Boots Who?
It’s hard to say what exactly we are watching as we see Mario et al troop between Kansas City and Pittsburgh demanding money. Was the KC tour entirely legitimate or was it a show designed to pressure Pittsburgh politicians for a better arena deal? Is there a little of both at play?
The conflicts of interest in the Kansas City offer appear a little unseemly. The owners of the Kings are the ones making the pitch to Mario and friends. (“We are not trying to steal the Penguins,” Tim Leiweke, president of Anschutz Entertainment Group, said.)
William “Boots” Del Biaggio III, the guy who is supposed to end up owning the KC Scouts II is a Lemieux partner, sharing ownership of the Omaha Lancers of the USHL. Luc Robitaille is another partner in that venture as well as fronting for the Anschutz people in Kansas City. It all seems so incestuous. Kansas City does have a rink in search of a tenant, but it is also a fairly dubious market. It’s not particularly large, it already has baseball, football and college basketball. Hockey failed in the city once before. The NBA is a better fit.
And speaking of unseemly, who is Boots Del Biaggio? According to the Pittsburgh papers he has deep pockets, but I’ve got doubts:
At 39, Mr. Del Biaggio heads a banking empire that has $1 billion in assets, and he is the founder of a California firm that provides venture capital for high-tech companies.
The “banking empire” is a small California bank founded by Del Biaggio’s father, and as far as I can tell Boots is no longer connected to the firm. He certainly doesn’t head it. Furthermore, Del Biaggio’s venture capital firm Sand Hill Capital wasn’t exactly a roaring success. Back in 2002, Del Biaggio was written up in the Silicon Valley Business Journal in a story entitled “Boom to Bust, The Inside Story of a Venture Washout.”
I never underestimate the stupidity of the NHL so we can’t dismiss the idea, but is Kansas City and Del Biaggio supposed to be better for hockey than Balsillie and Southern Canada? Better than anyone else in Pittsburgh even if they have to chip in on an arena?
Boots Who?
Mario’s game is ridiculously transparent – he’s just playing one market off against another, looking to force Pittsburgh’s hand. He would obviously prefer to stay in Pittsburgh, but the asking price is clearly going to be a taxpayer funded arena in which the Pens pay little to no rent, and get to keep most of the ancillary revenues.
We can scoff all we like at the KC deal, but it’s really not all that bad for the Penguins. If you can play rent free at a brand new rink, and cut a deal to get a good share of the advertising and luxury box money, the business model isn’t all that bad. The people you have to pity in this situation are the taxpayers of Kansas City, who got sold the classic bill of goods regarding an arena being part of an “urban redevelopment project” that will, “pay for itself”. Right, that’s why you are offering it out rent free. Urban infrastructure is crumbling, schools are underfunded but hey, look at the shiny new glass arena we built!
I agree, Dennis, particularly when revenue sharing and the CBA eliminates most of the risk for the owner.
I wonder whether there is a real owner in waiting in Kansas City. I don’t think Boots has any real money.
I wonder whether there is a real owner in waiting in Kansas City.
I think there is but he can’t own the team. But apparently operating the building is legit. Strangely enough he was crying poor about the franchise he already owns prior to the lockout but he’s been plotting to get his sticky fingers in another franchise even before the new CBA.
I never underestimate the stupidity of the NHL so we can’t dismiss the idea, but is Kansas City and Del Biaggio supposed to be better for hockey than Balsillie and Southern Canada? Better than anyone else in Pittsburgh even if they have to chip in on an arena?
One of the things I?ve always found intriguing in reading history or watching documentaries about major events (e.g., Fog of War with Robert McNamara comes to mind) is how some very smart people can end up doing some incredibly foolish things. Pride, ego and a host of human emotions seem to interfere with a process that at times requires a detachment from all that?s been accepted as fact up to that point. The fact that someone has built an arena alone is hardly relevant to what?s best for the NHL as a league and where teams should be placed. It seems to me that demand for a product is often the best prognosticator of its likely success. It also helps to have an owner with deep pockets with an intense passion, commitment, and understanding of the game. Old boys networks most often benefit the old boys in it.
One of the things I?ve always found intriguing in reading history or watching documentaries about major events (e.g., Fog of War with Robert McNamara comes to mind) is how some very smart people can end up doing some incredibly foolish things.
Try reading Barbara Tuchman’s “The March of Folly”. I wrote a post about it – now lost in cyberspace – comparing why Tuchman believed it happened and the behaviour of the clowns who run the NHL.
