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The Rise of Sports Megapolises and Entertainment Complexes — What it Really Means for Sports Fans in America

The new model for sports is all about real estate — and pricey cocktails.

Stewart Schley //May 16, 2024//

New Orleans - December 29, 2021: Caesars Superdome
New Orleans - December 29, 2021: Caesars Superdome

The Rise of Sports Megapolises and Entertainment Complexes — What it Really Means for Sports Fans in America

The new model for sports is all about real estate — and pricey cocktails.

Stewart Schley //May 16, 2024//

I have seen the future of sports. It’s a $27 margarita.

Or a $36 “gourmet” hot dog.

Maybe a $120 parking tab, the sting eased by the fact that a nice-smelling valet just fetched your car. It’s about a lovely day at the Sports Megapolis, where you won’t even realize you just spent next month’s Xcel Energy payment because you were having such a good time.

Increasingly, the business model behind spectator sports fandom depends not so much on the playing of games — three-pointers, arcing TD passes, clutch home runs — but the surrounding ethos.

Nowadays we can twist a shopworn expression around: What if they gave a street party and a ballgame broke out?

An idea being advanced by sports impresarios like Marc Cuban is to use a sporting event not as an end unto itself but as a centerpiece for attracting big-spending fans to a Disney-esque pastiche of restaurants, bars, stores and gambling joints.

The thinking being: It’s difficult in these fractionalized, distracting times to amass any sort of consumer scale. If people are flocking to sports events anyway, why not … you know … milk them a little bit more?

READ: Is the Future of Luxury Sports Suites Less… Luxury? Or Just More Practical?

Cuban’s latest gambit offers a glimpse at what’s coming. Late last year, the Dallas Mavericks owner (and part-time TV personality) sold his majority stake in the team to new owners whose predecessors made their fortunes in the hotel and casino businesses. Although Cuban maintains control over the team’s basketball operations, the underlying asset is now in the hands of the Las Vegas Sands Corp., a company tied to the late-and-legendary casino mogul Sheldon Adelson.

A true confession: I’ve been a Cuban fan ever since he politely took time to explain to me, over a couple of personal emailed messages, a key principle of the streaming media business back in the early days. (You nice to me, I nice to you.)

The guy has long been a few steps ahead of the game, meaning what he’s doing now probably … matters.

How so?

In the $3.5 billion Mavericks deal we see the contours of a new approach to sports ownership and management that will have big implications for the fan experience.

As Cuban told NBC News, the real money anymore isn’t about luxury boxes or jerseys or regional sports TV rights, but real estate: building and operating goliath entertainment complexes that use sports as a magnet to get people to open up their iPhone wallet apps.

READ: The Messi Effect — How One Player is Drastically Changing the Global Sports Media Industry

Big-money investors like the Adelson family understand they can leverage the appeal of live games to provoke much more spending than merely the cost of a pair of tickets in Section 207. Hotels, restaurants, shops and betting parlors are signature elements in an entertainment brew that’s designed to extract bigger per-visitor revenue numbers from fans.

A good way to understand what’s happening is to think about how things have worked historically: Sure, there are restaurants and merchandise stores ringing sports-centric locales like Denver’s LoDo neighborhood. But these tend to be owned independently, with entrepreneurs betting they can make a go of things by geo-aligning their restaurant-and-bar businesses with somebody else’s team and somebody else’s building.

The new model effectively says: Sorry, fellas. We’re riding in town to own it all. Or at least lease it back to you.

It’s hardly coincidental that the looming migration to mega-entertainment-and-sports complexes comes as shockwaves continue around media revenue.

The decades-old sports-TV model is splitting apart as predictable cash flows from the fading pay TV tax vanish. (Explainer: For a long time, nearly every household in the U.S. that maintained a cable or satellite TV subscription was subsidizing everything from Kris Bryant’s contract to Nikola Jokic’s haircuts. Now, with streaming video decimating the pay TV trade, the oxygen is being depleted fast.)

READ: Altitude Vs. Comcast — The Changing Economy of Sports Media

Team owners, recognizing they need to replace a reliable cash spigot, are certain to emulate what Cuban and Co. are doing in Dallas, which is to turn sports into the fulcrum of an overarching real estate play. With, of course, a good dash of gambling money coming in on the side from partnerships with betting giants.

In Colorado, at least the early glimmers of this sort of thinking are visible in the form of something called the “Ball Arena Vision Plan” promoted by Nuggets/Avalanche/Rapids owner Kroenke Sports & Entertainment.

Attractive renderings (when have you ever seen an architect’s rendering that wasn’t attractive?) describe a fetching constellation of bridges, bike lanes, pedestrian routes and parks that would unite the River Mile and downtown Denver neighborhoods, with Ball Arena and Empower Field serving as anchor attractions.

It’s all perfectly wonderful-sounding, as development plans tend to be. I mean: Who doesn’t get gooey reading descriptions about “a biophilic human amenity” that will “provide open space and habitat, and also reduce the urban heat island effect.” Sign me up, Stanley!

Behind the sprightly language, though, is the same ideal Marc Cuban sees: building business opportunities that spring from the forthcoming sports-meets-entertainment mind meld. KSE describes it as the grand plan for “a new destination in downtown Denver.”

Destination, for sure.

But let’s all remember that biophilic human amenities and urban cooling don’t come cheap. Here’s betting that inexpensive Nuggets tickets and affordable parking aren’t part of the plan. But that a $27 margarita just might be.

 

Stewart Schley writes about sports, media and technology from Denver. Read this and Schley’s past columns on the Web at cobizmag.com and email him at [email protected]

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