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It's An Arena Problem Not Just A Blue Jackets Problem

June 3, 2009, 2:59 PM ET [ Comments]
Eric Smith
Columbus Blue Jackets Blogger • RSSArchiveCONTACT
twitter / BlueJacketsBuzz

Blue Jackets brought about the arena. The arena brought about the Arena District. The Arena District brought about a revived downtown in Columbus. Just to give you an idea of what the impact has been, here are some numbers that came from an Economic Impact Study done by Ohio State University John Glenn Scholl of Public Affairs. This study investigated what the impact has been of the Blue Jackets and the Arena over the 10 year period between 1998-2008.

- $1 billion in investments; $2 billion in economic activity ($1.6 billion – 2006)

- 172 businesses in District (2006)

- 7,000 employees (2008)

- $350 million in wages (2006)

- 1 million square feet of office space

- 6 housing complexes – 800 residents

- $850 million in visitor spending in 10 years

- 78% believe Blue Jackets give rest of country idea Columbus is a big city

- 90% proud Columbus has an NHL team

Those numbers are hard to debate as a common man/woman walking in the Arena District knows what kind of impact that Nationwide Arena has had to downtown Columbus. Senior Vice President and General Counsel of the Blue Jackets Greg Kirstein, Vice President of Public Relations of the Blue Jackets Todd Sharrock and A.V.P. of Fahlgren Mortine public relations firm Aaron Brown met with a few of the bloggers that cover Columbus and the Blue Jackets last night to discuss the situation that is facing the Blue Jackets and the Arena.

One of the things that I had not heard come out nor have you heard politicians state is that the Blue Jackets have been working with the state and local politicians since April. The state politicians were all for putting the "Sin Tax" legislation into the state budget but wanted a simple endorsement from the county commissioners. The state didn't get it and now it won't be in the budget. Also, the commissioners would have had the options of either imposing the tax or putting it on a ballot and letting Franklin County residents vote for or against it. Meaning, that if the County Commissioners would have given a simple, "let's give it a try," the proposal could have been put to ballot and they could have let the people decide. Instead, they decided for everyone.

Next was that of the last 37 arenas, stadiums and ballparks built, 2 are owned privately. AT&T Park that the San Francisco Giants play at and Nationwide Arena. The other 35 are either totally owned by the public or got public assistance. Right or wrong, it is what it is. Arenas, stadiums and ballparks are by themselves unable to be a profitable entity by themselves. They mostly sit empty most the day, operation costs are very high and construction cost are high due to the demand of fans to have the best of the best. That's why if you look only at Nationwide Arena, you can never figure out a way for it to win. You have to look at the Arena District and downtown as a whole and decide is the arena worth it? The public has to decide if the Arena District is as valuable as the city parks, bike paths or Huntington Park, the new AAA baseball stadium, that the county completely paid for and owns.

My stance on the entire thing is that the lease with Nationwide Realty is absolute garbage and John H McConnell, in my view, was so desperate to get a pro franchise to Columbus that he signed something that he even pretty much knew was bad. Can the lease be redone? Possibly but at this point, I think that Nationwide Realty wants out of the arena business because it is a loser.

So, as Franklin County residents you have 2 questions to ask yourself, do you want the Arena District to stay the same or do you want it to go back to when the state penitentiary stood there. Whether it is a "Sin Tax" or some other way of public assistance, if you want the arena to stay occupied and the Arena District to stay vibrant, we are going to have to pay. If you want it to go back to the way it was, then do nothing.

Kirstein stated that they have been looking into the money losing problem for the last 14 months. The clubs revenues are in the middle of the pack of the NHL even though Columbus is the 23 out of 24 TV markets in the U.S. (Buffalo is smaller because they can't count the Canadian market they draw). The problem is the lease plain and simple. The problem of the lease was masked by the early gate success of the Blue Jackets where almost every game was sold out and the first year player payroll was $22 million. Today, the player payroll is $50.8 million. Now with the player payroll north of $50 million, Kirstein stated that even if the Blue Jackets sold out every game, they would still lose money. He also stated that the CBJ hasn't spent 1 minute in those 14 months discussing the possibilities of moving the team but if nothing is done, it won't take them long to start discussing it.

