Another Financing Scenario

Quick Facts:

$500 million arena.
A visitors tax (20 cents per passenger via airlines at Sea-Tac International Airport
31,300,000 passengers flew through Sea-Tac in 2009.
A 20 cent Port of Seattle tax per each passenger would generate $6,260,000 per year. This would end after the buildings 15th year.
Port of Seattle would pay a $3 million naming rights fee per year.
City of Seattle would pay $75 million towards arena through arena ticket tax
NBA team would pay $3.5 million per year for 25 years ($87.5M)
NHL team would pay $3.5 million per year for 25 years ($87.5M)

Up front arena payments:
- NBA ownership group - $150 million
- NHL ownership group - $75 million
$225 million

Remaining financial sources:
- Port of Seattle tax: $93,900,000
- City of Seattle tax: $75,000,000
- NBA team rent: $87.5 Million
- NHL team rent: $87.5 million
TOTAL: $568,900,000


Why would Sports Teams agree to this?

NBA team would pay $150M down payment on facility and pay another $87.5 million in rent over 25 years. The NBA team does this because they get 100% net revenue from ALL NBA basketball events, including ticket sales, concessions, parking. They also get 80% of all non-NBA and non-NHL events net revenue.

NHL team does this because they are guaranteed a brand new, state of the art facility in one of the league’s most un-tapped markets. NHL has many faltering franchises and Seattle offers better stability. The team keeps 100% net revenue from ALL NHL hockey events, including ticket sales, concessions, parking. They also get 20% of all non-NBA and non-NHL events net revenue.

Splitting revenue streams with other sources have long been issues regarding arena/stadium deals with cities.

Why does Port of Seattle get taxed here?

The Port of Seattle is one the biggest source of tourism transportation in our state. The amount is so little that it doesn’t harm any industry. It also does so because they are guaranteed naming rights for $3million per year for minimum 15 years. By having Port of Seattle on the arena and having the arena provide worldwide events, it promotes a larger platform to put its name out there. Seattle is one of the main gateways to Asia and NBA is very popular in Asia, thus providing a larger audience. The arena would also be able to hold conferences and seminars. The arena could be right next to the Port of Seattle, which would allow it to be used by many companies using the Port, as well as local companies such as Microsoft, Boeing, Amazon, Weyerhaeuser, and Starbucks.

Rights Distributions
The distributions would be split up 3 ways: NBA franchise, NHL franchise, and Arena Debt. Sources of Naming rights come from:
- Official Arena Naming Rights
- Official Soda of Port of Seattle Arena
- Official Beer of Port of Seattle Arena
- Official Telecommunications of Port of Seattle Arena
- Official Fast Food Restaurant of Port of Seattle Arena
- Official Financial Institution of Port of Seattle Arena
- Official Automobile Manufacturer of Port of Seattle Arena
- Official Apparel Brand of Port of Seattle Arena

Of course this isn't a perfect scenario and highly unlikely to be approved, but I thought of this last night while laying bed. Your thoughts would be appreciated.