Does Vegas have elbow room for more venues?

Image: MJR Group Ltd./Coliseum

Even those who study sports venues for a living can only guess at Las Vegas’ (US) capacity for arenas.

The ‘Las Vegas Review-Journal’ stated that the noted arena builder Tim Leiweke, Chief Executive Officer (CEO) of Oak View Group (OVG), believes there remains room for at least one more as he puts his money and effort behind building a 20,000-seat, $1 billion arena South of the Strip, aiming for a future National Basketball Association (NBA) team.

This in a marketplace that includes the 20,000-capacity T-Mobile Arena, the 16,800-capacity MGM Grand Garden Arena, the 12,000-capacity Michelob Ultra Arena, and the 19,522-capacity Thomas & Mack Center – all with at least 12,000 seats. That’s in addition to the 9,500-capacity Orleans Arena, the 5,567-capacity The Dollar Loan Center and the 19,522-capacity Cox Pavilion, which were built to accommodate smaller crowds.

The ‘Las Vegas Review-Journal’ further stated that Victor Matheson, a Sports Economist and Holy Cross Professor, said New York and Los Angeles are the only markets he would typically say would be capable of effectively handling multiple venues. But he said Las Vegas could be an exception.

Maintained Matheson, “Vegas is so uniquely different than everyone else. It’s not the tours coming through as much as one artiste is doing 60 days or however many. So that makes it a little bit hard to understand. But in pretty much every other City that’s not Los Angeles or New York – because those are just gigantic – putting two NBA-type arenas has often been problematic for the Cities involved.”

Steve Hill, CEO and President of the Las Vegas Convention and Visitors Authority, said the newly built 65,000-capacity Allegiant Stadium and the T-Mobile Arena filled two massive holes in the local sports and entertainment landscape. He called the decisions to build both venues “pretty easy”.

Going forward, however, those types of decisions become more difficult.

The question is whether Las Vegas has reached that point or will get there soon.

The Las Vegas Convention and Visitors Authority are a Government agency and the official destination marketing organization for Southern Nevada. It was founded by the Nevada Legislature in 1955.
 

Cautionary tales

Las Vegas, which has a metropolitan population of 2.3 million, is in rarefied air when it comes to large arenas. Not including the University of Nevada, Las Vegas (UNLV)-operated Thomas & Mack Center, the area has three privately-owned arenas that seat between 12,000 and 20,000.

Only New York and Los Angeles, with a combined Metro population of nearly 33 million, have more venues of that scale that are municipally- or privately-owned. New York has five, a number Los Angeles will reach when the 18,000-capacity Intuit Dome opens in 2024 with the NBA’s Los Angeles Clippers as the primary occupant.

Matheson said the Phoenix area and South Florida provide warning signs for any other City looking to add multiple arenas.

In Phoenix, the NBA’s Phoenix Suns and Women’s National Basketball Association (WNBA’s) Phoenix Mercury play at the downtown 18,422-capacity Footprint Center. The 18,300-capacity Gila River Arena in suburban Glendale was home to the National Hockey League’s (NHL’s) Arizona Coyotes, but the team will move to Arizona State’s 5,100-seat arena after a dispute over unpaid taxes. The Coyotes hope to stay in suburban Tempe for the long term and build an arena as part of a $1.7 billion project, but Governmental approval of that project is not a certainty.

The Gila River Arena, which already draws about half the number of concerts as Footprint Center, will sit empty for even more dates, leaving Footprint – owned by the City of Phoenix and managed by the Suns – as the only truly viable municipal or private major arena where the Metro population is more than double that of Las Vegas. The City of Glendale owns Gila River.

Observed Matheson, “The problem (in the Phoenix area) is there’s just not that many events to fill up something, and if all of a sudden you are competing against another arena for that limited number of Beyoncé (American singer-songwriter) days or Bruno Mars (American singer) days or Cirque du Soleil (Canadian entertainment company) days, then you run out of events before you run out of arenas.”

In South Florida, Miami’s 21,000-capacity FTX Arena competes with Sunrise’s 20,737-capacity FLA Live Arena and West Palm Beach’s 20,000-capacity iTHINK Financial Amphitheatre for events. The Miami and West Palm venues attract roughly the same number of concerts, dwarfing the amount in the Sunrise arena, which fills the vast majority of its dates for the NHL’s Florida Panthers. The FTX Arena not only regularly books concerts, but is home to the NBA’s Miami Heat, making it the primary venue for the area of 6.1 million.

