Seattle Kraken CEO explains why investors paid a premium to bring hockey back to the Emerald City
The Seattle Kraken, the National Hockey League’s 32nd team, will play its inaugural game on Tuesday night in Las Vegas.
For the business minds behind the return of professional hockey to Seattle after a nearly century-long hiatus, the Kraken's first game is a crucial step in a nearly $2 billion investment in the team.
“When people think that there aren't many opportunities left, we found this great frontier called Seattle," Kraken CEO Tod Leiweke said on Yahoo Finance Live (video above). "And we're really bullish on our future."
The Kraken’s ownership group, which includes billionaire David Bonderman and Amazon (AMZN) CEO Andy Jassy, paid a $650 million expansion fee to join the NHL. That was the largest amount ever paid to join the league and worth more than the estimated value of 20 NHL franchises.
Oak View Group, whose president is Tod’s brother Tim Leiweke, doubled down on Seattle hockey in partnership with the Kraken by spending roughly $1 billion on upgrades to what was formerly known as Key Arena. Now Climate Pledge Arena, Leiweke boasted that the Kraken’s home will be “the most beautiful arena in the land.” The venue is set to host the Kraken, the WNBA’s Seattle Storm as well as concerts and other events. (The Kraken also have a new $80 million training facility.)
Those investments are a premium compared to the NHL’s most recent expansion team, the Las Vegas Knights, which paid a $500 million expansion fee in 2017 and currently play in an arena that cost roughly $350 million to build.
'A little bit of pinching ourselves'
Leiweke isn’t new to Seattle sports.
He spent nearly a decade as CEO of the NFL's Seattle Seahawks during the early 2000s and helped start Seattle's Major League Soccer club, the Seattle Sounders.
Now, as the CEO of the NHL’s newest franchise, Leiweke has placed his biggest bet yet on the loyalty and passion of Seattle sports fans. Fans have already shown approval for the logo with their wallets: The team sold 8,000 jerseys within five days of launch, the most ever in that time frame for an NHL franchise, according to the team.
Interest “has far exceeded our expectations," Kraken Senior Vice President of Marketing and Communications Katie Townsend told Yahoo Finance. "I think there is definitely a little bit of pinching ourselves."
Early indicators from the secondary ticketing market display high-levels of interest in Kraken games. The average price of a Kraken ticket is $188 on SeatGeek’s website, double the average price of an NHL ticket. On Ticketmaster, the Kraken’s official ticketing partner, tickets for the home opener on Oct. 23 are listed for no less than $399 and reach as high as $9,999.
"[Seattle] fans are incredible,” Leiweke said. “I think they're the best sports fans in the world. And on Opening Day, we're going to prove that they're pretty great hockey fans as well.”
While ticket prices may fall before game day, Ticketmaster’s listing price speaks to the excitement surrounding the novelty of the Kraken’s inaugural season.
“Our building will be full,” Leiweke said. “The fan response has been incredible, and it really emboldened us to go for it.”
Josh Schafer is a producer for Yahoo Finance.
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