Poppa P's Prognostications? They center around Major League Baseball, the National Football League, and the two most likely (and intriguing) locations for new pro sports stadia. And why.
On Friday, 19 August 2022, Smith Entertainment Group announced that it has accepted what is termed as both a "substantial" yet "minority investment" from Arctos Sports Partners.
According to the news release, the stated two-fold purpose of the Arctos investment in, and partnership with, SEG is to
- "Bring a third professional sports franchise to the state," and to
- "Build a premier sports and entertainment center (in Utah)."
SEG is the majority owner of the
- Utah Jazz (NBA),
- Real Salt Lake (MLS),
- Vivint Arena,
- Rio Tinto Stadium,
- The Salt Lake City Stars (NBA G League),
- Utah Jazz Gaming (NBA 2K League),
- Real Monarchs (MLS NEXT Pro),
- The Zone Sports Radio Network, and
- Other Utah-centric business ventures.
In addition, SEG currently manages the Salt Lake Bees.
Conversely, Arctos is self-described as "a private investment platform focused on professional sports franchises in North American leagues and European Soccer," and (according to Sports Business Journal), the firm holds ownership stakes in over 25 professional sports groups and franchises.
According to its latest ADV filing with the U.S. Securities and Exchange Commission, Arctos began 2022 with over $3.94 billion in assets under management (AUM), which is not a number to shake a stick at, especially considering the firm was just launched in 2019.
However, during the first week of May, Arctos raised an additional $1.1 billion in its Fund II, jumping its AUM to more than $5 billion.
According to Ryan Smith, SEG chairman,
“My wife Ashley and I are passionate about the state of Utah and are committed to building organizations that can be a unifying force in our community. Few things do that as powerfully as sports. We are excited to partner with Arctos. They are committed to Utah and to investing in this community and our sports teams and facilities. As SEG continues to build out the professional sports landscape in the state, the Arctos partnership brings strong commitment to Utah sports and a deep connection across all major sports leagues.”
A Second Bite at Utah's Sports Apple for Arctos
It's worth noting that this is not the first time Arctos has come to play in Utah's professional sports marketplace.
Specifically, when Real Salt Lake announced on 5 January 2022 that Major League Soccer had approved the sale of RSL and related assets and properties to SEG and David Blitzer, there buried near the bottom of the press release was this tidbit:
"... Arctos Sports Partners ... joins the Real Salt Lake ownership group as a limited partner."
According to my research, here are just 14 of the over 25 professional sports franchises, teams, and/or ownership groups that I have been able to verify that Arctos has ownership positions in today –
Major League Baseball:
- Boston Red Sox;
- Chicago Cubs;
- Houston Astros;
- Los Angeles Dodgers;
- San Diego Padres; and
- San Francisco Giants;
Major League Soccer:
- Real Salt Lake;
National Basketball Association:
- Golden State Warriors; and
- Sacramento Kings;
National Hockey League:
- Minnesota Wild;
- Pittsburgh Penguins; and
- Tampa Bay Lightning;
Professional Sports Teams/Franchises Outside the United States:
- Atalanta Bergamasca Calcio (Italian Soccer League); and
- Liverpool FC (Premiere League in England).
{NOTE: As of today, the NFL bars professional investments in its teams.}
According to Arctos Partner, Chad Hutchinson,
"We believe SEG is poised to be the next big sports and entertainment group.... Arctos works with visionary ownership groups, and Utah has that in SEG. Their commitment to giving back to the community and building world-class franchises align perfectly with Arctos’ mission. We are excited to work with Ryan and the team to explore more sports-related opportunities around the state and the opportunity to build a premier sports and entertainment center here.”
What's Next? Poppa P's Prognostications.
Given current league restrictions preventing team ownership by professional investors, I believe that bringing an NFL franchise to Utah is the least likely scenario of all ... at least in the near-term.
Of the two other prominent major league sports in the United States, baseball and hockey, both have done relatively well, attendance-wise in the greater Salt Lake City marketplace.
However, I also believe it's somewhat notable that minor league hockey is still relatively new in Utah (less than 30 years), while minor league baseball has been played in the state for over a century.
Of the two leagues, it's interesting to note that the NHL only attracted 20 million fans over the 2021/2022 season.
