Would NBA Ever Set Up Shop in Las Vegas?

Josh Martin@@JoshMartinNBANBA Lead WriterJanuary 8, 2014

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Construction is a constant in Las Vegas, where older resorts are frequently demolished to make way for newer, spiffier ones and the vast desert surrounding Sin City is always a target for expansion.

But the latest news regarding development on the Strip could have implications reaching far beyond slot machines, night clubs and the influx of bachelor/bachelorette parties—and into the realm of the NBA.

According to Business Wire, former NBA player-turned-businessman Jackie Robinson is spearheading a privately funded $1.3 billion project to build a brand-new hotel-arena complex next to the under-construction SLS Hotel and the unfinished Fontainebleau Tower on the Strip.

The development, tentatively named the All Net Arena and Resort, would replace the Wet 'n' Wild water park, which was shuttered in 2004 to make way for a casino that never came (per Richard N. Velotta of the Las Vegas Sun).

As it happens, Robinson's 22,000-seat dream isn't the only such venue that could hit the Strip in the years to come.

According to the Sun, MGM Resorts International, which owns and operates a host of hotels and casinos in Las Vegas, is partnering with AEG, the same company that oversees the Staples Center in Los Angeles (among myriad other properties), to build a 20,000-seat arena near the Monte Carlo and New York-New York resorts, which MGM also owns.

Both buildings figure to be up to the NBA's lofty standards for hosting its events. Each would rank among the biggest venues currently in the Association's employ, with ample space for luxury suites, concessions and all manner of other state-of-the-art amenities that are now standard around the league.

But would a couple of shiny new structures in a town chock-full of them be enough to bring pro basketball to Vegas beyond its current capacity?

That depends—and not just on the whims of the NBA and commissioner-in-waiting Adam Silver.

Hotels and Reservations

An artist's rendering of All Net Arena in Las Vegas.
An artist's rendering of All Net Arena in Las Vegas.Courtesy of Cuningham Group Architecture, Inc.

The city is already home to the bigger of the NBA's two summer leagues and hosted the league's All-Star Weekend in 2007. Those events have been held at the Thomas & Mack Center on UNLV's campus. That arena, which opened in 1983 and can accommodate close to 19,000 patrons for a basketball game, is a stop on the Los Angeles Lakers' annual preseason tour around the region and was witness to Kareem Abdul-Jabbar passing Wilt Chamberlain as the NBA's all-time leading scorer in 1984.

Clearly, the league has a long-running history with Sin City, though not all of it has been so rosy.

The 2007 All-Star Game was marred by violence, much of which emanated from a particularly rowdy out-of-town crowd that descended upon the desert for the occasion. According to Edward Lawrence of KLAS-TV in Las Vegas, that weekend saw four shootings and a total of 403 arrests, with local police spending as much to contain the four-day event as they usually do on New Year's Eve.

The Clark County sheriff said he would welcome the league's midseason showcase back to Las Vegas, though the locals weren't exactly thrilled with that prospect.

Neither were some of those in charge of the town's casinos.

Terry Lanni, the late chief executive of MGM Mirage Inc., berated the NBA for the way All-Star Weekend unfolded.

"The gang-bangers and others who came for purposes other than attending the game, they weren't very good for Las Vegas," Lanni told the Associated Press (via ESPN). "In talking to our casino hosts, a number of people stayed in their villas and suites. They felt uncomfortable."

Lanni added, "Mr. Stern can keep his basketball franchises out of Las Vegas as far as I'm concerned," though he later backtracked on those comments.

Much of the vitriol from Lanni and others in the casino business stemmed from the drop in gaming revenue that coincided with All-Star Weekend. The festivities happened to fall on the same weekend as the Lunar New Year, when gamblers from Asia often flock to Las Vegas to celebrate—and spend. As Lanni mentioned, some of those annual visitors were turned off by the tourists in town for the most expensive All-Star Game to date.

But the pomp and circumstance surrounding the All-Star Game and that which accompanies a run-of-the-mill regular-season contest are two entirely different beasts.

"There's a big difference between out-of-towners coming to Las Vegas to party and locals going to a ball game," former Las Vegas mayor Oscar Goodman said at the time. "The crowd that was disruptive is different from loyal Las Vegas fans who back their home team."

Goodman, for one, understood the long game: that the All-Star Game was meant to serve as a means to a greater end, not as an end in itself.

"The All-Star Game, as far as I was concerned, was a vehicle to get the commissioner to come to Las Vegas and talk with me," Goodman told Joe Schoenmann of the Sun. "Now we're in a position to see an NBA franchise. We've had no other discussion about a continuous All-Star Game."

A World-Class Sin City

An artist's rendering of the MGM-AEG arena project in Las Vegas.
An artist's rendering of the MGM-AEG arena project in Las Vegas.Rendering provided by AEG

Surely, if the NBA expressed interest in bringing a franchise to Las Vegas, be it by relocation or by expansion, the city would oblige.

