Author: Joseph Rozier III
Affiliations: United States Sports Academy
Corresponding Author:
Joseph R. Rozier III
Doctoral Student
United States Sports Academy
One Academy Drive
Daphne, Alabama 36526
[email protected]
251-626-3303
Joseph Rozier III is currently a student at United States Sports Academy pursuing his doctoral degree in the field of sports management.
Organizational Expansion within Professional Sports
INTRODUCTION
As the popularity of professional sports continues to increase from year to year, commissioners, team owners, and other investors within professional sports leagues are continuously analyzing regional and international community markets to expand the league and his/her overall professional brand. The National Basketball Association (NBA) is currently one of the most recognizable and economically profitable professional sports leagues throughout domestic and international territories. It is due to this success, members of the NBA’s governing body are constantly analyzing the expansion of the NBA into new and former communities, regions and territories. Local and regional community support and the potential for business development opportunities, are essential external components which contribute to the possibility of expansion into a particular region. This paper is intended to review or analyze the positive and negative economic and social influences of the NBA’s potential decision for new expansion or relocation of another professional NBA franchise back into the Seattle, Washington community.
REVIEW OF LITERATURE
Socioeconomic Status of the National Basketball Association
Over the past several decades, especially within the last ten years, the NBA continues its professional economic and social progression within a rate in which many analysts within athletic communities believe will surpass the current socioeconomic prominence of the National Football League (NFL) within a few years. Currently, NBA franchises are achieving financial success and social popularity within numerous demographics at an astonishing percentage, while owners are observing significant increases regarding the valuation of his/her respective franchise. According to a recent business article within Forbes Business (1), economic resources revealed there are currently eight NBA franchises which are worth in excess of $2 billion, with the New York Knicks ranked first with a valuation of $3.6 billion, and every other franchise within the league experiencing a current valuation of at least $1 billion. Furthermore, in reviewing the valuation of the top ten NBA franchises, each of the ten franchises generated an increase in valuation between 2016 and 2017, with the Houston Rockets franchise increasing their respective valuation at an astonishing 33% during this one-year period (1). Additionally, several expansion franchises, which relocated to another metropolitan region, noted significant increases regarding their respective franchise valuations within the past decade.
When reviewing the current socioeconomic aspect of attendance and viewership regarding the NBA, numerous NBA analyst and sports columnist agree the socioeconomic status and popularity of the current NBA is at an unprecedented high and is expected to continue substantial socioeconomic success within the foreseeable future. After completion of the 2016-2017 NBA season, official fan attendance reports (2) released by NBA officials revealed the 2016-2017 established an all-time record for regular-season fan attendance (21,997,412). This marked the third straight season in which the NBA fan attendance record was broken, and the 13th straight season in which attendance was over 90% throughout each of the respective thirty NBA franchises. In addition to attendance increasing over recent years, viewership regarding NBA games are increasing at a significant rate. In 2016, the NBA came into agreement with Turner broadcasting and ESPN/ABC broadcasting for a lucrative television broadcasting rights contract worth $24 billion (3). Throughout the initial year of the lucrative contract viewership revealed astonishing numbers. According to the Nielsen report, a national research measurement system which verifies television audiences for specific programs, viewership between the major NBA broadcasting networks increased 32% during the 2016-2017 season, the highest rating for NBA viewership since 2010-2011. The opening night of the 2016-2017 NBA received an overwhelming increase in viewership ratings within TNT broadcasting, up 46% from the previous year (4).
The current socioeconomic status of the NBA brand has also increased significantly within international sports markets over the past two decades especially within the Chinese sports markets. The popularity of the NBA in China intensified significantly when Yao Ming became the first prominent Chinese basketball player to be drafted into the NBA in 2002. Since that time NBA relations within social media, television broadcast, and the overall NBA brand continues to expand tremendously within international sports markets. Within a research report conduct by Lianhjun Zhou and colleagues in 2017, a conducted survey completed by the NBA officials regarding the interest of the league among Chinese men between the ages of 15-24, revealed 83% of those individuals surveyed were fans of the NBA, with 40% of those individuals stating basketball as his favorite sport. Furthermore, within the NBA’s official Chinese website, there are approximately 8.6 million registered fans which follow the NBA through this specific social media website (5). Additionally, broadcasting rights within the Chinese and other international markets continues to provide international financial and social stabilization for the NBA brand. Within the Chinese television market, approximately 690 million viewers tuned in to watch NBA broadcast during the 2014-2015 season. The capability for the NBA to expand into Chinese media outlets stems from a broadcasting streaming agreement between the NBA and the Chinese internet service company Tencent, an agreement worth $500 million (5).