Puckrakers blog came out with a blog yesterday that stated that the Anschutz Entertainment Group, who owns the Los Angeles Kings as well as the brand spanking new Sprint Center arena in Kansas City, have no interest of trying to attract the Blue Jackets to K.C. for the reason of, "That hockey club (Columbus) is under a long-term lease. It would not be appropriate for us to talk about or with a club that has a long-term agreement in place," stated by Michael Roth, VP of communications for AEG. Well, if you think that statement makes you feel all warm and fuzzy inside that AEG won't try to lure the Blue Jackets you are wrong.

Here is a riddle for you: How long does it take an NHL team to get out of a long term lease?

Answer: About 20 minutes or the time it takes to file bankruptcy papers.

AEG can't own the Blue Jackets since they all ready own an NHL team but what is to stop John P McConnell from moving the team there? What is to stop him from selling the team? This just in, some guy that is a billionaire in Canada wants to buy a NHL team.

Also, know this. The Blue Jackets and the Fahlgren Mortine P.R. firm they have hired are doing the following things. This is taken right from the Fahlgren Mortine website under the heading of "P.R. Lessons From The Godfather."

* Research - What’s the target consumer’s HH (household) income? Where do they shop? What do they look for when purchasing this type of product? This research is for the most part done. The CBJ are full aware of all of these things.
* Messaging and Brand Positioning - What type of message do our competitors carry? What segment of the market do we want? What are the differentiators that make us unique? You might ask, what competitor? Any form of entertainment and especially sports entertainment. This focus goes right at Ohio State who has reneged on promises they made in regards to the Schottenstein Center. Always and I mean always, fear a man in a bow tie (Gordon Gee). People that do concert and event promotions have told the Blue Jackets that the Columbus market has 2 "A" quality venues in a "B" market. The differentiators is the Arena District. The "Schott" is an arena that is "on campus" but has none of the feel of such. None the less, each compete for the same concerts and events and have to over pay to get them.
* Media Relations - How can we leverage the third-party credibility of traditional (and, increasingly, nontraditional) media outlets to reassure cautious consumers? This is squarely aimed at me and my peers. The Blue Jackets are looking for us to get the message out. Nontraditional media have become increasingly more important for this. Thus, the meeting last night. Damn! I thought it was because I was special!
* Social Media - Is there a way to provide our customers with a platform to become brand ambassadors? Here is the next step for the Blue Jackets. They have to make the general public little sales people. This is the most important step because if they can't get the general public to get behind this, they will be dead in the water with this push.

Now let's see if the Blue Jackets will give the Franklin County residents, "an offer he can’t refuse.”

Listen, I am as right winged as they come and I even kiss my Ronald Regan picture before I go to bed at night but I don't want it to go back to the way it was. If you remember what the Arena District was like during the Lockout, it was a ghost town. I asked to see if they had what the economic impact was to the area when the lockout happened. They didn't have those numbers but were going to look into getting them but it doesn't take a genius to know that it hurt and it hurt bad. 3 pennies a beer didn't sound bad to me to keep alive an area that when you have guests in from out of town, where is one of the first places you think to take them? It's either Easton, Polaris or the Arena District. Without the Arena District, you are now down to 2 choices. The Arena District is a jewel of Columbus and this is in a town that is so vanilla that losing this little cherry on top would make it a little harder to live here.

The choice is really yours, as a Franklin County resident. What are you going to do? Let the commissioners and Columbus mayor know what you want to do by calling them. Here are their numbers.

Commissioner Paula Brooks - 614-462-5729
Commissioner Marilyn Brown - 614-462-3461
Commissioner John O'Grady - 614-462-5589
Mayor Michael B. Coleman - 614-645-7671

Commissioner's email is [email protected]
Mayor Coleman's email is [email protected]

Fire The Cannon!

Eric Smith
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