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“Broward County is ready to enter the big leagues.” – Sun Sentinel, Feb. 1, 1996

The BB&T Center = The Big Leagues. “Broward County is ready to enter the big leagues.” – Sun Sentinel, Feb. 1, 1996. The BB&T Center = Publically-owned. “…Let’s all remember: the BB&T Center is publicly owned, so taxpayers need it to succeed.” – Sun Sentinel, Feb. 16, 2014.

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“Broward County is ready to enter the big leagues.” – Sun Sentinel, Feb. 1, 1996

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  1. The BB&T Center = The Big Leagues “Broward County is ready to enter the big leagues.” – Sun Sentinel, Feb. 1, 1996

  2. The BB&T Center = Publically-owned “…Let’s all remember: the BB&T Center is publicly owned, so taxpayers need it to succeed.” – Sun Sentinel, Feb. 16, 2014

  3. A True Partner To Broward County The BB&T Center is a true partner to Broward County providing significant benefits to residents, the CVB, local hotels, local businesses etc.: - Annual $500k marketing commitment to CVB - Significant domestic/International media value - Tourism and heads-in-beds generator through world-renowned concerts, offseason events, Panthers hockey, etc. - Source of significant economic impact, job creation, local business support, etc. - Charity giving: Cats Foundation gives $1M in kind annually - Civic pride: Arena and Panthers hockey are part of County’s identity; Only major sports/entertainment organization in Broward

  4. Major Upcoming BB&T Center Events The BB&T Center has a long list of major upcoming events including the following: - Jehovah’s Witness Convention ‘14, potentially ‘15 and ’16 - NHL Entry Draft ’15 - Orange Bowl Basketball Classic through ‘17 - Crush Games CrossFit Games in August ’14 - Justin Timberlake in March ’14 - Paul Simon & Sting in March ‘14 - Bruce Springsteen in April ‘14 - Lady Gaga in May ’14 - Cher in May ’14 - Katy Perry in July ‘14

  5. The Arena Needs Assistance The Arena/SSE is losing approximately $30M annually and has had five different owners/operators in the last 15 years. SSE has done the following to trim those losses: - Cut $5M in administrative expenses - Refinanced the organization’s debt at a lower interest rate - Brought the Arena’s vendor services in-house - Invested in the on-ice product The last bucket that is needed is assistance from our partners at Broward County.

  6. Changing Conditions The Operating Agreement between SSE/AOC and Broward County is nearly 18 years old and the conditions for operating a major professional entertainment and sports facility including: - Significant increase in expenses i.e. insurance - Increased competition in the South Florida marketplace - Agreement is not competitive with comparable arena agreements in North America

  7. South Florida Competition In 1998 In 1998 the BB&T Center had only six other venues to compete with and the financial risk of hosting concerts and events was on the promoters and artists.

  8. South Florida Competition In 2014 Today, there are 19 venues competing for events and the financial risk is solely on the venue.

  9. BB&T Center Lease Analysis February 2014

  10. Tipping Point Sports, LLC Background • Founded by Mitchell Ziets in 2011 • 25 years in sports finance; background in corporate and muni finance • TPS focuses on stadium advisory, M&A, team and venue financings, valuations • Over $7B of transaction volume • Advised on 45 stadium and arenas including Camden Yards, Petco Park, Lincoln Financial Field, Dodgers Stadium, Consol Energy Center, Paul Brown Stadium • Lease negotiations • Public financing • Private financing • Advised on 40 franchise acquisitions/LP investments including Nationals, Padres, Sonics, Cavaliers, Dodgers, Ducks, Steelers, Red Sox

  11. Stadium and Arena Building Boom 113 new stadiums and arenas opened since 1998 BB&T Center Lease Opening

  12. Comparable NHL Arenas

  13. Market Demographics South Florida market is: • #5 (out of 11) in terms of TV households • #9 when we consider number of franchises in each market

