Erie County Executive Mark Poloncarz announced last week that the county will be “walking away from its responsibility” towards KeyBank Center when its lease expires later this year.[1]
“The city owns the land, the county owns the building and is leasing it from the city, which is then subleased to an organization that subleases it to the Sabres.”[2] County Executive Poloncarz expressed that his goal is to “eventually get the county out of that.”[3]
For Poloncarz, the biggest concern and the reason for an exit from the lease is future costs. “We’ve had some costs over the years, nothing huge, but I am concerned as it gets older, there will be more costs associated with it.”[4]
The Sabres are responsible, under the current agreement, for interior upgrades at KeyBank Center, but Poloncarz appears confident that future renovation costs may fall on the county.
In response to the comments by Poloncarz, Pete Guelli, COO of the Buffalo Sabres, stated that “[w]e have always maintained an exceptional relationship with Mark Poloncarz and Erie County . . . The current lease provides a number of options that will allow us to find a solution for everyone involved that will ensure the long-term success of the Sabres at KeyBank Center.”[5]
So, if Erie County walks out, then who comes in?
One possibility is that the City of Buffalo takes over KeyBank Center’s lease. Some have expressed concern over this option because “[o]perating the arena costs millions of dollars a year and the city is already in a $50 million deficit.”[6]
Another option is that “owner Terry Pegula could just buy the arena and own it outright.”[7] In this scenario, Mr. Pegula “has all the negotiation power in the future.”[8]
In 2024, the Buffalo Sabres were valued at $1.15 billion, ranking them 30th in the league.[9] Terry Pegula purchased the franchise in 2011 for $165 million, and the team generates $169 million in revenue a year.[10]
Despite failing to make the playoffs over the last 14 seasons, the Sabres valuation has increased dramatically. We’ll just have to wait and see if this year’s losing record has any impact on the future of KeyBank Center and any decisions Mr. Pegula makes moving forward.
[1] https://www.wgrz.com/article/news/local/erie-county-plans-to-walk-away-keybank-center-lease-when-it-expires-in-october/71-bc404a66-498c-4d9e-afbc-f0dd402851c4
[2] https://www.wkbw.com/news/local-news/who-will-own-keybank-center-after-erie-countys-lease-expires
[3] Id.
[4] Id.
[5] Id.
[6] https://wbuf.com/keybank-center-lease-buffalo/
[7] Id.
[8] Id.
[9] https://www.cnbc.com/2024/11/20/nhl-valuations-2024-buffalo-sabres.html
[10] Id.
Photo Credit: https://sportsmatik.com/sports-corner/sports-venue/keybank-center
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