(The full memo is included at the end of this post. The calculations are on an Excel spreadsheet which did not transport well into this post so I am not including it. If you want to see it, send me a request at scarmany@aol.com and I will send it to you directly.)
With an anchor hockey team in the Coliseum in 2003-04, the loss was $259,000. If the Generals Brigade organization had paid the $200,000 they promised, it would have been down to $59,000. Greensboro taxpayers DID NOT pay for this $259,000 loss; it was covered from funds from the concession agreement with Centerplate.
Without the team in the building during 2004-05, the losses have been calculated to be $331,974; this is 28% higher than the previous year with hockey.
In addition to loss of parking and concessions money for 36 games, revenue in three other critical sources (Advertising and Sponsorship Sales, Luxury Suite Leases, and Carlyle Club Memberships) fell for a total loss of $574,399. This amount was offset by $242,425 in savings in operating expenses from not having to staff hockey events, put down the arena ice, clean-up, utilities, etc. to reach the net figure of $331,974.
So the answer to the question - "Were we better off with a hockey team in the building?" - is a resounding "YES" according to this information.
Text of the memo:
Date: June 1, 2005
To: Councilwoman Sandy Carmany, Liaison
War Memorial Commission
From: Coliseum Director Matt Brown
Re: Negative Financial Impact of No Hockey on the Coliseum Operating Budget
Per your request, our staff has calculated the negative financial implications on the Coliseum from not having a Hockey Tenant this fiscal year, a summary of which is attached for your review.
As you may recall, one of the primary reasons for the City Council’s decision to support our recommendation to have the Coliseum operate the Hockey team last year was to protect against the potential loss of revenues from three critical sources of Coliseum annual revenue. Those revenue sources include Advertising & Sponsorships sales, Luxury Suite Leases and Carlyle Club Memberships, which historically have accounted for approximately $1.2M in annual revenue.
Our concern centered on a possible scenario of what if those revenues fell by 20% or $243,000 because of no Hockey. Our staff believed that we could successfully operate the Team at breakeven and in fact came within $59,000 of our goal (not taking into account the failure of the Generals Brigade organization to fulfill their commitment to contribute $200,000).
In fact, our report shows that revenues from those three critical revenue sources fell by 32% or $414,000 without hockey. In addition, the Coliseum also lost revenues from Parking and Concessions from the 36 game home season and from potential higher commission payments from escalating gross Concession sales.
The total loss of revenues to the Coliseum as a result of no hockey is $574,399.
The total revenue loss was partially offset by estimated savings of $242,425 in Operating Expenses from not having Hockey events and from retained revenues that would have otherwise been shared with the hockey team.
Therefore, our calculation of the actual negative financial impact on the Coliseum as a result of no hockey is $331,974 or 28% higher than the $259,000 actual loss incurred by the Coliseum which was offset, not with taxpayer dollars, but with funds from the sale of our Concessions contract to Centerplate. The $331,974 negative impact without hockey is also 48% higher than what we projected the negative impact of no hockey would have on our FY 04/05 operating budget.
Please feel free to contact Laura, Jerome or myself to answer any questions you may have.
CC: City Council, WMC, E. Kitchen, M. Johnson, L. Smith, J. Fletcher
19 comments:
I love it when I'm right..
Could I ask you to put hockey back in the budget - unfortunately, NO.
It would not be right when the budget is so tight and everyone's hand is out so far and big.
It's nice to know that we did make a difference and the coliseum benefited from the hockey being there. Unfortunately, it just did not fall together as planned and there were TOO many things under the table that were agreed to by city and private individuals. I honestly believe that the Generals Brigade would have come through with the money if all the facts were known (based on conversations I have had).
I guess we will have to wait under people leave, die or agree to tell the truth, because hearsay does not mean a thing these days.
Thanks.
Don Moore
At today's commission meeting, Matt reported on his ongoing negotiations with the ECHL for a possible hockey team in 2006/07. He's also exploring an arena football team, but the leagues in that sport keep changing so things are a bit unsettled there.
Why not put Hockey back in the budget Don. The taxpayers have been making up the Coliseum deficit for years, while they have craft shows, monster truck shows and the like. Why leave the Hockey fans out??
All I've heard about the Coliseum's deficits is that it is good for the people of Greensboro to have a facility like this, because it brings people to Greensboro and the deficits are acceptable.
If you're going to operate in the red anyway, why discriminate against the Hockey fans, and leave them out??
I'll believe it when the puck drops or the footballs start flying, and NOT ONE SECOND before then.
Thanks for the information though. It's about time somebody with some stroke held the Coliseum accountable for their actions.
I wish it were as simple as just putting hockey back in the budget, but unfortunately, it's not. Team owner(s)with sufficient financial backing have to be found, contracts negotiated and approved, and a new franchise obtained from the ECHL since the previous one lapsed. That takes a tremendous amount of time and effort.