It seems to me that demand for a product is often the best prognosticator of its likely success.
Putting aside the fact that demand (a) can be created and/or nertured and (b) is a far from static commodity, I do not see where you would be up to date on the status of demand for hockey in KC, Snafu (other than an asusmption that, since it is further south than you it must automatically be suspect). As a resident of southern Ontario, and in fact a resident of a place where people still automatically assume that an NHL team would do well over a decade after Ron Joyce failed to bring it in, I can tell you that the assumption that there is huge demand in the GTA for another NHL hockey team is vastly overstated. There is a substantial demand for Leaf tickets. Hockey tickets? I seriously doubt it. In fact, if I may digress, I would so so far as to say that an NHL team in Hamilton or Kitchener, for example, would be mediocre at best. The Leafs’ success is built on the back of corporate Canada, who recognize that Leaf tickets in downtown TO are valuable corporate business currency and are prepared to pay large for them. It is not even built on the pocketbooks of the Leaf Nation, except to the extent that the recipients of that business currency values them. Corporate Canada will not go to Kitchener or Hamilton through 90 minutes of traffic to watch the not-Leafs.
The above is not intended to endorse KC or, more particularly, Delbiaggio. I am simply questioning the automatic dismissal of KC as a less preferable market than southern Ontario. THAT I do not necessarily agree with.
Fiddlesticks, GC! I once wrote in this very blog that there was a huge difference in the type of marketing required to take advantage of an unmet market need, create demand for a new product and then maintain demand for existing (established or mature) products. Enter all the Boston Consulting Group gurus with their charts of Cash Cows, Stars, Dogs and Question Marks, to simplify matters for the non-marketing types. Without turning this into a dissertation on why I?m qualified to comment on marketing issues, let me just say that you?re oversimplifying things.
Now, where did I say that KC did NOT have demand for NHL hockey? What I said was that demand was a good prognosticator of success. Has anyone demonstrated that KC [as a market] has an unmet need for hockey? Or for professional sports in general, having 3 pro teams in place now? Has anyone demonstrated what criteria are necessary to either put in place and/or create in order to increase the likelihood of success of a hockey product in any US city, including KC? I know what some indicators are, but please note the word ?success? and how it correlates to any of these? Yes, I think we?d agree that there are many risks, but perhaps some risks are better than others.
You jumped to the conclusion that I dismissed KC. I did not. I dismissed the notion that a new arena by itself backed by a network of investor-types (guys who need someone else?s money or a group of someone elses?) was sufficient reason to qualify KC [or any other city]. I?m not up-to-date on demand projections for hockey in KC and am completely open to any data that might shed further light on the subject. Absent additional evidence, I will continue to dismiss the notion that an arena alone with a Bootsian gaggle of backers is a good option for the NHL- in any city!
As for Ontario, you?d be surprised to hear that my first order reaction would be that Southern Ontario is Leafs country. Just like a second team in Red Wings country might inspire comparisons to a certain red-haired orphan child?somebody might be able to make a case that it could work. It would take a lot of convincing. I already think the league is too big however, and I especially think it has passed the point where we can treat 30 teams [logistically speaking] as being in the same league any longer. I base this opinion on the continuing struggle the league has in developing a fair and balanced schedule, and the constant demand by teams themselves to re-visit the issue. Others, of course, can draw their own conclusions.
I think there is but he can’t own the team. But apparently operating the building is legit.
I can’t see why this isn’t a conflict as dangerous as allowing one owner to have two teams. It isn’t too hard to imagine a situation where a King’s loss would provide more benefits to AEG than a King’s win.
If this is okay, why not let Anschutz own both teams? Whether there is any real danger of hanky panky isn’t really the question. It’s unseemly and it cuts directly to the core of the product – the credibility of the competition.
Gerald, the cynic in me wants to rebut “but half of corporate Canada is driving *from* Kitchener where they live, *to* Toronto where they work, and that’s why I cannot afford a house in the KW area and they may enjoy getting to drive a relatively short distance for a hockey game” but you’re probably correct in that CC drives the Leafs. There’s a certain amount of cachet in being seen at the ACC, I imagine, and that’s also why it’s cheaper to drive to Buffalo or even Detroit to catch an NHL game.
There’s no longer any question in my mind that Lemieux is just playing different groups off against one another though. Can’t blame him though, he’s just following the cynical example set by Gary Bettman.