The Sioux Falls Skyforce (D-League) are walking away from an existing home and a much larger new arena to take up residency at a new 3,000-seat facility. Here’s why it makes business sense.
The Skyforce are an institution in the D-League — a stalwart of the original CBA circuit and a successful member of the current D-League. The team has drawn well at Sioux Falls Arena for years, though recently the crowds have been smaller.
Sioux Falls went through a bruising arena battle this year before city leaders decided to add a new 12,000-seat events center to the existing arena complex. In terms of drawing big-name acts to the area, 12,000 seats makes some sense. But in terms of servicing the existing sports scene — the Skyforce and the Sioux Falls Stampede (USHL) are lead tentants at Sioux Falls Arena — such a large events center makes little sense.
So the Skyforce has been talking about a move to a 3,000-seat arena that’s part of a larger sports complex being built by Sanford Health Systems. The arena would have a classical design, lots of amenities like luxury suites, and be built solely to serve the needs of the Skyforce. (It’s the centerpiece of a 100,000-square-foot training complex.) The new arena is expected to be open in time for the 2013-2014 season.
The business model is one pioneered by the successful Maine Red Claws: Set up shop in a small facility with lots of amenities, create demand and control your own destiny. Minor-league basketball and hockey teams tend to be somewhat passive tenants, never seeking to exert too much control over their venues. In the case of the Skyforce, they’d control their own destiny by working with Sanford on a facility built specifically for their needs. No need to compromise to serve the needs of the annual Ben Franklin Stores distributors meeting.
One complicating factor: the team’s lease at the arena isn’t scheduled to end until the end of that season, which means the Skyforce must negotiate an out. Let the negotiations begin.
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