New deal gives Covelli Centre a ticket to added revenue
By David Skolnick
The board of control approved a contract extension for Ticketmaster to handle ticketing for events at the city-owned Covelli Centre.
The new five-plus-year deal increases the city’s percentage of ticket surcharge fees, also called convenience fees, from a previous range of 25 percent to 40 percent, depending on the cost of the tickets, to a flat-rate of 49 percent. The surcharge fees range from $3.35 to $8.85 a ticket.
That increased percentage, which went into effect after the board’s Thursday vote, means the center will receive about $40,000 to $50,000 more a year in surcharge fees, said Eric Ryan, the facility’s executive director who negotiated the contract extension.
“It’s been a great partnership with Ticketmaster,” Ryan said. “We’re happy with them, and they wanted to retain our business so we successfully negotiated a better contract.”
The city signed a five-year contract with Ticketmaster that took effect May 1, 2008. The new contract started Thursday and runs through April 30, 2018.
Ticketmaster paid $137,747 in 2011 in ticketing fees to the center. Ticketmaster paid the center 25 percent for events with the face value of a ticket of under $15 to 40 percent for tickets costing at least $45 each. On average, the center was getting 32 percent of the surcharge fees.
Under the new deal, the center would have received about $40,000 more in fees last year, Ryan said.
“It’s another step toward profitability,” he said.
This could be the first year since the center opened in October 2005 that the city could realize a profit from the facility.
The arena had a $251,267 operating surplus as of Sept. 30. Ryan expects the center to finish the year with an operating surplus of about $300,000.
Ryan also said he expects about $175,000 this year in admission tax revenue.
Through the first nine months of the year, the city brought in $120,458 from a 5.5 percent admission tax on tickets sold at the arena.
Also, the city recently received $175,000 from Covelli Enterprises for the center’s naming rights for a year. That’s up from $120,000 it was getting from Covelli during the three previous years.
The city has paid between $579,925 and $773,500 a year in interest payments on the $11.9 million loan it borrowed in 2005 as its share of the $45 million center.
But Youngstown will pay only $113,250 this year in interest as well as $300,000 toward the principal.
The city also is having an operational assessment done on the center to help it determine if it wants to look at leasing or selling the facility. It should be done in about a month, said Mayor Charles Sammarone.
Leasing is a strong possibility, but selling could be an issue, Sammarone said, because the center could lose its tax-exempt status if purchased by a for-profit company.
The Ticketmaster extension is good for the city, the mayor said.