Conversely, through June 12th this year, MLB attendance league wide has surpassed 22 million, which puts Major League Baseball on a path to hit close to 50 million this season.
As you probably know, the Salt Lake Bees already play in Salt Lake City at the currently named Smith's Ballpark, a 14,000-ish seat stadium.
Realistically, however, there is virtually zero chance that the state of Utah, Salt Lake City, Salt Lake County, and/or Major League Baseball would try to squeeze in an MLB-sized stadium where Smith's Ballpark currently resides.
No, I suspect it would be more likely for an MLB franchise owner to partner with the state, city, and/or county to bulldoze the Utah State Fairpark to build a state-of-the-art MLB stadium there.
Clearly, dropping in a professional stadium into this area would be highly disruptive, and transformative, to the local community.
But it would be located on the TRAX Green Line, allowing fans to reach the stadium via rapid transit.
Conversely, vehicular traffic could be funneled into the area primarily via the 600 North exits on both Interstate 15 and Interstate 80.
{NOTE: An alternative to the Fairpark location is tearing down the State Tax Commission building and erecting a stadium there. This would be less disruptive community-wise, but would probably be more expensive because it would require
- Moving the Tax commmission, and
- Would likely entail installing another exit on I-80.}
The other strong option would be building afresh on top of the old state prison site at the Point of the Mountain.
The challenge with this site, of course, is that it's not in Salt Lake City.
But the population center of the state is migrating south of SLC and closer to Utah County each year, so The Point becomes an intriguing alternate as well.
Hockey-wise, the Utah Grizzlies currently play at Maverik Center in West Valley City, Utah, an adequate site for a minor league squad with a seating capacity of 12,000; unfortunately, this is probably 50% fewer seats than would be required for an NHL team.
Throw all of these points into a blender and what do you get?
Well ... from my perspective I believe landing an MLB franchise in Utah is slightly more likely than an NHL team for several reasons:
- An MLB season has less overlap with an NBA season versus an NHL team, something I believe would be a critical consideration today for an ownership group like SEG;
- Although attendance prior to the COVID-19 pandemic had been trending slightly downward for the MLB, the 50% higher attendance numbers of the MLB are too great to ignore; and, to be honest,
- Landing an MLB franchise first makes it probably easier to land an NHL franchise and not the other way around.
Hence, I predict Utah will land an MLB franchise before it secures an NHL or NFL team.
Location-wise, I suspect there will be a lot of pressure to locate an MLB stadium at the old prison site, especially since the prison is getting razed anyway; however, the Fairpark site is more logical due to the hotel room supply in SLC, something that puts the former prison site at a severe disadvantage.
Last point: With Arctos as an investment partner, Smith Entertainment Group will have access to all of the capital it needs to bring the next major league sports franchise to Utah, and that includes building out the new stadium/arena.
Total price tag? Probably between $2 billion to $2.5 billion, all-in, team, stadium, and all of the ancillary costs.
Time frame? I suspect we'll have an announcement in 6-18 months, with a new team ready to begin play in Utah by 2025.
So ... there ya have it, straight from the sports-addled mind of Poppa P.
One More Thing: About the NFL. And College Football.
IF I'm correct about Major League Baseball coming to Utah next, you actually make it somewhat easier to build another stadium "next door" at the current Fairpark site (or at the Tax Commission site), essentially situating them side-by-side.
Here again, I believe the concentration of hotel rooms in Salt Lake City is the deciding factor as it as it makes it dramatically easier to accomodate visiting fans during the 10 home games of an NFL season.
Additionally, such a western SLC location could also create a very intriguing venue for a possible annual college football bowl game or even a pre-season CFB tilt.
Hmmmmm ... now isn't that an interesting thought?
SOURCES
- Dallas Innovates, "Follow the Money: Zimperium Acquired, Arctos Sports Partners Eyes New Fund, Dallas Venture Capital Makes Two Investments, And More," 4 April 2022
- Front Office Sports, "Arctos Sports Partners Grows MLB Portfolio to Six Teams," 16 March 2022;
- FT, "Why private equity newbie Arctos is making prolific bets on sport," 6 January 2022
- Sports Business Journal, "Arctos Sports Partners invests in Elevate," 11 May 2022
