Record losses hit Chevy Centre
The city has determined that it will save $41,000 each month in fees to Global Entertainment.
By ANGIE SCHMITT
VINDICATOR STAFF WRITER
YOUNGSTOWN —The Chevrolet Centre marked the final quarter of its second fiscal year with record losses, bringing the annual deficit for the publicly owned arena to more than $250,000.
City officials attribute $220,938 in losses for the months of July, August and September to disappointing turnout at three major concerts.
Ticket sales at the Kenny Loggins, “Weird Al” Yankovic and Great White shows did not generate enough revenue to cover booking fees paid to the entertainers, said Kyle Miasek, the city’s deputy finance director.
Among the more profitable shows for the quarter were World Wrestling Entertainment, Stevie Nicks and Tool, Miasek said.
Miasek blamed the arena’s former management company, Global Entertainment Corp., for booking and negotiating unprofitable agreements with the revenue-losing acts. The city dissolved its contract with the Phoenix-based management company last month.
“Kenny Loggins had played twice in the last two years in the area,” Miasek said. “Global did not do a good job researching that. They paid him a lot of money and ticket sales just didn’t materialize.”
City officials are conducting a nationwide search for new management, Miasek said. Struthers resident Eric Ryan, a concert promoter, is serving as director of the center in the interim.
Miasek said city officials are hopeful that the company selected to manage the facility will be able to rally enough revenue to offset $254,388 in operating losses accrued this fiscal year. Global absorbed the $23,000 deficit from the center’s first year, he said.
“We believe, right now, we can make a sizable dent in the [negative balance] by not paying out management fees,” Miasek said. “Global was pulling a lot of money out of the building for itself.”
The city has determined that it will save $41,500 per month in parking, management and commission fees paid to Global during the interim, Miasek said.
Under the center’s former management, however, the city was guaranteed $600,000 annually toward debt service payments on the facility, regardless of profits or losses. Debt service on the $45 million facility costs the city $755,650 each year. The city contributed $11.9 million to the cost of construction.
Strong returns are expected in October, November and December, Miasek said. The quarter has traditionally been the most profitable for the facility, with holiday shows and the start of the hockey season serving as reliable sources of revenue, he said.
“We chose this time strategically to get out of the deal because it gives us a buffer,” he said. “The first quarter has always been profitable for the arena.”
Meanwhile, the city is hosting a conference Monday that will allow potential management companies to tour the facility. The deadline for submissions will be Nov. 30, he said.