My blog produced a raft of emails indicating that I wasn’t very clear in my recitation of arena numbers. Here’s an attempt to clarify:
We will not know about parking revenues until January 31, 2014 because that number is due quarterly per the arena management agreement and will reflect October-November-December (4th quarter of Fiscal Year 2013-14) parking surcharges.
However, there is a line item on these monthly reports that troubles me. In none of the monthly reports does it indicate that IceArizona is depositing Supplemental Ticket surcharge revenue ($1.50 per ticket) into an escrow account. It is an escrow account designed to supplement revenues to the city (If needed) to try to make the city whole for $9 million dollars. You see, this Fiscal Year 2013-14, the city council budgeted $6 million for arena management (keep in mind nothing is budgeted for FY 2014-15 because the budget has not been set or approved by council and will not be until June 2014). Since the city only budgeted $6 million dollars of the $15 million dollars needed to pay IceArizona the arena management fee, the idea behind the surcharges and fees was to earn an additional $9 million dollars for the city. That would hopefully make the city whole for the $15 million dollars a year to IceArizona. If the $9 million wasn’t generated the Supplemental Ticket surcharge of $1.50 per ticket was to be given to the city to cover the short fall. Here is the exact verbage:
Supplemental Surcharge
“9.1.3 Supplemental Surcharge. In addition, throughout the Term, a Supplemental Surcharge of $1.50 per Qualified Ticket (“Supplemental Surcharge”) shall be imposed by the Arena Manager for all Hockey and non-Hockey Events. The Supplemental Surcharge shall be deposited by Arena Manager into one or more an escrow accounts in the name of Arena Manager and the City, and shall be the property of each Party to the extent each is entitled to such monies under this Agreement as determined by Arena Manager and the City jointly (the Supplemental Surcharge Escrow Account”): provided that such deposits shall be held in accordance with and subject to audit pursuant to the procedures described on Exhibit “N” attached hereto (the “Supplemental Surcharge Procedures”). City shall have the right to draw upon the Supplemental Escrow Account within 60 days following the last day of each Fiscal Year, to the extent City received less than $9,000,000 in total revenue from operations at the Arena pursuant to this Agreement during the immediately preceding Fiscal Year (the “Deficit Amount”), as further described in the Supplemental Surcharge Procedures and in an amount not to exceed the total funds available in the Supplemental Surcharge Escrow Account at the end of such Fiscal Year. The funds remaining in the Supplemental Surcharge Escrow Account following payment of the Deficit Amount, if any, to City shall belong to Arena Manager free and clear of all claims of City and shall be disbursed to Arena Manager such that said escrow account is reset to a zero balance following the reconciliation pursuant to the Supplemental Surcharge Procedures at the beginning of each Fiscal Year. The Supplemental Surcharge amounts imposed by the Arena Manager which are the property of Arena Manager pursuant to this Section 9.1.3 are pledged to the City, as more fully described in the Supplemental Surcharge Procedures, to the extent of the City’s interest, with the City claiming no interest in the balance of such account. The Supplemental Surcharge Escrow Account shall be held in one or more (FDIC insured) accounts of the Arena Manager and the City jointly, at one or more Third Party financial institutions agreed to by the City and the Arena Manager. To the extent of any inconsistency between this Section 9.1.3 and the terms of the Supplemental Surcharge Procedures, the terms of this Section 9.1.3 shall control.”
Where are the Supplemental Ticket Surcharge numbers per month? There should be $8,206 for October; $101,644 for November; and $96,758 for December for a total of $206, 608 to date. So, where’s the money? Why no accounting in the monthly report? Why is there no indication that these funds have been deposited in an interest bearing escrow account? Could this be considered a breach of contract?
According to the Monthly Arena Revenues & Expenditures, Arena Lease and Safety & Security Agreements, a public document that will be used by staff in its presentation at the December 17, 2013 city council workshop on this issue, here are the monthly ticket surcharge revenues that are to be paid to the city. These are public figures provided by the city based on figures provided by IceArizona. Here is the link: http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/121713-W05.pdf .
Month ending Sept 30, 2013:
Ticket surcharge Hockey ($3 per ticket) $16,413 total revenue surcharge for 1 hockey game.
Divide $16,413 by $3 and attendance for this one game was 5,471.
Month ending October 31, 2013:
Ticket surcharge Hockey ($3 per ticket) $203,289 total revenue surcharge for 7 hockey games.
Divide $203,289 by $3 and attendance total for all 7 games was 67,756.
Divide 67,756 by 7 games and average attendance per game was 9,679.