Minnesota’s Twin Cities, with a population of 3.7 million, faces a similar problem. The 19,356-capacity Target Center in Minneapolis is the home for the NBA’s Minnesota Timberwolves and WNBA’s Minnesota Lynx, but it attracts only about a third of the concerts as St. Paul’s 20,554-capacity Xcel Energy Center, where the NHL’s Minnesota Wild play.

Added Matheson, “Most of the time, if you’ve got one big Metro area, putting two arenas in makes both of those arenas have serious difficulty paying the bills. That’s the one (Twins Cities) that I have not heard of being the bigger problem of the two, although both of them got pretty hefty subsidies from their respective Cities and someone else is paying a bunch of the bills. That makes it a little bit easier to stay in business. The South Florida one has been more of a deal, and of course, the Phoenix-Glendale situation has been a total debacle.”
 

Where Las Vegas fits

The proliferation of arenas in Las Vegas has taken an enormous toll on the Thomas & Mack Center, which opened in 1983 and, without competition from a venue of its size, became an immediate cash cow for the UNLV.

The nearly 20,000-seat arena regularly sold out UNLV Rebels basketball games during the height of that program’s popularity, and acts from U2 (Irish rock band) to American singer-songwriters – Bruce Springsteen to Garth Brooks played there.

Beginning with the MGM Grand Garden Arena opening in 1993, the Thomas & Mack began to lose those major events. Though the Thomas & Mack annually hosts the National Finals Rodeo, the NBA Summer League and the Mountain West basketball tournament – in addition to UNLV basketball – headline concerts tend to take place elsewhere.

The hospitality company MGM Resorts International oversees three major arenas: T-Mobile, the Grand Garden and the Michelob Ultra at Mandalay Bay. T-Mobile draws most of the high-profile acts and is home to the NHL’s Vegas Golden Knights, but the Grand Garden remains viable even without an anchor tenant. Michelob Ultra has such a tenant in the WNBA’s Las Vegas Aces and another on the way from the National Lacrosse League.

Put in Dan Quinn, T-Mobile Arena and MGM Resorts International Vice-President and General Manager, “We’ve got multiple venues to offer events, so (promoters are) looking to see what the right fit is for their particular event. We offer them venues of all sizes, and along with that, you get the marketing strength of MGM Resorts and all of our properties on the Strip and the visitation that we’re able to drive.”

Then there’s the 17,500-capacity MSG Sphere Las Vegas, one of the world’s most advanced arenas being built behind The Venetian. It will be a venue mainly catering to concerts, with the staging area not big enough for arena-style sports. The former UNLV and NBA player Jackie Robinson hopes to build an arena on the North end of the Strip as part of a $4.2 billion project that has been dragging for almost a decade.

It doesn’t stop there. A group is in negotiations with Major League Soccer (MLS) to bring an expansion team, and a smaller stadium is expected to follow. And if the Major League Baseball’s (MLB’s) Oakland Athletics leave Oakland, California, for Las Vegas, they will likely build a $1 billion stadium on one of the two sites team officials said they are considering.

If Leiweke’s arena comes to fruition – his track record includes venues from Los Angeles to Toronto (Canada) to Seattle – there will be direct competition with T-Mobile for major events. Quinn downplayed the effect of a new arena, saying Las Vegas is attractive enough for multiple venues to succeed.

That’s Oak View’s take as well.

Marc Badain, the former longtime Las Vegas Raiders executive who was instrumental in the NFL team relocating to Las Vegas and the construction of the Allegiant Stadium, is an Oak View partner and consultant. He said the timing follows the City’s roughly 10-year cycle of adding arenas.

By the time this arena would open its doors, it would be about a decade since T-Mobile did the same in 2016.

Added Badain, “So from that standpoint, it didn’t really seem out of the norm to me, and there’s certainly enough capacity.”

The plan is to construct the arena South of the Strip and the Harry Reid International Airport at the Las Vegas Boulevard and Blue Diamond Road.

Explained Badain, “If you look at where you can expand Las Vegas Boulevard, it’s going South. So, it was only a matter of time before that parcel of land got developed, and it was something that was looked at for the stadium project back five, six years ago. So that location isn’t necessarily a surprise to anyone. It’s just a matter of the density following, which you’ve got in the arena project we’re talking about. You’ve got the potential for the MLS stadium. You’ve got the Brightline high-speed rail train station. So, you have a chance to really do a lot of development on that 260-, 270-acre parcel there.”
 

