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GM exits name deal with arena



Published: Sat, October 4, 2008 @ 12:00 a.m.

By David Skolnick

The city is going to receive less money for naming rights.

YOUNGSTOWN — Because of declining revenue and a struggling economy, General Motors will no longer pay a naming rights fee to the city for the Chevrolet Centre.

But it’s likely that a deal with local Chevrolet dealers will be signed by late next week that will keep the name and the Chevy bow tie at the facility, said Eric Ryan, the center’s executive director.

GM’s three-year contract for the center’s naming rights, which included 17 annual renewal options, expired Tuesday.

The company is scaling back its sponsorships of sporting events and at entertainment facilities strictly because of the struggling economy and its own business conditions, a spokesman said. That led to the company’s decision to no longer pay the naming rights fee for the Chevrolet Centre.

The center is close to getting a one-year deal done with local Chevrolet dealers, Ryan said.

GM paid $175,000 in cash annually and provided four GM vehicles a year to the city, including one driven by Mayor Jay Williams, in exchange for the naming rights.

“We don’t expect to receive that same amount,” Williams said. “It would be unrealistic to expect the amount from the local dealers to be the same as the company.”

GM’s financial struggles were responsible for the company’s decision to not renew its contract, Williams said.

“The center has faced numerous challenges and this is one of those challenges,” he said.

Williams and Ryan said they were disappointed with GM’s decision, but nothing could be done to change the company’s decision at this point. There is a possibility that GM could reconsider its decision in the future, Williams said.

This is the latest setback at the city-owned facility that’s been open since late October 2005.

The facility failed to meet financial projections set by Global Entertainment Corp., a Phoenix-based company that operated the center for its first two years. The center failed to turn a profit in those two years.

It also continues to struggle to fill dates during the summer months.

The center’s financial statement — the center’s fiscal year begins in October and ends in September — is expected to be released as early as next week. The center had a $110,669 profit during the first nine months of this last fiscal year.

“It’s going to be close,” Ryan said of finishing the fiscal year with a profit.

Without the center’s having to take less money for naming rights — assuming the deal gets done — it’s going to adversely impact the financially struggling facility’s bottom line.

The center also lost its major tenant, the Youngstown SteelHounds minor league hockey team, this season. The team was kicked out of the Central Hockey League on June 2 over a financial dispute.

The Mahoning Valley Phantoms junior hockey team is taking the Hounds’ place this year as the center’s main tenant.

The team’s first home game at the center is Oct. 24.

Single game tickets go on sale Wednesday at the center’s box office as well as at TicketMaster locations and online. Season tickets for the Phantoms are only available at the Ice Zone in Boardman beginning Wednesday.

Because luxury suite customers paid for professional — and not junior — hockey, the facility provided a rebate of about $8,500 for each suite-holder, Ryan said.

Luxury suite customers had to pay a $20-a-game fee for each ticket to each SteelHounds game in addition to the suite cost, which ranges from $30,000 to $40,000 annually depending on size and location, Ryan said. Most of that ticket money went to the SteelHounds.

The center won’t charge its suite-holders a ticket fee for Phantom games, and the team won’t receive any financial benefit from the facility for those tickets, Ryan said.

Ryan said he’s received positive feedback from the center’s suite-holders about what’s happening at the center. The facility recently sold one of its suites and prominent local businessman Bruce Zoldan, who owns the Phantoms, is to finalize a deal for a suite on Monday, Ryan said.

That means 20 of the center’s 24 suites are sold. The center regularly rents the other four suites for events there, Ryan said.

The facility is seeing a decline in sponsorship, but ticket sales are doing well, Ryan said.

“With the economy, we’re definitely feeling the pinch with sponsors, but ticket sales aren’t slumping,” he said. “Obviously, we’re concerned [with sponsorships]. We have to watch every penny. It’s the first thing big spenders cut.”


Comments

1localobserver(13 comments)posted 5 years, 11 months ago

The city should seriously consider selling this facility to a private firm. There's no logical, economic benefit to a government being in the hockey arena business.

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2TheLostPatrol(756 comments)posted 5 years, 11 months ago

Amen localobserver. Maybe George McKelvey would like to tap into his Government Pension and "Communion" money and purchase it on his own and become a legitimate Entrepreneur. The money on the Centre should have been spent on a beautification project for all major arteries leading into the City of Youngstown.

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