When the National Hockey League season got canceled, the owners of luxury suites at Fleet Center in Boston got a refund for part of the $200,000 they spent to see Bruins and Celtics games.
A generous accommodation was made to Arrowhead Pond suite holders, who got a refund or a credit with 5 percent interest on money they paid to see Mighty Ducks games.
Not at Staples Center.
Bills sent out for the 2005-2006 season, which also includes Lakers, Clippers and other games and events, made no mention of any credit or refund for the 41 L.A. Kings home games lost.
In fact, prices went up by between 3 percent and 7 percent, to as high as $360,000 for one of the 160 suites. And there’s no guarantee there will be an NHL season this year either.
That’s ticked off some suite holders who believe they are being treated unfairly. All Kings season-ticket holders received their money back or credits for the next billing cycle, while corporate sponsors that committed to additional ad space at Kings games were not billed for the hockey season.
“They should have come forward with some form of compensations for the missed Kings games,” said Norris Bishton, president and chief executive of the Noarus Auto Group, which owns five area dealerships. “I am surprised and disappointed. There has been no communication nothing.”
While they’re mad, there’s nothing much that suite holders can do, with the exception of giving up their suites to one of the 24 parties on the waiting list to grab them up. (So far, no one’s done so.)
Each contract guarantees that suite holders are entitled to 150 events per year essentially, most every event that takes place at Staples with the exception of the Grammy Awards, which is operated by an outside promoter.
To fill in some of the gaps, arena owner Anschutz Entertainment Group scheduled nearly 40 concerts the most ever and again secured the X Games, the Women’s Tennis Association Championships and the Pac-10 men’s basketball championships and boxing matches.
“Am I saying at the end of the day that I feel like we have completely made it up to them? No,” said Tim Leiweke, president and chief executive of AEG. “I’m not asking them to do back flips because we missed hockey. But the majority of suite holders I’ve talked to are very aware of how aggressive we’ve been to fill in the blanks and they’re very appreciative of that.”
Team ownership
Some of the fan dissension stems from the belief that officials at AEG which has a stake in the Kings should have known in advance that the hockey season, scheduled to start last October, would begin late or be lost altogether.
After the season was canceled in February, some fans say that Staples Center salespeople led them to believe they would be compensated.
“Nobody made any specific promises but the (sales team) implied that there would be a credit of some sort for the Kings season not played,” said Fritz Hitchcock, owner of Hitchcock Automotive Resources, which owns six dealerships in L.A. and Orange counties. “I feel it was absolutely not a class act to not do something for us.”
AEG officials maintain that their suite customers are still getting a better value than at any other arena nationwide, if for no other reason than Staples Center is busier than the rest.
The venue will host nearly 200 events during the current billing cycle and officials anticipate hosting close to 250 events next year if hockey returns.
Staples Center suite holders will pay $250,000 to $360,000 for the 2005-06 season, depending on the location and whether the suite has eight, 10, 12 or 14 seats. The length of the contract and how long the customer has been a suite holder also factor into the price.
“There are many events and I mean many that we ultimately go out and get and take a loss on boxing in particular,” said Leiweke. “The reason we (schedule them), in large part, is value added to our suite holders. We were more aggressive this year than ever before with boxing and concerts to make up for the loss of the Kings dates.”
So far, no one at L.A., Anaheim or Boston has given up their suites because of the NHL crisis.
Staples Center lost about 10 customers since the venue opened due to companies going out of business or filing for Chapter 11 bankruptcy protection. UAL Corp., for instance, gave up its suite as part of its plan to reorganize United Airlines. And Shaquille O’Neal relinquished his suite when he was traded to the Miami Heat last summer.
When AEG first began selling suites 1 & #733; years before Staples Center opened in 1999, the Lakers and the Kings were the only teams that had agreements to play there. The first suite deals guaranteed only 80 events per year and the suites sold out a month after the arena opened. While prices have risen since then, the increase has been part of a set schedule, and no hikes were passed along when the Clippers, Sparks and Avengers signed up, or when concerts or other events were added.
Within two years of the arena’s opening, enough teams, concerts and other events had agreements to perform at Staples Center for management to guarantee 150 events annually.
Suite holders with 10-year agreements have had prices increase at 3 percent per year, while those with five-year deals get 5 percent increases and those with three-year deals, 7 percent.
Besides the hockey lockout, there have been other well-publicized blows to suite holders. The Lakers, after trading away O’Neal, missed the playoffs for the first time in years. When labor trouble began to threaten the hockey season, Bishton said he did not believe it would be lost entirely.
“They were negotiating,” he said. “No one thought they would be that stupid the management and the players.”
Leiweke maintained he was optimistic last summer that some or all of the hockey season would be salvaged. “Was it possible that could happen? Yes, we knew that,” he said. “But it was our hope and continues to be our hope that we find a way to make a deal and get the Kings back on the ice.”
Different approaches
Other arenas around the country offered a variety of perks as a way of maintaining their fan base.
Suite holders and season ticket holders at Arrowhead Pond, for instance, were offered a refund or credit, plus a 5 percent interest rate for the Mighty Ducks games that were lost. (Season ticket holders paid a 50 percent deposit before the season started.)
Fans who took the refund did not lose their seating rights a right that would have been lost at Staples Center for anyone who demanded a refund on their $100 deposit.
“They obviously wanted to see hockey,” said Alex Gilchrist, spokesman for the Ducks. “But given that there is no collective bargaining agreement in place, we gave them every option. They didn’t lose a cent.”
The Fleet Center, home to the Boston Bruins, took peace-making efforts further.
In addition to a refund or credit with a 15 percent interest rate, that arena is giving suite holders complimentary entry to more than 40 events, including U2, Paul McCartney or Elton John concerts. (Fleet’s suite package is set up differently from Staples. The $175,000 to $225,000 annual fee includes all Bruins and Celtics games, while other events are purchased a la carte.)
“Legally we’re not required to return any of the premium,” said Jim Delaney, director of marketing for the Fleet Center. “But we feel obligated to return something of value back to them. These clients have purchased these (suites) primarily for business entertaining. They’ve lost roughly a third of their entertainment value.”
For the coming season, with or without hockey, Staples Center has scheduled the third X Games (11 days), the fourth WTA Tour Championships (six days) and the PAC-10 men’s basketball tournament (seven games over three days next March.).
The arena also plans concerts by the Eagles (four days), Neil Diamond (three days), U2 (two days) and Paul McCartney (two days).
Still, as long as the Kings are absent, not everyone will be happy. “The 150 events that’s not what people are bargaining for,” said Hitchcock.
Then again, things could be worse.
“The suite holders expected to get the three major tenants the Lakers, Clippers and Kings. What if this had been the Lakers who didn’t have a season and these guys had tried to swallow the money?” he said. “There would be a lot more hue and cry, let’s face it.”