Simply put, being home to a major American professional sports team is a big deal.

A team can serve as a galvanizing force for locals, a driver of commerce and development and an indicator of a city having "made it" on the world stage. As incoming commissioner Adam Silver said back in September of 2013 to Rich Kirchen of the Milwaukee Business Journal, having an NBA team "signifies a certain stature for a city in this day and age. It signifies a major league image."

Businesses of all sorts, particularly restaurants and retail stores, tend to spring up around sports arenas to capitalize on the influx of consumers. If you need proof, look no further than L.A. Live, the entertainment complex that's formed around the Staples Center in a once-downtrodden section of downtown L.A. over the last decade-and-a-half.

It's no wonder, then, that officials in cities across the country have been so eager to fund arena and stadium construction with public money over the years. Sports and entertainment complexes are the hallmarks of the modern metropolis in terms of both symbolic and economic value.

To be clear, I'm not in favor of spending tax dollars on buildings that ultimately benefit the millionaires and billionaires who own sports franchises vastly more than they do the people who turn out to support the team. Nowadays, civic leaders and public officials aren't quite so quick to fund such construction on the people's dime, not with so many still reeling from the recent recession.

That's partly why L.A.'s latest initiative to bring the NFL back to town has stalled and why many in California's capital continue to agitate against the development of a new home for the Sacramento Kings.

But that's also what sets Las Vegas apart in this discussion. Both of the dueling arena projects on the Strip are due to be funded with private money, not public subsidies. As such, the groundswell of residents working in opposition to the arrival of an NBA team or the facilities to attract one wouldn't be so large.

Is Vegas Ready?

LAS VEGAS - FEBRUARY 18:  Kobe Bryant #24 of the Western Conference speaks to a teammate during the 2007 NBA All-Star Game on February 18, 2007 at Thomas & Mack Center in Las Vegas, Nevada.  NOTE TO USER: User expressly acknowledges and agrees that, by do
Jed Jacobsohn/Getty Images

The bigger question for the NBA, as far as the locals are concerned, is whether there are enough of them to support a franchise—to fill the seats, to watch the games on TV, to purchase memorabilia and so on.

This is a trickier concern to address. According to Nielsen, Las Vegas is home to the 42nd-largest local TV market in the country, with about 726,000 TV-watching households. That's approximately 4,000 fewer than 41st-ranked Oklahoma City, but significantly more than Memphis (50th) and New Orleans (51st).

Still, the league can't be too thrilled with the idea of adding a relatively small market to the mix. After all, why would the NBA's current crop of 30 owners want to sacrifice their own slices of the revenue pie when the city and the team joining the fray wouldn't do much to appreciably expand said pie?

In short: Because cities don't stay the same size.

According to Forbes, Las Vegas was the third-fastest growing city in the US in 2012, with population jumps of 1.7 percent from the previous year and 43.6 percent since 2000—to just over 2,000,000 people.

These increases, while staggering, aren't entirely surprising. Real estate is cheap and plentiful in Las Vegas' suburbs, which were hit hard by the bursting of the housing bubble. More and more families are moving to the outskirts of Sin City, where they can find quality housing at bargain-basement prices while seeking gainful employment in the surrounding area.

Demographic factors like these might not be exciting to sort through, but they're of vital importance to the NBA, which has to look out for the best interests of its constituent clubs over the long haul. From that viewpoint, Las Vegas, if it's not ready to support an NBA franchise now, may well be able to in the not-too-distant future.

That is, if the NBA is amenable to the presence of sports betting or if the Nevada Gaming Commission is willing to step in accordingly.

Back in 2005, the NGC voted unanimously to prohibit betting on events related to All-Star Weekend as a prerequisite of sorts to the city submitting its final bid for the event. Regulators acted similarly during the 1983-84 season, when the Utah Jazz played 11 games in Sin City.

If there were any inkling that the NBA was plotting a more permanent presence in Las Vegas beyond the summer league, surely the NGC would once again bend its own rules to satisfy all parties.

Relocation or Expansion?

Sep 30, 2013; St. Francis, WI, USA; Milwaukee Bucks owner Herb Kohl speaks with the media at Milwaukee Bucks Training Center. Mandatory Credit: Mary Langenfeld-USA TODAY Sports
Mary Langenfeld-USA TODAY Sports

All of which leaves but one question, if not the question: By what means would a team come to call Las Vegas home? Could a current team relocate, or might expansion be the way to go?

At present, there wouldn't seem to be many teams ready, willing and able to uproot their operations.

