If the National Hockey League lockout lasts the entire season, the Arrowhead Pond of Anaheim will lose millions of dollars in income from 45 canceled Mighty Ducks games.
But these are hardly dark days for the 11-year-old, city-owned arena that spent its first decade swimming in debt.
The 19,000-seat facility is finally approaching profitability after completing a record-breaking year for concerts and gross ticket revenue. It also has sold its 84 luxury suites, and its new management company, H&S Ventures, is in negotiations to buy the Ducks.
And then there's always the hope that the Pond will land the best of all sports anchors -- a National Basketball Assn. franchise. Although the arena appears no closer to landing an NBA team than it was a decade ago, the quest continues.
"l won't stop until an NBA team lands at the Arrowhead Pond," said Tim Ryan, president of Anaheim Arena Management, which is owned by H&S Ventures.
Over the years, arena football, indoor soccer, boxing and roller hockey have been booked to help compensate for the lack of an anchor team. But none of the lower-tier sports lasted more than a few years during a decade of financial losses for the Pond, then managed by Ogden Entertainment.
The arrangement with Ogden, later called Covanta Energy, called for the company to pay the construction bill of more than $100 million in exchange for the operating profits. The city provided the land and was not exposed to any financial liability. H&S Ventures took over management of the Pond in December 2003 from bankrupt Covanta, which lost about $30 million over 10 years of operating the arena.
The new deal called for the city to get 20% of the profits above the first $12 million, which goes to Anaheim Arena Management. In the seven months of the new deal ending June 30, the arena made $4.2 million before debt service and depreciation.
Greg Smith, Anaheim's convention, sports and entertainment director, said the current deal gave the city a better chance to share in the arena's success.
"We still don't have a risk, but we have a much higher likelihood of sharing in the profits," Smith said. "If the NHL wasn't on strike, I think we could have reached the threshold this year."
While arena management waits for an end to the NHL lockout, the Anaheim Storm lacrosse team opened its second season Saturday. Although the number of National Lacrosse League fans pales in comparison to NBA numbers, Ryan said he was excited to be in on the ground floor of a niche sport.
But lacrosse had nothing to do with the Pond being ranked fourth in the world by Billboard magazine for gross ticket sales that exceeded $34 million.
The Pond cashed in on performers Prince, Madonna, Rod Stewart, Barry Manilow, Phil Collins, Van Halen and Simon & Garfunkel. The arena, which had staged about 25 concerts a year, had 41 concerts in 2004, including eight of Billboard's top-10 tours.
"Attitudes toward Orange County have changed significantly over the last 11 years, because of population growth, income levels and 'The O.C.' television show, which has helped make Orange County a very well-known commodity in our industry," Ryan said. "It's a huge plus for entertainers to reach two major markets, Los Angeles and Orange County, without ever getting on a plane."
The concert season, special events such as the U.S. Olympic Gymnastic Trials, the post-Athens gymnastics tour, the Wooden [basketball] Classic, Disney on Ice and the booking of next summer's World Badminton Championships have offset losses attributed to the NHL lockout, allowing Pond management to increase full-time executive staff positions by 10%.