In addition to the Chinese sports markets, the NBA has expanded its socioeconomic success into London and Mexico sports markets. In recent years the NBA has participated in several regular season games in both London and Mexico City, which has drawn sellout crowds within each of the NBA events. Current NBA Commissioner, Adam Silver, continues to be optimistic regarding the NBA’s future of placing an expansion franchise within an international sports market within the foreseeable future, with Mexico City potentially leading the efforts. Yet, until franchise expansion of the NBA brand becomes a realization within international sports markets, there are domestic cities which are vying for a position within NBA expansion, including the resurgence of a NBA franchise back into the Seattle, Washington region.
Recent National Basketball Association Franchise Expansion/Relocation
The New Orleans Pelicans (New Orleans, Louisiana) are one of the NBA expansion franchises which was established when owner, George Shinn, of the Charlotte Hornets (Charlotte, North Carolina) decided to relocate the franchise before the 2002-2003 season. Throughout the first ten years in the league, the franchise had struggled financially and many NBA analyst and economist where skeptical as to whether or not the franchise would survive in the New Orleans region. Yet, since 2012, when the team was sold for $338 million, the valuation of the franchise has steadily increased with a current valuation of approximately $1 billion according to annual valuation statistics within Forbes Magazine (6). The increase in valuation can primarily be attributed to new ownership investing in trades for superstar athletes and obtaining superstar athletes through the NBA draft, which in turn increased the overall competitiveness of the franchise and increased fan interest.
Another expansion franchise which has increased its respective financial valuation since relocating to Brooklyn, New York, are the Brooklyn Nets. The Brooklyn Nets, known previously as the New Jersey Nets, originally played in New Jersey for over 30 seasons before relocating to Brooklyn, New York at the beginning of the 2012-2013 season. In 2015 previous owner of the Brooklyn Nets, Mikhail Prokhorov, purchased the franchise with a valuation of approximately $825 million. During Prokhorov’s short tenure as the majority owner of the Nets franchise, the valuation of the franchise escalated substantially. According to Badenhausen’s report (2018), Prokhorov recently sold 49% of the Brooklyn Nets franchise, with an option to become majority owner in 2021, to Joseph Tsai. The valuation of the Brooklyn Nets during the time of the recent sell was noted to be $2.3 billion, ranking the franchise sixth in valuation amongst the other twenty-nine NBA franchises, even though the team has continuously performed subpar since 2015 (7).
When analyzing the most successful NBA expansion franchise to relocate into another metropolitan region over the past decade, few NBA analyst or economist would argue against the Oklahoma City Thunder franchise being ranked first. The socioeconomic accomplishments of the franchise within the NBA and the Oklahoma region, has exceeded expectations since the franchise relocated in 2008. The Oklahoma City franchise came into existence when the ownership of the Seattle Supersonics (Seattle, Washington) sold the franchise in 2006 to current Thunder owner Clay Bennett (8). Although the Supersonics were known as one of the longest tenured franchises within the NBA, financial declines, insufficient collaboration between Bennett and local Seattle city council to finance and invest in the renovation of KeyArena, and decreased attendance throughout the late 1990’s and early 2000’s, were complementing factors which initiated Supersonics ownership to pursue opportunities to relocate the franchise. Unfortunately for previous Supersonics ownership and the Seattle community, the abundance of franchise uncertainty and patience to anticipate the significant socioeconomic influence in which the franchises young athletic talent would eventually generate, became a disheartening realization as the Oklahoma City franchise continues to financially and socially flourish since the relocation occurred. The Supersonics acquired both Kevin Durant (2007) and Russell Westbrook (2008), which are almost certain to be NBA Hall of Fame inductees, through the NBA Draft before the relocation to Oklahoma City was finalized; yet, the promising duo were not enough to keep the franchise in Seattle. Durant played only one season with the franchise, while Westbrook never played in Seattle due to the timing of the Supersonics relocation to Oklahoma City.