The same applies to arena football or any other potential sports teams in the Coliseum.
To be perfectly honest with you, the hockey fan base will have little to do with a Matt Brown originated team. His relationship with Monarch's and General's office staff and handling of Booster Club activities have burned too many bridges.
There are just too many bad experiences that surround Matt Brown. He's just not a people person.
It would be a long ladder to climb for him to regain the trust of many hockey fans and even many hockey players (and the players' union and agents).
I'm not saying it could be done, anything is possible.
I believe that it is time to sell the coliseum; or at least quit taking business away from local banquet facilities, theatres and convention facilities. One look at the coliseum schedule and you see events that could have been held at local hotels, banquets facilities around town and even the soon to be closed City Club.
Our tax dollars should be benefiting the citizens, not putting them out of business.
Don Moore
The common thread here that seems to cause the problems at the Coliseum seems to be Matt Brown.
The way he treats the people who come into the Coliseum (both employees and patrons) is simply reprehensible.
Instead of being a gracious host and grateful to his employees for the job they do, he has been known to make rude comments about the events at the Coliseum and those who attend them, and his verbal tirades towards Coliseum employees are the stuff of legend.
If anyone needs to be replaced, I say it is Matt Brown. I am ashamed that he is such a prominent representative of and for my hometown.
Mike Bondurant
If the problem really is Mike Brown then it is the City's RESPONSIBILITY to get rid of him...or at least take him out of that role.
I mean I'M ALL FOR CHANGE especially if it is for the betterment of our city.
I personally love Hockey...I went to Monarchs and Generals games...and catch as much on the TV as I can. I for one would volunteer to head up a grass roots effort to get hockey back on the schedule.
Anyone with me?
Contact me if you're interested.
Despite the fact the Coliseum is subsidized by our tax money, I still see it as a tremendous asset to our community. Where would we have to go to see the circus, ice shows, Broadway plays, symphony concerts, and numerous exhibitions like the home shows, Craftsmen Classic, the boat show, etc.? There are not other facitilities in town that could host these events on a regular basis.
I never hear a word of complaint about the tax money we put into operating our Parks & Recreation facilities ($17 million+ this fiscal year)or our libraries ($7 million+) or the Natural Science Center ($800,000/year). Yet the coliseum is in the same category as providing arts, cultural, and enrichment opportunities for citzens.
An economic study conducted by UNCG Professor Stephen Layson in June, 1998 identified $48,037,261 in income that the coliseum generates in our community in restaurants, hotel/motels, and other jobs when patrons and convention attendees come to Greensboro for events. This money never shows up on the Coliseum's ledgers but adds plenty to the bottom lines of numerous PRIVATE businesses and citizens.
But that study from 1998 also used attendance figures at the Coliseum in 1998. Since then the number of events and attendance at all of those events has dropped considerably. Lets see what the financial impact is to the community now, not in 1998.
I too would love to have newer figures, but this is the most recent study that I've seen. Even with the drop-off in attendance because of lack of hockey and concerts, I'd still be willing to bet that the Coliseum continues to attract a hefty sums into our local economy.
I say this because the bookings for trade events, conventions, and consumer shows has held steady - see my post of April 8 at
http://sandycarmany.blogspot.com/2005/04/upcoming-coliseum-events.html
A lot of the attendees to these shows/convnentions are from out-of-town and spend their dollars in our hotels and restaurants. Hockey and concert attendance is more likely to be by local folks who would not necessarily use the hotels and restaurants because of those events.
Correction. I stated "Mike Brown" in an earlier post. I believe that should say "Matt Brown" as he is the Coliseum Administrator. Next time I'll try to get my names straight.
"Despite the fact the Coliseum is subsidized by our tax money, I still see it as a tremendous asset to our community. Where would we have to go to see the circus, ice shows, Broadway plays, symphony concerts, and numerous exhibitions like the home shows, Craftsmen Classic, the boat show, etc.? There are not other facitilities in town that could host these events on a regular basis."
"Yet the coliseum is in the same category as providing arts, cultural, and enrichment opportunities for citzens".
Agree on the Broadway Plays and Symphony falling into the arts catagory, but fail to see how a home show, Craftsman Classic, and boat shows could fall into any one of them.
Maybe enrichment but who are they enriching? The vendors and the people that show there not the average taxpayer.
"A lot of the attendees to these shows/convnentions are from out-of-town and spend their dollars in our hotels and restaurants. Hockey and concert attendance is more likely to be by local folks who would not necessarily use the hotels and restaurants because of those events".
You said it--'OUT-OF-TOWN'.
