Magic Blames 11-Year-Old Arena for Losing $38 Mil in Last Four Years

ORLANDO-In an unprecedented move and with hopes of swaying the city into building a new arena, Orlando Magic owner Rich DeVos is disclosing for the first time that his team has lost $38 million over the last four years and probably will lose another $10 million a year over the next two seasons playing at the Downtown 11-year-old, 17,000-sf TD Waterhouse Centre.

DeVos blames a limited number of skyboxes and expensive club seats, falling attendance and rising player salaries for the Magic’s financial dilemma. The city says public sentiment isn’t supporting the construction of a new $250-million basketball court and that, although the city doesn’t want to lose the Magic, DeVos will have to solve his own money problems.

For example, the influential 5,000-member Central Florida Hotel Motel Association is adamant against using any part of tourist tax money for a new sports house. The hoteliers feel the tourist tax should be used to promote the hospitality business, not sports.

As for renovating, expanding and updating the existing arena, DeVos is willing to contribute only an amount comparable to what most other owners in the league have given in similar situations–between 11% and 29% of the cost. And that’s the rub. Nobody yet knows what it will cost to put a new face on the TD Waterhouse Centre. A city-commissioned study is due in March, supposedly detailing expenses involved. The arena cost $110 million when it was built in 1989.

On a $250-million project, for instance, the billionaire owner of the National Basketball Association franchise would kick in a minimum of $27 million and a maximum of $72 million. The balance would be footed by taxpayers, many of whom are not rabid Magic supporters. The team currently is fifth in the Eastern Conference standings with nine wins and 13 losses for a .409 batting percentage.

“Loyalty has never been a hallmark of the Orlando sports fan,” Tom Cooke, vice president of development in the Orlando division of Carter & Associates-ONCOR International, tells GlobeSt.com. “The Orlando fan wants a winner and will settle for nothing less, unlike many cities where fans will back their losing teams for years, waiting for a championship.”

DeVos’ fortune is derived largely from Amway, the Michigan-based retail sales organization he co-founded 25 years ago. He bought the Magic from Louisville, KY horse breeder William duPont in 1991 for $85 million. The team is currently valued at $165 million, according to Forbes magazine.

Attendance this year at Magic home games is expected to average below 13,000. Paid attendance last season was 14,059, the lowest in the team’s history and the fourth consecutive year of sagging attendance, according to the team’s own figures.