Clay Bennett along with his group of investors purchased the Supersonics for $350 million in 2006, although the Supersonics valuation was estimated to be millions less at the time of purchase (8). Yet, Bennett’s business venture has profited significantly since relocating the Seattle franchise to Oklahoma City. According to current NBA franchise valuations (7), the Oklahoma City Thunder valuation is estimated at $1.225 billion, ranking the franchise eighteenth amongst the 30 NBA franchises. It is truly unfortunate a majority of the Seattle community lost confidence in the Supersonics franchise, because just one year later the Oklahoma City economy flourished due in large part to the immediate success of Thunder franchise. Since the time in which the Supersonics ownership announced the intents to relocate the city, numerous investors have proposed ideas for an expansion team to return to the Seattle region. While current NBA Commissioner, Adam Silver, has been willing to listen, he has not made any guarantees but has made it known that Seattle is one of the regions on top of the NBA’s list once expansion discussions resume between NBA officials and current NBA franchise owners.
Justifying the Return of the National Basketball Association to Seattle
Public Support
As the Supersonics played in Seattle for over forty years, the team always maintained somewhat of a loyal fan base. It was the fan base which actually blamed Supersonics ownership and community officials for allowing the Supersonics to relocate, instead of capitalizing on the potential future growth which the franchise could eventually bring to the region, similar to what the franchise has provided to the Oklahoma City local and regional communities. Even amidst the finalization of the Supersonics relocation to Oklahoma City, approximately 3,000 Supersonics fans attended a “Save Our Sonics” rally at a Seattle federal courthouse to oppose the move of the franchise (8). Small market NBA franchises such as the Seattle Supersonics and Oklahoma City Thunder rely profoundly on support from local, regional, national, and in some circumstances international fan support, to justify maintaining a professional sports franchise within small markets.
In recent years the Seattle fan base has demonstrated tremendous support toward the cities other major professional sports franchises, which many sports analyst and columnist within the Seattle region believe would transition toward a new NBA expansion franchise. The Seattle Seahawks of the NFL, continues to produce sellout crowds for home games. According to the Seahawks website, 2017 was another sellout year for Seahawks home games, which included posting a 99% renewal rate from ticket holders during the previous season (9). The regular-season ticket sellout continues an annual trend for the franchise which began after the Seahawks won the NFL Super Bowl in 2013. Additionally, two other professional sports franchises are doing well with attendance and community support within the Seattle region. The Seattle Mariners, which is the region’s Major League Baseball (MLB) franchise, continues to generate positive fan support throughout the MLB season. Over the previous decade spectator attendance at Mariners home games continues to be steady, with statistics disclosing Mariners fan attendance ranking near the middle in overall attendance when compared to the other twenty-nine MLB franchises during this time frame. The other professional franchise, the Seattle Sounders, which is the Major League Soccer (MLS) affiliate, continues to have significant spectator support throughout the Seattle region. Although currently ranked second in overall MLS attendance during the 2017 season, in 2015 the Sounders were at the top of the league in attendance with an average of 44,247 spectators according to the MLS official website (10). Ticket renewals also remain steady, with the franchise averaging approximately 32,000 to 35,000 ticket renewals for the 2017 season.
In comparing a similar justification of spectator support for a new NBA franchise within the Seattle region, the NBA’s women’s affiliate, the Women’s National Basketball Association (WNBA), currently has a WNBA franchise (Seattle Storm) within the Seattle region which has continued to progress well throughout its tenure within the league. According to the official WNBA website, the WNBA observed numerous record breaking accomplishments during the 2016 season which included; highest overall attendance since 2011 (1,561,530), viewership increased by 11%, and merchandise sales from the official WNBA Store website were up 30% from the previous year, with a member of the Seattle Storm (Breanna Stewart) leading the way in WNBA jersey sales (11). Spectator attendance and community support for the Storm franchise has remained high within the region, especially after the Storm won WNBA’s Championships in 2004 and 2010, with an average attendance of over 7,000 fans per home game in 2017 (ranked 6th in the WNBA). The success of the Storm along with the support from the local and regional Seattle community, continue to present a significant justification into bringing the NBA back to Seattle.