No more Hockey and all the "good" concerts by-passing Greensboro,
why not let the hotels and restaurants, (that get all the economic impact), pay for the coliseum deficits and leave the taxpayers out of it........
or at least get rid of Matt Brown so we could have a much better chance of Hockey returning to Greensboro if I'm going to keep footing the bills to all the shows that I DO NOT care to attend.
(Mrs.Carmany's quotes in quotation marks. Don't know how to do the HTML thingy).
They do pay for part of it through the hotel-motel tax, but those companies who benefit from the Coliseum do need to step up and pay more of the bill.
As much as I don't care for Matt Brown and want to see him gone, the hockey team leaving wasn't ALL his fault. The folks there not showing up in numbers strong enough to at least keep the team at break even had a large part in that. 5000 or 6000 a night would have kept hockey there whether Mstt Brown liked it or not! I do agree that hockey would have a mich better chance of returning to Greensboro without Matt Brown involved.
If there were people who stayed away from the Coliseum simply to spite Matt Brown, they did so at their own peril, and he in the end got what I believe with all of my heart what he truly wanted (to be rid of hockey).
The supporters of Matt Brown can say all day "he knows he needs hockey (or another anchor tenant)". This is probably true, but he will only do so kicking and screaming, so to speak.
However, the president of the United Hockey League didn't call him and the others involved in those negotiations "onerous" for nothing.
There were two factors that caused the demise of hockey in Greensboro and neither had anything to do with Matt Brown. The first was the lack of support among the "fan" base. Quite simply, they were conspicuous by their absence. If you can't fill the seats, you can't pay the bills.
The second was the inept ownership. Their reponse to sagging attendance was to raise prices. That caused (surprise!) fans to stay away from the Coliseum. That, coupled with the unresolved lawsuit with the former coach, Jeff Brubaker, made the franchise particularly unattractive. Their response was predictable -- they simply bailed out and left a $200,000 bill owed to the city. They couldn't (or more likely wouldn't) raise the money to keep the franchise going. Put simply, Bill Black and Don Brady are responsible for a good deal of the demise of hockey in Greensboro.
In reality, hockey should have ended a year sooner in Greensboro. The Coliseum and the City were under no obligation to operate the franchise for the last year while they looked for another group of owners to operate the team. A good deal of the reason they couldn't find an ownership group was the complications of the "Brubaker" affair made it impossible to find a group willing to take on the potential financial obligation of that lawsuit.
As a sidelight, facilities like the Coliseum are in a much more highly competitive market than ten years ago. Ten years ago, when you wanted to book a date for a concert or event in central North Carolina, the Greensboro Coliseum was the only significant venue. Now, you have the RBC Center and Walnut Creek Amphitheater and other lesser venues in the area.That, coupled with the fact that fewer "big name" groups are touring on a regular basis these days, makes competition for the entertainment dollar extremely tight.
The key to financial success at the coliseum is "bodies in the buildingS" paying for parking and buying concessions and souvenirs. Coliseum staff are being creative and doing all they can to book a wide variety of events in all 5 venues - the arena, Special Events Center, the Pavillion, War Memorial Auditorium, and the Odeon Theater.
The Generals ownership was not very brilliant, but Matt Brown took advantage of that fact and ultimately assured their demise while looking like a knight on a white horse to the media and the City Council.
He knew that if this effort failed, there would be no hockey in the Coliseum for the foreseeable future, which I still believe is what he wanted all along.
He is a schemer, but he's no dummy. The fact that he "went to bat" for the hockey team for '03-'04 was only to make himself look good, and was not an attempt to save hockey in Greensboro.
He won either way. If it had worked out, he would have gone on the TV folks and said "look how great I am". The way it turned out, he still came out smelling like a rose by saying basically that not even the great Matt Brown could save the team.
He could have very easily gone to the ECHL and dump the Generals franchise and their legal/financial baggage, and gotten a new or relocated ECHL franchise (there are several available) with new owners (there were several potential offers that were turned down flat), but he chose not to.
Guys! Your bickering does not make sense. How does Matt Brown not want hockey in Greensboro, yet he clearly stated to Councilwomen Carmany the coliseum lost money without the Generals this past year. Brown is not the problem. It is the minor league attitude of this boring city that keeps hockey away.
The Coliseum has lost money since long long ago. There are those who say that the Coliseum is an "entitlememt" because of the cultural events that it hosts.
I couldn't disagree more. There are facilities similar to the Coliseum that do make money. 2 prime examples are the Bi-Lo Center in Greenville, SC and the new Gwinnett Center near Atlanta.
As for Matt Brown, he is what he is. The city council loves this guy even though he has lost millions of dollars with no accountability and that he has been known to be very brusk with employees and patrons alike, instead of being grateful to the people who saved the building from literally falling down around him in 1992.
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