San Francisco’s new basketball arena hasn’t even opened yet, and at a cost of around $1.3 billion is 30% over budget — yet it’s apparently already profitable.
That’s because the arena has already sold $2 billion in tickets, luxury suites and sponsorships, according to Rick Welts, president of the NBA champion Golden State Warriors, on Bloomberg News’s Business of Sports podcast.
“The perfect market, perfect time — the Bay Area is on fire,” Welts told Bloomberg, referring to the area’s booming tech-based economy. “Couldn’t be a better economic time. Couldn’t be a better basketball team.”
The Warriors are scheduled to move into the new 18,000-seat arena — dubbed the Chase Center, thanks to a naming-rights deal worth a reported $300 million with JPMorgan Chase & Co. JPM, +0.52% — in October. Other big corporate sponsors include United Airlines UAL, +1.50% , PepsiCo Inc. PEP, +0.58% , Accenture ACN, +0.51% , HP Enterprise HPE, +1.11% and Alphabet’s GOOGL, +0.39% Google Cloud, according to the arena’s website.
“The corporate sponsorship side has found a real sweet spot with what’s going on in our industry right now, and the companies are looking to invest in sports,” Welts told Bloomberg.
The Chase Center is one of the few privately funded sports venues in the country, and its financial success could help shoot holes in the arguments of billionaire team owners who demand taxpayer-funded new stadiums.
And it’s not just basketball that’s generating money for the arena. A slate of concerts has been announced starting Sept. 6, when Metallica and the San Francisco Symphony will christen the Chase Center. Other big bands tapped to be among the arena’s first concerts include the Dave Matthews Band, the Chainsmokers and the Black Keys.
Besides 40-plus Warriors home games every season (more if you include playoffs, which the Warriors have in recent years), the arena intends to be a major draw for concerts and other events, such as World Wrestling Entertainment Inc. WWE, +0.91% smackdowns, holding a total of more than 200 events a year.
“We are not just a sports team, we are now an entertainment organization,” Warriors owner Joe Lacob said recently, according to the San Francisco Chronicle.