For professional athletic franchises located along the west coast of the United States, spectator support is not only significant from a domestic viewpoint, but international support is increasing each year, especially within the Chinese and Japan international markets. For professional franchises such as the Seattle Storm, international support within the Asian population has increased due in large part to the acquisition of former Women’s Japan Basketball League (WJBL) star, Ramu Tokashiki. Tokashiki had a successful rookie year in which she placed fourth in WNBA Rookie of the Year balloting (12). With an Asian population rate of approximately 14%, according to Seattle government statistics (13), there is the unique opportunity for Asian American and international Asian communities to support a member of their respective culture within an NBA franchise. If a potential Seattle based NBA franchise could capitalize on the support of the Asian community, it could be tremendous for the overall socioeconomic progression of the franchise, similar to the way in which the Golden State Warriors (Oakland, CA) has steadily increased its popularity with domestic and international Asian communities. The warriors have become one of the most popular NBA franchises within the Asian community. A majority of the relationship between the franchise and Asian community is established through opportunities in which the Warriors travel to China and Japan to participate in international NBA games and by recognizing the Asian community during home games (wearing Asian inspired uniforms throughout the season).
Corporate Sponsorship Outlook
According to numerous economic research reports, the state of Washington, particularly the city of Seattle, ranked first in the nation when analyzing business opportunities and economic progression in 2017. With the headquarters of well-known corporations such as Amazon, Costco, Boeing, and Starbucks, within the Seattle, Washington region, economic development increased at a rate of 3.7% in 2016, nearly three times above the national rate (14). One unique concept adopted by the NBA starting the 2017-2018 season which would be advantageous to a proposal regarding the expansion of an NBA franchise back into the Seattle region, is that of corporate sponsorship advertisement on respective franchise uniforms. The new advertisement option provides each respective NBA franchise an opportunity to increase potential revenue streams and is expected to generate approximately $100 million into the league (15). With the abundance of nationally and internationally known corporations which have their respective headquarters located within the city of Seattle, coinciding with the substantial business progression within the region, the ability to obtain corporate sponsorships should be promising for a new Seattle based NBA franchise.
In reviewing similar corporate sponsorship opportunities for professional sports franchises within the Seattle region, beginning in 2009 franchises within the WNBA decided to utilize the concept of placing corporate sponsorship logos on respective team uniforms to increase revenue opportunities. The current Seattle Storm franchise has capitalized financially through the utilization of corporate sponsorship logos on uniforms and official team merchandise. Currently, the Storm franchise has exclusive corporate sponsorship agreements with Verizon Communications and Swedish Medical Center, which the logos of both corporations are located on the front of both home and away uniforms of the Storm. The Verizon sponsorship is part of a WNBA league-wide sponsorship while the Swedish Medical Center sponsorship is the largest individual sponsorship agreement throughout the history of the Seattle Storm franchise (16).
When speculating the possibilities for corporate sponsorships for a Seattle NBA franchise, take in consideration the corporate sponsorship agreement in which the Cleveland Cavaliers franchise currently has with the Goodyear Tire & Rubber Corporation to display the Goodyear logo on the front of the Cavaliers uniforms. Although the terms of the agreement between the Cavaliers and the Goodyear Corporation are not completely disclosed to the public, reports have surfaced through various economic research outlets suggesting the agreement is worth approximately $7 million to $10 million per year towards the Cavaliers annual team revenue, and approximately over $20 million annually from advertisement for the Goodyear Corporation (17). Therefore, if the NBA were to grant Seattle another NBA franchise, there is no reason to believe that prominent corporations such as Amazon, Boeing, or Starbucks, would have the capability to establish similar sponsorship agreements and provide additional revenue streams to the Seattle franchise.
Community Revitalization
The overall presence of a professional sports organization has the potential to make a significant positive impact to the overall quality of the respective local community and immediate surrounding region. Newly designed state of the art sports arenas can increase the quality and value of local business properties around the arena as well as residential properties within surrounding communities. In the case of the Seattle Supersonics, the primary reason for the Supersonics relocation in 2008 was due to the decision from local government officials not to financially support the renovation efforts of KeyArena, which would provide local fans and tourist with a state of the art arena, a principal component which has become an increasing standard for current NBA franchises. Yet, recent circumstances have provided a positive outlook regarding the acceptance of renovation proposals of KeyArena by local government officials, while providing substantial optimism for community and regional proponents of an NBA franchise returning to the Seattle community sooner than some local economic analyst expected.