The Philadelphia 76ers, Memphis Grizzlies, Charlotte Bobcats, Cleveland Cavaliers, Sacramento Kings, Golden State Warriors, Brooklyn Nets, New Orleans Pelicans, Oklahoma City Thunder, Detroit Pistons, Washington Wizards and Atlanta Hawks have all changed hands within the last decade. The Minnesota Timberwolves are still owned by 72-year-old former senator Glen Taylor, but they have committed to a future in Minneapolis through 2032 after agreeing to a renovation of the Target Center in conjunction with the city.

The market for NBA franchises has slowed considerably amid skyrocketing valuations. The most recent collective bargaining agreement has made teams better buys than ever by controlling the costs associated with player contracts and increasing ownership's share of revenues. As a result, few (if any) are looking to cash out, preferring instead to see their assets appreciate in value.

That will be even more the case once the NBA's TV contracts expire in 2016, at which point there figures to be a fierce bidding war for the league's broadcast rights among the various networks—all of which value live sports programming more than ever.

The lone exception, at least for the moment: the Milwaukee Bucks.

In mid-December of 2013, longtime owner Herb Kohl announced that he'd initiated a search for new ownership partners to help him pay for the renovation of the 25-year-old BMO Harris Bradley Center and, in turn, keep the team in Milwaukee.

"Without new investors and without a new facility, would we at some point lose the Bucks? Yes," Kohl said, via Katie DeLong and Myra Sanchick of Fox 6 Milwaukee.

Which, however sad, remains all too true. Last September, Adam Silver characterized the Bradley Center as "unfit" for the Association.

"At the end of the day compared to other modern arenas in the league, this arena is a few hundred thousand square feet too small,” Silver told the Business Journal. “It doesn’t have the sort of back-of-house space you need, doesn’t have the kinds of amenities we need."

A broader ownership base, one with the resources needed to either bring the Bradley Center up to the state of the art or build a new facility that is, would serve that purpose.

And it would ensure that the Bucks don't end up in Las Vegas, Seattle, Vancouver or any other unoccupied market in which the NBA has expressed interest in recent years.

A Bigger (Better?) NBA

OAKLAND, CA - DECEMBER 11: Dallas Mavericks' owner Mark Cuban watches his team face off against the Golden State Warriors on December 11, 2013 at Oracle Arena in Oakland, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloadin
Rocky Widner/Getty Images

That leaves expansion as the best option at the league's disposal for growing basketball's geographic footprint across North America. Silver spoke on the subject during the aforementioned luncheon in Milwaukee, saying that the league was "not even considering expanding right now."

Not two months later, Mark Cuban, the eccentric owner of the Dallas Mavericks, was heard singing a different tune.

Cuban told Eddie Sefko of the Dallas Morning News in November of 2013:

I just think the price of the expansion fee has to be so high that the NBA owners think, "OK, we’re crazy not to do it." What that number is, I don’t know. But I’m open to it. It just depends on the price. If it’s the price of the last one, no. I thought that was a huge mistake and I voted against it. It just depends on the price.

The mistake to which Cuban is referring: the Charlotte Bobcats, who played their inaugural season in 2004-05. Former 'Cats owner Bob Johnson paid an expansion fee of $300 million to round the NBA's membership up to 30 teams.

Don't get Cuban wrong, though. He believes the league will expand before it sees another relocation, which makes sense in light of the backlash to the Seattle SuperSonics' exodus to Oklahoma City in 2008.

Chances are, the NBA would expand to Seattle before tossing its tentacles elsewhere. The city clearly has the infrastructure, the interest and the potential ownership to support a franchise, as evidenced by the impressive but unsuccessful bid to pry the Kings from Sacramento recently put together by wealthy Seattleites Chris Hansen and Steve Ballmer.

Las Vegas' best bet, then, would be to convince the league to expand to two markets at once. The NBA has a Noah-like history of admitting members in pairs. The Miami Heat and Charlotte Hornets came into being in 1988, the Minnesota Timberwolves and Orlando Magic followed suit in 1989, and the Toronto Raptors and Vancouver Grizzlies both brought basketball north of the border in 1995.

With Las Vegas and Seattle coming in tandem, the NBA's higher-ups could then consider a number of other contingencies, including moving some of the West's most misplaced members (i.e. the Memphis Grizzlies and the New Orleans Hornets) into the Eastern Conference.

In any case, the basketball landscape isn't likely to shift in any meaningful way for some time.

Ground has yet to break on the sites of either of Las Vegas' arena proposals. The MGM-AEG project is expected to begin construction in April or May, with opening day targeted for spring of 2016, notes Alan Snel of the Las Vegas Review-Journal. The All Net plan has yet to be submitted to the Clark County commissioners, but it should begin its journey through the proper municipal channels by the end of January (per the Review-Journal).

There's still a long road ahead for pro hoops to make its way to Sin City. But, in due course, the squeaking of sneakers and the bouncing of leather balls on the hardwood could become as common in Las Vegas as the unbroken crackling of jackhammers on the Strip. 

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