City pays for all capital improvements and maintenance.

As for the naming rights, the Thunder have the right to negotiate that. The amount paid by Paycom was never made public but previously Chesapeake was paying $3 million per year.

You can see below, the City is only receiving $508,396 per year for the naming rights. We know the NBA takes 50% for revenue sharing, but there is no way Paycom is only paying $1 million per year, which would be 1/3rd what Chesapeake had been paying in earlier years. I suspect ASM gets a chunk of that as well, which is why the City's share is so low.

So, taking the $7.5 million loss per year, that adds up to $113 million over the original 15-year lease with the Thunder. The Thunder have the right to exercise five options of 3-years each. We are currently in one of those option periods.


As far as I know, this net loss to the City to operate Paycom has never been mentioned in public. Holt has stated the agreement for the new arena would closely resemble the current deal. So, it's fair to say the City will continue to take a loss, and since it is currently $7.5 million a year and the term is to be 25 years, that's a ton of money; especially when we are being told $50 million from the owners is 'significant'.


HTTP://www.okctalk.com/images/pete/paycomloss2.jpg

Holy smokes, thank you Pete for tracking that data down! That is exactly the data I've been asking for for the last couple of weeks and, wow, that is quite the loss. And last year was apparently a good year given that "largest surplus ever." Even if the new arena brings in bigger acts, it's unlikely to make that up, and that's not even counting increasing interest costs for a more expensive arena. Turns out that owning the arena isn't quite the windfall or source of revenue some thought it was. This makes the deal even worse, something I didn't think was possible.

edit: \/\/\/\/ given that last year produced the highest surplus in arena history, it's unlikely that those years would show a profit