As it seems extremely promising the NHL will be expanding into the Seattle region, the Oak View Group (OVG), which is the group of investors responsible for attempting to establish an NHL within the city of Seattle, have publicly stated their respective aspirations to also bring an NBA franchise back to Seattle. According the Geoff Baker (2017) of the Seattle Times news, the OVG group was recently granted the $600 million renovation project proposal of KeyArena by local city council. Upon completion of the project, KeyArena will be the home of the proposed NHL expansion franchise, the Seattle Storm (WNBA), and hopefully the future home of an NBA franchise. In addition to the renovation proposal, the OVG group has promised to assist with community revitalization efforts which would contribute an additional $40 million toward traffic and parking renovations around the arena, as well as a donation of $20 million to local Seattle charities (18).
A critical component to quality development and revitalization within the community is for government and city officials to designate and develop external attractions or entertainment venues around the newly renovated state of the art sports arena. It is essential that quality community development is economically beneficial to the overall city and region by establishing external revenue resources such as museums, parks, merchants, and restaurants. The addition of these establishments will be significant in the ability to attract local and regional fans and families, along with tourist to the community, whether visitors are attending athletic events or enjoying the atmosphere of additional events the city offers. Furthermore, due to the anticipated increase of visitors into the metropolitan area, local and government officials will need to develop additional metropolitan transit options to accommodate current residents and the tourism industry. The development or enhancement of various metropolitan transportation systems to professional sports venues or other external attractions will be a significant component which could potentially entice visitors to return, allowing a means for the tourism industry to continue to thrive throughout the year. Additionally, the capability for a city to provide adequate metropolitan transportation systems is a significant factor when professional sports league governing officials are accessing a particular franchises capability to host an exclusive sporting event such as the NBA All-Star Game or NFL Super Bowl. Various research studies suggest professional sports league officials are more likely to select a city to host and possibly return in the future, to a metropolitan region in which transportation options are secure and abundantly available.
Another characteristic which is essential toward community revitalization, due to the presence of professional sports franchises, is the overwhelming presence of charitable participation and community financial support from each respective professional franchise, individual athletics which represent the franchise, and corporate sponsors of the respective franchise. One of the most recognizable examples regarding actions of community support between a professional athlete and his respective professional franchise during the time of community devastation was observed in 2017, when Houston Texans (NFL) all-star athlete J.J. Watt initiated a national support program through social media to assist the region of Houston, Texas after Hurricane Harvey caused billions of dollars in damage. Through Watt’s call for financial support on social media and the efforts of the Houston Texans franchise, the organized community support program raised over $30 million dollars for relief efforts throughout the Houston, Texas region.
In reviewing community development and revitalization programs in which Seattle professional sports teams and their respective community sponsors participate, athletic administrators and athletes within the Seattle Storm franchise are well known throughout the Seattle community for their respective charitable work. The Lifewise Community Health Program is one of the major community programs in which the Storm have developed a year-round relationship. The program is designed to promote healthier lifestyles for all individuals within the Seattle community. The collaboration between the Storm and Lifewise continues to raise funds to assist with renovating community parks, provide insight on healthier eating habits, and developing health and fitness opportunities for individuals of all ages within the Seattle region (19). In addition to the Storm’s community efforts, the Seattle Seahawks (NFL) provide a significant influence within community development and revitalization. The Seahawks franchise is particularly known within the Seattle community for its outstanding commitment to youth development, support for children’s healthcare, and the ongoing progression in youth educational projects throughout the region. The addition of an NBA franchise to the Seattle community would enhance community development resources and provide an opportunity to establish new corporate partnerships to work with various community charities or non-profit organizations regarding the revitalization efforts to the Seattle region.
The presence of a new NBA franchise to the Seattle region could provide unique opportunities for economic growth among local businesses and the potential for expanding employment opportunities throughout the year, instead of employing seasonal personnel. As the NHL is on the verge of receiving an expansion franchise, which will play its home games at KeyArena, the addition of an NBA franchise means KeyArena, along with the operations of other professional sports venues, could potentially provide the city of Seattle with the exceptional opportunity of hosting professional sporting events throughout the majority of the year. The addition of the NBA and NHL would provide the city of Seattle within a rather unique situation, as one of the few cities within the nation to acquire six major professional sports franchises within close proximity of one another. As the NBA, NFL, and NHL seasons almost operate concurrent with each other (NBA and NHL: October-June, NFL: September-January), with the NBA and NHL hosting 41 regular-season home games respectively, while the NFL host 8 regular-season home games, consumer demands among local businesses within a certain radius of the sporting venues could increase significantly; therefore, presenting a necessity for local businesses to expand employment opportunities.
