The same day JAC Management Group received a five-year contract extension to run the city-owned Covelli Centre, the company agreed to have the Youngstown Phantoms play its home games at the facility for another year.
The agreement came late Thursday in a meeting with Eric Ryan, the head of JAC and the center’s executive director, and Bruce Zoldan, owner of the junior-league hockey team. Earlier Thursday, the city’s board of control approved a five-year extension, beginning Jan. 1, 2014, with JAC to continue managing the facility.
The Phantoms have played home games at the center for the past four seasons. The team made the playoffs this past season, but it has been among the bottom three teams in attendance in the United States Hockey League.
As part of its contract, the Phantoms must pay a $750 penalty for every game with attendance below 1,500. The team averaged 1,219 a game with 24 of its 32 games drawing fewer than 1,500 fans.
The Phantoms paid $18,000 this past season to the center in penalties. The team paid $12,000 in the 2009-10 season in penalty fees, and $15,750 in each of the two following seasons.
Without the $18,000 penalty, the center would have lost $7,121.91 on the team in the 2012-13 season. With the penalty, the center made $10,878.09 last season, or $339.94 a game.
The Phantoms signed a five-year deal in 2009, but the city had the option of eliminating the fifth year if the team didn’t average 2,000 people a game per season.
Also in the contract was an option for the team to pay $75,000 to guarantee a fifth season, something Zoldan, who’s said he’s lost more than $1 million running the Phantoms, wasn’t willing to do.
The contract included language that didn’t require the center to ask the Phantoms to pay any money for a fifth season, which is what Ryan and Zoldan agreed upon Thursday.
“We’re going to work very hard to increase the fan base and our season ticket holders,” Zoldan said. “Our goal is to have 2,000 or more fans on average per game.”
A big push by the Phantoms a few months ago to sell season tickets for the 2013-14 season failed.
To date, the team has sold only 130 season tickets, Zoldan said.
“It’s nowhere near where we want to be,” he said.
But he added at this time last season, the team sold 40 season tickets. The team had about 350 season ticket holders last year.
As for a new contract for the Phantoms, Ryan said he will evaluate how the fifth season progresses in terms of ticket sales and other financial issues before making a decision.
Zoldan said he wants to work out a long-term extension with the city in the middle of the season.
“A very successful season would help” that effort, he said.
Though the team did poorly at the gate, it finished last season one game shy of reaching the USHL’s Clark Cup Finals.
Zoldan said he met last week with officials from the Pittsburgh Penguins to discuss the growth of youth hockey, some joint-marketing plans and ways to increase the Phantoms’ fan base. Among the possibilities are the Phantoms playing a game before a Penguins game at Pittsburgh’s Consol Energy Center, he said.
Keeping the Phantoms for the fifth season helps the center by filling 30 days there, Ryan said.
“It’s already June and we’ve worked on our schedule for fall and winter, and a majority of the hockey games wouldn’t have been replaced with events,” he said.
The Phantoms start next season in October.
Also, with the uncertain future of the Ice Zone, an indoor ice rink in Boardman owned by Zoldan, there are opportunities for the Covelli Centre to increase the use of its ice for some of the Ice Zone’s hockey teams and figure skaters, Ryan said.
“We’re working with those groups to accommodate some of their needs, and have talked with Bruce to discuss any synergies that may be feasible if the Ice Zone were to stay open,” he said. “This may add significant revenue to the arena’s bottom line.”
Meanwhile, JAC will meet shortly with Covelli Enterprises to negotiate an extension to the company’s naming rights at the facility.
Covelli paid $175,000 for the naming rights for a 12-month period that ended May 1.
Ryan said he will also meet soon with SMG, the center’s national consultant, to discuss a new contract with the company. SMG’s deal expires at the end of the year.
City officials want to significantly reduce SMG’s contract that pays the company $86,000 annually and a percentage of the center’s operating service that gave it close to $40,000 last year in bonuses.
City council approved the deal Wednesday.
JAC will be paid $99,200 in an annual management fee.
The company also will see an increase in its bonus for all operating surplus exceeding $100,000.
The current rate is 10 percent. It will increase to 12 percent in 2014, 14 percent in 2015 and to 15 percent annually in the final three years of the contract.
The center had a record operating surplus last year of $320,787, and Ryan said the facility should have an operating surplus of at least $300,000 this year.
Also, the city will add a 25-cent fee on every ticket sold, beginning next year, to create a fund for capital improvements to the center.
The center, which opened in October 2005, has never had money for capital improvements.