Month ending November 30, 2013:
Ticket surcharge Hockey ($3 per ticket) $193,517 total revenue surcharge for 5 hockey games.
Divide $193,517 by $3 and attendance total for all 5 games was 64,505.
Divide 64,505 by 5 games and average attendance per game was 12,901.
Oops. I just checked the Coyotes website and it lists SIX games in November. Whose mistake is it? If it’s the city’s incompetence perhaps City Manager Fischer should fire someone else in the Finance Department. If it’s IceArizona’s mistake was it deliberate?
We’ve all heard the rumors about Anthony LeBlanc handing out 2,000 complementary tickets per game. Whether it’s true or not has no bearing on ticket revenues because they would be free tickets there would be no ticket surcharge. You attendance gurus out there better check your attendance figures because these are the numbers that come from IceArizona. After all, IceArizona wouldn’t low ball the numbers to the city only to exaggerate them for the media, would they? Nah-h-h-h-h.
By the way I ran into Mr. LeBlanc at a Coyotes game and had a few minute to quiz him on the numbers of the Coyotes deal. Mr. LeBlanc quite clearly stated to me that they needed attendance of 15,500 per game to “make it.” His number, not mine.
© Joyce Clark, 2013
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More Confusion: In the portion of the contract that you quoted above it states: “9.1.3 Supplemental Surcharge. In addition, throughout the Term, a Supplemental Surcharge of $1.50 per Qualified Ticket” Yet in the Council information package that you also shared above they show $3.00 surcharge per ticket. Which is the correct value?
Bob,
There are two ticket surcharges. The first is the $3.00 per ticket and has been in existence since the arena was opened.
The second ticket surcharge of $1.50 per ticket is a new one between the city and IceArizona. IceArizona offered it because of all of the discussion that city had budgeted $6M yet it was paying them $15M. It is designed to be used ONLY if the enhanced revenue stream does not total $9M. So, the upshot is that there are two ticket surcharges.
Thanks, Joyce. I did not remember the original $3 surcharge.
Since becoming a season ticket holder of this team I have followed every rumour and kick to the head that this team has received while they were down.
I never have heard of this 2000 comp ticket that you mention.
Leblanc specifically said on the NHL station to EJ Hradek and Steve Mears that the number was far below that..I believe he said under 1000.
I now am a believer in what hockey writers like Ken Campbell (huge Coyote hater) say about publically funded sports teams.
Not because tax payers shouldn’t want professional sports teams here or shouldn’t want to fund the arts etc…for that is what sperates us from Podunk Indiana.
Poduck Indiana has light festivals and Melon festivals and do them MUCH better than Glendale does.
They have 4-H fairs where people can stand around and watch farm animals defecate in the middle of a ring and public libraries and parks (the parks in the small towns back in the midwest FAR surpass these street corner parks in the Phoenix areas.).
People should want to stand apart from Podunk and I am certainly glad that this current administration decided to keep this team.
I don’t believe in publically funded teams anymore because it is OBVIOUS thatthe only reason this or any sports venue is sought after is purely MONEY.,
Did any sports/hockey genius on the council do a study before the Coyotes came here to determine the viability of keeping a team here?
Did any councilmember ever follow the sport or know that attendance was THE MOST important statistic in hockey? (not so in other sports)
Was any cultural analysis done in a business sense at all?
Could any council member at the time or current do 10 pushups or run a mile?
How many people on the council were/are even interested in sports for reasons other than money?
I think the plan these new guys have is to leave anyway…
Who would WANT to stay around when they are trying to establish a fan base and Rhinehardt comes out w/ her timely article, then we get little punches in the gut like the 2000 comp tickets thing?
The attendance looks good the last 2 games of December and most of the games (already) in January except Calgary on Jan 7th and Buffalo on the 30th.
I now agree w/ Ken Jones AND Ken Campbell about the public funding of sports teams.
i will however ALWAYS buy a season ticket to my favorite team the Coyotes and a LOT G parking pass to do my part to thank Glendale.
I’m even possibly going to get an 8 month apartment atthePillars next year to be closer..maybe.
if they are here.
But, if I were Gosbee and Leblanc and taking all these punches as I’m laying there trying to get up….I’d go. Forget 5 years. No offense.
I didn’t dream up the number of comps. I am sorry if the number upsets you but it is a number that I have heard about for months. As I said I don’t even know if it is true or not. I accept LeBlanc’s and Gosbee’s pledge that they are here to stay. The dollars from the ticket surcharge used in the Glendale monthly arena reports come from IceArizona. It’s simply a matter of dividing to arrive at the attendance figures.