Bottomline

Las Vegas built its reputation by pushing the limits, and another arena would be the latest example of doing just that.
 

But would it be the right move?

Badain and his group clearly believe it is, whether or not the arena attracts an NBA team. They say there is enough demand for entertainment outside of sports.

Asserted Badain, “No other City really has the amount of visitation that this City has in sort of a contained space. There might be more visitors to other locations around the world, but it’s scattered around 10s of miles, whereas in Vegas, it’s pretty much a 5- to 10-mile radius for everything. So, it’s got a much bigger demand for live entertainment here that continues to exist and that will continue to grow.”

Hill underscored that point by noting there are 300,000 tourists on any given day “Looking for something great and fun to do. Tim Leiweke probably knows as much about whether or not it makes sense to build a venue as anybody in the country. So, if he thinks that’s a good idea, it’s probably a good idea. If somebody else was doing it, I might feel differently about it.”

That NBA team Leiweke is building for? Don’t expect an expansion team any time soon to fill his arena.

Stated NBA Commissioner Adam Silver, “We are not discussing that at this time. As I’ve said before, at some point, this league will invariably expand. Just not at this moment.”

Maybe Leiweke and Badain are correct that Las Vegas can handle another major arena, whether the NBA comes or not. Maybe that 2026 timeline will be just right for the NBA.

Added Badain, “We’ve been pretty clear – both Tim and I have shared this – we’re not going to assume anything. We’re not going to be presumptive. That’s a decision that has to be made by the Commissioner and by the 30 owners. It’s their league, and they’ll dictate what markets they go into. We’ll build an NBA-ready arena, but we’re not making any assumptions about them coming or coming to play there.”

No one really knows, however, what is Las Vegas’ capacity.

Concluded Matheson, “Vegas is so weird that it’s not entirely clear that it can’t support way more of these things than a normal City. It obviously can, and maybe it has no limit on how many it can support.”
 

Las Vegas’ select company

Top Cities with municipally- and privately-owned sports venues (minimum 12,000 seats):
 

New York (5)

• The 19,000-capacity Barclays Center: Home to the NBA’s Brooklyn Nets;
• The 20,789-capacity Madison Square Garden: Home to the NBA’s New York Knicks and NHL’s New York Rangers;
• The 14,500-capacity Nassau Veterans Memorial Coliseum: Former home to the NHL’s New York Islanders now hosts G League and National Lacrosse League teams;
• The 19,500-capacity Prudential Center: Home to NHL’s New Jersey Devils; and
• The 17,255-capacity UBS Arena: Home to the New York Islanders.

Metro population: 19.8 million.
 

Los Angeles (4)

• The 20,000-capacity Crypto.com Arena: Home to the NBA’s Los Angeles Lakers and Los Angeles Clippers and NHL’s Los Angeles Kings;
• The 17,174-capacity Honda Center: Home to the NHL’s Anaheim Ducks;
• The 17,505-capacity The Kia Forum: Former home to the Lakers now hosts boxing and mixed martial arts (MMA) fights;
• The 14,500-capacity Long Beach Arena: Has hosted various sporting events and will be the site of the handball competition in the 2028 Summer Olympic Games; and
• To come: The Clippers will move to the Intuit Dome in 2024.

Metro population: 13 million
 

Las Vegas (3)

• The MGM Grand Garden Arena: Now mostly a concert venue, still a site for some boxing and MMA events;
• The Michelob Ultra Arena: Home to the WNBA’s Aces;
• The T-Mobile Arena: Home to the NHL’s Vegas Golden Knights; and
• To come: The Oak View Group plans to open an arena South of the Strip by 2026, and a Jackie Robinson-backed group has plans for a potential venue as well.

Metro population: 2.3 million
 

San Francisco-Oakland Bay Area (3)

• The 18,064-capacity Chase Center: Home to the NBA’s Golden State Warriors;
• The 14,000-capacity Cow Palace: Former home to the Warriors and NHL’s San Jose Sharks now hosts annual rodeo; and
• The 18,543-capacity SAP Center: Home to the Sharks.

Metro population: 4.6 million
 
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