As for professional athletic events during the spring and summer months, the Seattle Storm (WNBA) which occupy KeyArena, begins their respective season in May and concludes in September, with a guarantee of 17 home games. The Seattle Mariners (MLB) participate in 81 home games at Safeco Field from April through October, and the Seattle Sounders (MLS) play their respective season from March to September, with 8 home games at CenturyLink Field. Due to proximity of these professional sports venues from one another, local entertainment businesses such as pubs, restaurants, merchants, and museums, which are located around or between the sports venues, could potentially observe an increase in revenue and employment opportunities throughout the year, particularly if the professional sports franchises are having successful seasons. In addition to regular-season home games, the presence of state of the art professional sports venues have the potential to host professional All-Star Games, National Collegiate Athletic Association (NCAA) tournament games, and other community events such as concerts or conventions, which will provide additional revenue to local businesses throughout the year. For example, in presenting a case for a potential Seattle based NBA franchise to host All-Star Weekend, in 2017 the NBA All-Star Weekend provided an estimated $44.9 million of new spending into the New Orleans, Louisiana region and $24.7 million of additional earnings for employees, due to the New Orleans Pelicans (NBA) hosting the event (20).
Objectionable Views for the National Basketball Association’s Return to Seattle
Public Arena Expense
When the Seattle Supersonics relocated in 2008 to Oklahoma City, one of the primary obstacles encountered by those who opposed the relocation was the financial obligation taxpayers would acquire for a renovation project of KeyArena. The fact attendance in years leading up to the relocation decision had drastically declined and the Supersonics had managed only one winning season in almost a decade, contributed significantly to the decision by local government officials not to proceed with the financial obligation of an arena renovation project. Another significant factor regarding the opposition of expanding the NBA brand back into Seattle region, is due to the possibility of taxpayers paying for an arena which would no longer be in use if the franchise decided to relocate before a respective contact was complete. It is not uncommon for taxpayers to continue paying the expense of a professional sports arena if the professional sports franchise were to relocate before the end of their respective contract. This was almost the case for the Seattle community when the Supersonics and Storm were purchased by Clay Bennett and other investors in 2006. Because Bennett’s proposal to renovate KeyArena did not receive approval from the local government council, Bennett was prepared to relocate both the Supersonics and Storm franchises to Oklahoma City, which would have left KeyArena vacant and Seattle taxpayers paying for an arena which would not be utilized for its primary purpose. Fortunately for taxpayers, Bennett agreed to sell the Storm to an independent WNBA ownership group (Force 10 Hoops LLC), which kept the Storm in Seattle and KeyArena occupied.
Franchise Competition
With the current structure of professional sports franchises within the Seattle region, numerous critiques within the Seattle region consider the concept of potentially acquiring NBA and NHL franchises a potentially precarious circumstance. With Seattle already possessing four professional sports franchises within relative close proximity of one another, critiques believe eventually with the addition of NBA and NHL franchises to the community, one or several of the current professional sports franchises could stumble financially, similar to the Seattle Supersonics previous situation which eventually initiated the franchises relocation efforts to a financially profitable market. One circumstance which could provide immediate confirmation regarding the financial outlook for any of the current respective professional sports franchises, would be to analyze and compare the number of season ticket holders which decide to renew his/her current season tickets with other professional sports franchises upon arrival of an NBA franchise. The concept of analyzing season ticket renewals should provide economist insight into the financial influence the new NBA or NHL franchises could present toward the current professional sports franchises within the Seattle community.
The possible addition of NBA and NHL franchises would potentially mean advertising and marketing personnel of current professional sports franchises in the Seattle area, would have to develop new strategies to maintain their respective fan base as they compete with NBA and NHL marketing personnel. Unfortunately for the current professional sports franchises within the Seattle market, a majority of fans would not have the financial means to purchase season tickets toward six different professional sports franchises. Therefore, there is a substantial probability several of the current franchises could lose season ticket holders to either the new NBA or NHL franchise, if nothing more than due to the excitement and nostalgia the new franchises would bring to the region during their respective inaugural season.
