The Amway Center's Potential | Magic Basketball

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Sep 13

The Amway Center’s Potential

Red Huber/Orlando Sentinel

Via Mark Schlueb of the Orlando Sentinel:

When the Orlando Arena opened in 1989, few people had heard of the newfangled Internet, and mobile phones were the size of bricks.

When its replacement opens Oct. 1, the technology inside the new Amway Center will have changed as much as it has in people’s homes during the past 21 years.

“It truly will be the most technologically advanced arena facility in North America,” Orlando Magic President Alex Martins is fond of saying.

Since the $480 million arena’s conception, Magic and city officials have made technology an integral part of the project, from the 1,100 flat-panel video screens throughout the building to an advanced telecommunications network not much different from the one that controls America’s air traffic.

The state-of-the-art technology means more flash for fans, who will be bombarded with images and sound before they even walk in the door. And just as important for the team’s owner, it also means more advertising cash for the Magic. […]

Advertisers who can afford it will also be able to have their product or name displayed on every screen in the building at the same moment, an opportunity the Magic is selling as “the moment of exclusivity.”

It’s not clear how much the Magic and the city spent on the building’s high-tech features, but the team has the most to gain. Under an agreement with the city, the Magic keep the revenue from the sale of advertising, naming rights and luxury suites in exchange for an annual payment to the city of $1.75 million, an amount that increases 3 percent a year.

As training camp is set to begin in less than a month for the Orlando Magic, it’s very important to note that ownership is paying nearly $94 million in salaries and that’s before the luxury tax is taken into account. This is going to be the most expensive roster in franchise history and Magic fans need to be enjoy this era while they can, because it’s not going to last forever.

The Magic are spending a lot of money to take advantage of Dwight Howard‘s prime and an opportunity to win a championship. That being said, it’ll be interesting to see how much of an influx of revenue Orlando will see and how that’ll impact the team’s ability to continue to pay the luxury tax in future years when the Amway Center opens in less than a month.

That’s a point of emphasis that isn’t being talked about enough and it should be, given that the Magic are a small-market team in the NBA.

Money is nearly no obstacle for the Magic right now, given that owner Rich DeVos has opened up his checkbook the past several years, but it remains to be seen whether or not the investment pays off. Orlando is going to have a tough road ahead in the Eastern Conference, having to deal with the Boston Celtics and the Miami Heat.

More advertising cash means more revenue for Orlando, but how much?

We’ll find out eventually.

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