Venue Detail
Oklahoma City Thunder
RSV Pro Facilities Report
February, 2016
Oklahoma City Thunder
211 N. Robinson Ave., Ste 300 Oklahoma City, OK 73102 Phone: 405-208-4800 URL: www.nba.com/thunder Owner: Investor group led by Clay Bennett League: National Basketball Association, Western Conference, Northwest
Venue
Chesapeake Energy Arena, 100 W Reno, Oklahoma City, OK 73102 Owner: Oklahoma City Managed by: SMG Facility Management Built: 2002 Capacity: 19,675 Permanent concession stands: 18 Concessionaire: Savor Suite caterer: Savor Soft drink: Pepsi Cola
Naming rights
Sold to: Chesapeake Energy Price: $36,000,000 Term: 12 years Expires: 2023
Ticket prices
Season tickets range from $430 to $6,880 Single tickets range from $120.00 to $300.00
Attendance
2013 average attendance: 18,203 2014 average attendance: 18,203
Suites
Quantity: 36 Term: 3 to 10 years Price: $150,000 to $350,000 Seats: 16 to 18 Includes: Tickets.
Club seats
Quantity: 3,300 Term: 1 to 5 years Price: $3,225 to $5,300 Includes: The price shown is for the annual seat license. Tickets are extra.
Financing
The $250 million venue is 100 percent publicly funded from a new regional sales tax.
In 2011 naming rights were sold to Chesapeake Energy and the building got a new name.
The building opened as the Ford Center in a deal with local auto dealers, but it became too expensive once the building acquired the NBA Thunder.
The original naming rights deal provided $5.05 million a year over 10 years with the option to pay $2.715 million more if the deal is extended to 15 years. Cars were supplied for facility operations and promotion for a $366,000 value over 15 years.
In addition to the name, the auto dealers got a luxury suite, 30 club seats, parking, signage, advertising and lobby space where they could display cars. The bid was higher than originally expected.
SMG's overall agreement gave the company 7 percent of the first year of naming rights revenue, which it will also help negotiate, then 5 percent of the earnings for each subsequent year. SMG gets 5 percent of the net premium seating sales, including suites.
The new 12-year deal is worth more than $36 million with $3 million paid the first year and the amount increasing three percent annually.
The city will continue to receive $409,000 a year plus an escalator amount tied to the Consumer Price Index. The amount the city receives is based on its original naming rights contract with Oklahoma Ford Dealers.
The Thunder was purchased in 2006 by a group of businesspeople from Oklahoma City leading to speculation that the team would be moved to the city that welcomed the New Orleans Hornets when the team was forced to relocate because of Hurricane Katrina. That concern became a reality in 2008 when the team moved to Oklahoma City.
The Oklahoma City businessmen saw crowds fill the Ford Center while the Hornets played there temporarily when they were forced to leave New Orleans. The group, called the Professional Basketball Club, also arranged the Hornets’ stay in Oklahoma City.
Oklahoma City Manager Jim Couch said the city expects to at least break even financially on the deal and could generate as much as $150,000 in additional revenue.
The Thunder pay $1.6 million in annual rent and $100,000 annual rent for a practice facility the city will build as part of a recent sales tax initiative. Voters approved a 1-cent sales tax extension that will pay for the $20 million practice facility and about $101 million in improvements to the Ford Center.
Those improvements began in 2009. The most significant addition is 48 loge boxes, four- and six-seat areas on both ends in the club sections.
The loge boxes seat six or eight fans and are available for year-round entertainment. For the same price as an eighth row Thunder courtside level season ticket, loge boxes – at prices of $12,375 per seat (in six-seat boxes) or $14,045 per seat (in four-seats boxes) – include tickets to most major concerts, family shows and all Thunder games.
The most lavish addition was 11 bunker suites, many purchased by the Thunder organization's founding partners. Bunker suites are private areas in the ground-level hallways.
Another feature is hydraulic systems being installed on the first few rows on both sides of the court and at both ends. Hydraulics will push seats below the floor, allowing Ford Center officials to easily reconfigure the arena from NBA games to Blazers hockey games and concerts.
The renovations are the second of three phases. Minor alterations were made before the Thunder's inaugural season.
The final phase, in the summer of 2010, used the remaining $54 million to add 300,000 square feet to the building. The biggest items were a new grand entrance on the southwest corner and even more space added to the Thunder's locker room.
The agreement also calls for the team to pay $409,000 a year for naming rights, which is the same amount the city is set to receive from local Ford dealers, absent any agreement with an NBA team. That deal expired and the venue reverted to the name Oklahoma City Arena.
The team would keep any revenues from naming rights above that amount. A clause in the arena's naming rights deal allows for renegotiation if an NBA or National Hockey League team agrees to play at the venue.
The city and the team would share revenues from concessions, clubs and restaurants.
The lease will run for 15 years with three additional 5-year options.
On concessions, team owners receive 40 percent of the first $2.5 million, 42.5 percent of the next $2.5 million and 45 percent of the balance. On suite food and beverage service, owners receive 25 percent of the first $1.25 million, 27.5 percent of the next $500,000 and 30 percent of the balance. Owners also would receive 10 percent of club and restaurant revenue and 15 percent of bar revenue.
Team owners have the right to terminate the agreement after six years if ticket revenues for two consecutive years drop below 85 percent of ticket revenues generated during the first two full seasons following completion of arena renovations. If that happens, owners would be required to pay the unamortized cost of arena improvements made for the NBA and could be required to pay the fair market value of the practice facility.
The Blazers moved into the new 18,500-seat arena in 2002. The Blazers pay $2,500 per game rent for weekday matches and $3,000 for those on Fridays and Saturdays.
Pepsi-Cola purchased pouring rights for a reported $1 million over 10 years. The deal was negotiated by SMG, which manages the facility and gets 15 percent of the rights deal. SMG also gets $125,000 per year to manage the building.
In addition to the soft drink concession, Pepsi gets scoreboard signage, video advertising and some club seats. Pepsi also leases one of the building's luxury suites. (Basketball, Facilities, NBA, Professional Sports, Venue)