Insignificant Local Economic Progression
Although supporters in favor of NBA expansion within the Seattle community believe the franchise would provide additional economic stability to the community, opponents of expansion have a vastly different view. The primary argument of opponents believe economic progression would be minimally insignificant at best, due to the available spending habits of a majority of individuals which reside in the surrounding communities. Economist suggests monies which are spent by local residents to attend a professional sporting event, is essentially money which would have potentially been spent within other local entertainment establishments such as theaters, restaurants, museums, or small business merchants. Additionally, the investment of an NBA franchise to the local community would potentially cause the price of local housing real estate and business real estate to increase drastically. This predicament for current homeowners within the local community would consequently increase local housing and property taxes; therefore, placing current homeowners in a dilemma of paying increased housing and property fees or relocating his/her family into an affordable suburban area. Small business owners would also be placed in the same predicament as homeowners, as the price for retail locations within the downtown Seattle area would inevitably increase.
A similar research analyze regarding the overall effect on local real estate value after the establishment and relocation of an NBA franchise can been observed in the case of the Brooklyn Nets. When the announcement of the former New Jersey Nets relocation into the Brooklyn, New York Community occurred, and construction efforts of the new Barclays Center, the home arena for the Brooklyn Nets, in the downtown area began, retail vacancies surrounding the Barclays Center decreased by 27%. Furthermore, the attraction of the new NBA franchise into Brooklyn significantly increased developing residential real estate investments within the downtown community (21). Real estate markets for mixed use buildings within the immediate vicinity of the Barclays Center reported approximate increases of $700 per square foot, which was double the price per square foot before the announcement in which the Nets would relocate to Brooklyn. Likewise, housing rental prices significantly increased from $75 to $200 per square foot (21). Local Seattle economist believe the establishment of a new NBA franchise within the Seattle community would produce similar business and real estate economic statistics as those reported from the Brooklyn Nets relocation into Brooklyn community. If a similar process were to occur within the Seattle community, it would be interesting to analyze whether or not the surrounding communities could maintain their respective long-term financial stability, and whether or not the Seattle professional sports franchises could maintain their respective loyal fan bases and community supporters for years to come.
CONCLUSION
Since the relocation of the Seattle Supersonics to Oklahoma City occurred in 2008, community proponents and numerous corporate investors have continuously pursed the opportunity to bring an NBA franchise back to the Seattle community. The Supersonics, which competed for forty-one seasons within the NBA, were a staple of the Seattle community long before any other professional sports franchises arrived in Seattle. Numerous Seattle based economist and sports enthusiast believe the resurgence of an NBA franchise into the Seattle community would be an overall positive business venture, particularly when providing assistance with the ongoing community revitalization efforts throughout the Seattle region. Currently, it seems as Seattle may be the frontrunners for an NBA expansion franchise, if and when, NBA officials decide to expand the NBA brand once again. If expansion of the NBA into Seattle were to transpire, Seattle would be one of the few professional sports markets to possess at least one professional franchise within six major professional sports organizations (NBA, NFL, NHL, MLB, MLS, & WNBA) in one particular community.
Numerous opponents regarding the insertion of an NBA expansion franchise into the Seattle community view the over population of professional sports franchises within one particular community as a sign of potential concern, specifically for one or several of the currently established professional franchises and the community as a whole. Opponents believe eventually there will not be sufficient financial opportunities for each of these professional franchises to generate a financial profit due to the fact each franchise will ultimately compete with one another for local and regional fan attendance and corporate support. Furthermore, as an increased number of professional sports franchises consumes a particular community, housing and business real estate will continuously increase and possibly influence or persuade current residents and small business owners to relocate to suburban areas; therefore, reducing the probability of those individual fans or families returning to the city on a regular basis to attend a professional sporting event.
Overall, as the community of Seattle, along with investors from the Oak View Group, are almost certain to obtain an NHL franchise within the next few years, the Oak View Group will eventually pursue the expansion of an NBA franchise back into the Seattle community. If franchise expansion for both the NBA and NHL occurs, Seattle will definitely possess the capability brand itself as one of the major professional sports communities within the nation. Whether or not the community could sustain such a professional business sporting venture as it relates to long-term financial and social success, will remain to be seen.
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