OKLAHOMA CITY (OBV) – The Oklahoma City Council approved agreements that will keep the NBA championship-contending OKC Thunder in the city for many years to come.
The council signed off on the following agreements to keep the Thunder in OKC through at least 2053, which is 25 years after the expected completion of a new Paycom Center arena that is being built to host Thunder games:
- Arena Use License Agreement
- New Arena Food and Beverage Agreement
- Amended Facility Management Agreement
- Preferential Rights Agreement
“Becoming a big league city has changed us forever, as the last few weeks have reminded us,” Mayor David Holt said. “Since 2022, we have worked as a community to secure our long-term status as a big league city. This agreement represents the culmination of that work. I thank the team ownership and staff, the Council, the City staff and ultimately the voters and residents for their work to bring about this day. Now, we know officially that our relationship with the Thunder is secure through at least 2053.”
The Thunder are currently playing in the NBA Finals against the Indiana Pacers. They lead the Pacers 3-2 in their quest for their first NBA Championship.
The Arena Use License Agreement is a 25-year agreement between The City of Oklahoma City, SMG/ASM Global and the Thunder. It includes the following the opportunity for five three-year additional renewals. The 25-year period begins when the Thunder moves into the new Paycom Center in summer 2028. The Arena Use License Agreement must be approved by the NBA before it takes effect.
The Thunder will pay the City of Oklahoma City $1 billion if the team leaves OKC within the first five years of moving into the new Paycom Center. They will pay the City $850 million if they leave in years 6-10. The scale continues for 25 years.
The Thunder will pay the city $58,000 per game to use the new arena. Payments will increase by 3 percent for years 2-5, with annual increases after year five not to exceed 3 percent of the Consumer Price Index.
The city will be responsible for maintenance and operation of the new arena. The team will retain control of the building’s naming rights.
The Thunder will have the option to operate the new arena when the agreement with SMG/ASM Global ends, if the team and the city come to terms.
The New Arena Food and Beverage Agreement is between the City of Oklahoma City, SMG/ASM Global and the Thunder.
The agreement simplifies financial terms for revenue sharing (compared to the past agreement) and updates the terms for local vendor concession revenue sharing. It also requires the operator and the team to agree on the concessionaire. It begins when the new arena opens.
One percent of gross concession sales will be allocated to a repair or replacement fund for food and beverage equipment.
The Amended Facility Management Agreement is a renewal agreement between the city and SMG/ASM Global. It extends through the first five years of the new arena’s opening.
The Preferential Rights Agreement is between the City of OKC and the Thunder. It states that Thunder ownership will have exclusive rights to purchase the existing Paycom Center property within five years of the new arena’s opening.
Thunder ownership will reimburse the city for 50 percent of the cost to maintain the current center if they do not purchase the site within the first two years of the new Paycom Center’s opening.
The existing arena must be demolished within 12 months of purchasing the property if Thunder owners choose this option. Demolition costs paid by the Thunder ownership will be credited against the property’s fair market value purchase price.
The new arena will be at least 750,000 square feet and cost an estimated $900 million.
Oklahoma City voters went to the polls in December 2023 and overwhelmingly approved a sales tax to fund a new $900-million arena that will be the home of the OKC Thunder for many years to come.
The proposition to fund a new arena passed with 41,129 (71 percent) YES votes and 16,797 (29 percent) NO votes.
The Thunder’s new arena is being built in downtown Oklahoma City in the space that was previously occupied by Prairie Surf Studios, which was the production location of the hit movie Twisters as well as the first season of the popular Paramount Plus show, Tulsa King. The building originally opened in 1972 as the Myriad Convention Center. Its name later changed to Cox Business Services Convention Center before inevitably becoming Prairie Surf Studios.
Demolition of Prairie Surf to clear space for the new arena began in March.
The new arena is being funded in part by a 72-month, one-cent sales tax that will start when the MAPS 4 tax ends and will not increase the sales tax rate. MAPS 4 is the latest phase of OKC’s ongoing city revitalization initiative that began with the original MAPS in 1993.
