It used to be that a humble sports team could get by selling tickets, beer, and a few boxes of Cracker Jack. Those days are long gone.
What happened: New York Mets owner Steve Cohen was awarded a licence to build a casino next to the team’s stadium, and he plans to make the most of it. Cohen’s new Hard Rock entertainment complex will reportedly cost US$8.1 billion to build and include 5,000 slot machines, 375 dealer tables, a 1,000-room luxury hotel, and a performance venue as big as Radio City Music Hall.
The New York State Gaming Commission predicts that the development will generate $3.9 billion in annual revenue, making it one of the largest casinos in the U.S.
Catch up: Cohen’s project may be unusually ambitious, but sports franchises getting into the real estate game is becoming de rigueur.
The NFL’s Los Angeles Chargers’ SoFi Stadium development included 500,000 square feet of retail space, luxury apartments, and an artificial lake.
Chase Center, where the Golden State Warriors hoop, was built next to a project called “Thrive City,” spanning 600,000 square feet of office space and 100,000 square feet of retail.
In Ottawa, plans for the new Senators arena at Lebreton Flats include hotels, restaurants, and condos.
Why it’s happening: Franchise owners are looking to squeeze every dollar they can out of their asset. Turning stadium parking lots that are empty most of the time into lux developments that generate cash 365 days a year is a good way to do that.
Why it matters: This trend is part of the reason why, across all major leagues, sports franchises valuations are soaring — a stake in the New York Giants was recently sold at a US$10.3 billion valuation, breaking a record for most valuable franchise set by the Los Angeles Lakers just months earlier.—TS