I came across an article in the Bergen Record a while back involving the Devils business and owner groups and the State of New Jersey. John Brennan reports that Devils Owner Jeff Vanderbeek is considering a deal that would make the Devils Arena Entertainment operate the IZOD Center. The article was actually in the state news section in the newspaper. This is a fairly important deal (one that hasn't be offered) that may end an ongoing arena war that's causing the Prudential Center/DAE and the state-run NJSEA to lose a lot of money. I posed this question to myself because I feel it has a lot of positive implications for the Devils and related organizations. More after the jump.
Again, no deal has been offered by the NJSEA or the state, nor any word on one being in the works. Per the article, State Senator Paul Sarlo said the following that sparked questions:
"The region, as a whole, benefits from having both arenas open, and a deal might help ensure that the employees keep working at the Izod Center, though perhaps under a private banner," Sarlo said. "So they would be working for the Devils, but [the state] would still own the building.
Jeff Vanderbeek has had talks and likes this for a number of reasons:
"We have spent some time discussing it, and preliminarily we believe that there are substantial economies of scale that would be beneficial for the state, the region and for fans," Vanderbeek said.
These reactions all come from a recent report released by a special advisory group to assess the NJSEA's financial situation. Thanks to On The Banks for the link (here's his take from a Rutgers perspective). It involves an analysis of Section VII of the report:
The Commission wishes to make clear that it does not categorically view the existence of the Izod Center and the Prudential Center, just twelve miles apart, as being negative. In fact, the Commission notes that from the opening of the Prudential Center in October 2007 through November of 2009 the overall combined venue use for the Izod Center and the Prudential Center increased by 222 events (that is, 58%) over the historic norm. The picture can be even brighter if cooperation and synergy is fostered among both state‐controlled and privately operated
venues. Other Commission recommendations include the following:
• The State should test the market for interest in privatizing operations of the IZOD Center and the PNC Arts Center by issuing a request for proposals.
• A single point of contact should be established for booking concerts and otherevents at the taxpayer‐supported facilities. (Facilities in the next bullet point).
• A formalized plan for improving communications among the Izod Center, the PNC Arts Center, the Prudential Center, the Rutgers Arena and Stadium and the Atlantic City Boardwalk and Convention Center should be developed.
The committee make this suggestion later in the section:
Creating a dialogue among New Jersey’s major entertainment venues which has set in motion a style and level of cooperation that will ultimately ensure that competition among them is mutually beneficial and not counterproductive to their financial success.
So it seems a number of sides are for this arrangement, and I can't blame them. First off, this would end an arena war between The Rock and the IZOD Center. John Brennan expressed this as a benefit:
Executives at each arena have often questioned discounts offered by the other arena to lure top-selling acts to their venue. If the Devils’ affiliate manages both buildings, the bidding wars could cease — thereby improving the overall profitability of the arenas.
I'm not an expert in business management, but from my understanding, profits are good, especially for the NJSEA, who lose around $30 million a year. The Devils also lost money this season, per this interview with Vanderbeek. This also rebuilds a long relationship between the Devils and the NJSEA, who weren't very happy to see a successful franchise leave a state owned and operated arena.
This deal, if it were to happen, would obviously expand the DAE. With the Nets now playing Prudential Center for the next two years, The Rock has been deemed the "sports" arena and the IZOD Center as the "arts an entertainment" venue. For the Devils Arena Entertainment, it is more profitable to lose concerts, family events, and shows, and gain the Nets home games. How so you ask? Well to my knowledge, the DAE only operate sporting events at The Rock, and the AEG operate all other events. If all of the non-sporting events move to the IZOD Center, the DAE would operate every major event between the arenas. Attendance at both arenas during the first half of this year have been around the same. If one would combine Prudential Center's and IZOD Center's attendance, it would be the second largest in the country. That would be a lot of operating for the DAE, and ultimately more money for the Devils and their owners.
So how would you, the fans, feel about this? Would you want the Devils and the state to mesh again? Do you see any negative aspects of this deal? Do you see any more positive implications? This may not affect the Devils on-ice performance. It may help pay for a certain $100 million contract that's being (re?)negotiated. Let us know what you think. Thanks for reading.