MAPS 4 funding is providing $78 million for the arena. The Oklahoma City Thunder ownership group is kicking in $50 million.
“Now we can build upon this foundation, knowing that we will be a Big League City for another generation,” Mayor David Holt said in 2023. “My gratitude to the campaign team, the Greater OKC Chamber, the City Councilmembers who supported this, the City Manager and his team, the team at our arena, the coalition partners, the OKC Thunder and the NBA. Most of all, thank you to the voters. The people of OKC won tonight. You get the game ball.”
The arena will also serve as a venue for concerts and other major entertainment events.
Holt and City Manager Craig Freeman presented the arena plan to the City Council in September 2023 and requested that the plan be sent to voters for a Dec. 12 election. They also presented a letter of intent signed by Oklahoma City Thunder Chairman Clay Bennett, committing the Thunder to play 25 years in the new arena if voters approve the one-sent sales tax and legal documents are signed. The City Council approved that letter of intent, and Holt cosigned it following the council’s approval.
“We are deeply grateful for the confidence and pride our citizens have expressed in the future of our city. We also appreciate Mayor David Holt for his leadership and relentless passion to elevate Oklahoma City at all levels,” Bennett said following the December 2023 vote. “With this project we will be doing more than just building a world-class sports and entertainment complex, we will be propelling Oklahoma City toward the next generation. This new home for the Thunder will serve as an iconic centerpiece of our vibrant and modern downtown and continue to represent the values of our city and its people. As we take the next step in this historic journey, I am particularly grateful and energized by what this means for our city’s young people and the Oklahoma City they will lead and enjoy over the coming decades.”
NBA Commission Adam Silver issued a statement praising Oklahoma City residents for backing the new arena.
“A signature of the Oklahoma City Thunder, beyond the team’s success on the floor, has been their deep connection to their fans and their community. This vote for a new arena is another example of that bond,” Silver said. “We are grateful to the people of Oklahoma City for the confidence they have shown in both the Thunder and the NBA as we embark on a new era of global sports and entertainment.”
The Thunder will continue to play home games at its current home arena, Paycom Center, until the new one opens.
The new arena’s target completion date is June 2028. There is a contractual obligation to open the new arena by June 2029.
Paycom Center has been around for over two decades. The MAPS sales tax initiative funded the $89.2 million arena, which was initially referred to as the MAPS Sports Arena. It opened in June 2002 with a new name, the Ford Center. The name was changed to Chesapeake Energy Arena in July 2011, and then to the Paycom Center in July 2021.
The Thunder and various entertainment attractions at the Paycom Center have been a boon to Oklahoma City’s economy and workforce.
Economic impact studies cited by city officials state that the Thunder has an annual economic impact of $600 million and 3,000 jobs.
The Thunder generated $55.8 million in direct spending in the pre-COVID 2018 calendar year, according to Greater Oklahoma City Chamber data.
Thunder games attract droves of fans from OKC and out of town, which brings large revenue to businesses in the city. In-town game attendees spend an average of $75 per game in gameday-related expenses, and Thunder fans from out of town spend $237 per game on expenses that include food, lodging, fuel and retail, Greater OKC Chamber 2023 data shows.
The current arena is 581,000 square feet, the smallest in the NBA by square footage. It seats only 18,203 people for NBA games. It was originally designed to meet National Hockey League requirements. It is also the second-cheapest arena in the NBA, having received a total investment of around $200 million – far less than the most recently built NBA arenas, the Chase Center in San Francisco, which opened in 2019 and cost $1.4 billion to build, and 2018’s $524-million Fiserve Forum in Milwaukee.
Building a new arena is vital to meeting the needs of an elite NBA team, which is necessary to keep the Thunder in Oklahoma City, as well as ensuring top concert and entertainment attractions come to OKC, city officials said.
“The Paycom Center is not capable of securing a long-term lease with an NBA team. Meanwhile, there are U.S. markets larger than Oklahoma City that don’t have an NBA team, some of which already have or are planning an NBA-ready arena,” city officials said. “Also, without a new arena, it will prove more and more difficult for Oklahoma City to retain and attract new major concerts, family shows, and other similar events.”