  14. Arena Lease Restructurings • Nationwide Arena (Columbus Blue Jackets) • Over $15M in annual savings • Highlights - Team no longer pays operating costs, rent, capex and property tax and receives naming rights revenues from Nationwide; Nationwide invested in Team • Jobing.com Arena (Phoenix Coyotes) • Over $15M in annual savings • Highlights - Team receives $15M subsidy from the City of Glendale; early termination provision based on losses • Bridgestone Arena (Nashville Predators) • $9.5M in annual savings • Highlights – Team receives mngt fee plus a subsidy to fund arena operating losses and revenue sharing with Metro Govt is reduced; early termination provision based on losses • First Niagara Center (Buffalo Sabres) • Over $2M in annual savings on top of the elimination of a substantial Team construction investment • Highlights - Operating fees and surcharges were eliminated • Tampa Bay Times Forum (Tampa Bay Lightning) • Over $2M in annual saving • Highlights - Capex, property taxes and surcharges were eliminated

  15. BB&T Center Investment Source: Arena Operating Company

  16. Arena Occupancy Costs Occupancy Costs include the following, averaged over 30 years: Construction investment (depreciated over 10 years) Capex (standardized at $2M, adjusted for each lease) Rent (based on each lease) Revenue splits with the public sector and surcharges (standardized economics, adjusted for each lease) Annual and event operating costs, net of other event profit (standardized at $4M, adjusted for each lease) Insurance costs (BB&T Center’s insurance cost is $1.5M higher than that of the Comps Group, as is that of the Tampa Bay Times Forum)

  17. Arena Lease Comps – Occupancy Cost BB&T Center’s annual occupancy cost of $14.6M ranks 2nd out of the 11 arenas in the Comps Group and is $5.5M more than the average of $9.1M for the other 10 arenas. average Source: Tipping Point Sports research

  18. Arena Lease Comps – Investment Percentage BB&T Center’s Arena and Operating Investment Percentage of 75% ranks 2nd out of 11 arenas and compares to 45% for the other arenas in the Comps Group. average Source: Tipping Point Sports research

  19. Live Nation “If the Florida Panthers were no longer the primary tenant of the venue and the BB&T Center operated without a full time, major sports franchise tenant, the partnership between Live Nation and the BB&T Center would cease and the number of events that visited the venue on a regular basis would dwindle significantly.” - Michael Evans, President of Live Nation Arenas

  20. Global Spectrum • Global Spectrum manages 123 venues worldwide • Comcast-Spectacor • Global Spectrum’s Immediate Parent Company • Philadelphia-based sports and entertainment company • Global Spectrum • Wells Fargo Center • Philadelphia Flyers (NHL) • Flyers Skate Zone • 3601 Creative Group • Comcast SportsNet • Paciolan • Ovations Food Services • Front Row Marketing Services • New Era Tickets • Comcast • Global Spectrum’s Ultimate Parent Company • Global media and technology company • Comcast Cable is the nation's largest video, high-speed Internet and phone provider to residential customers under the XFINITY brand and also provides these services to businesses. • NBCUniversaloperates 30 news, entertainment, and sports cable networks, the NBC and Telemundo broadcast networks, television production operations, television station groups, Universal Pictures and Universal Parks and Resorts

  21. BB&T Center Financial Position • Financial success of the BB&T Center hinges upon the Panthers • Revenues driven in 3 major categories • Hockey – 23% of total revenues • Non-Hickey – 33% of total revenues • Suites, Sponsorships, Other – 44% of total revenues • Relocation of Panthers will have a dramatic negative effect on overall revenues • So much so that any expense savings cannot overcome the lost revenues • Will result in dramatic swing to an Operating Loss of ($3.9M)

  22. What Does Losing a Tenant Mean? • Losing a major league tenant in a highly competitive market will be devastating financially and non-financially • Loss of 41+, consistent dates, associated attendance, and revenues • Devastating loss of other events, particularly concerts • “Bread and butter” events for any arena • Key to financial success through revenues and increases ability maximize premium seating, advertising and sponsorships • Lost attendance and media exposure resulting in negotiation or termination of major revenue-generating agreements • Ticketing, food service, naming rights, other major sponsorships, and premium seating. • Complete loss of leverage to negotiate favorable deals with promoters • Loss of economic impact from taxes • Loss of full-time and part-time jobs in Broward County • Negative impact on the quality of life in Broward County • Decreased local, regional and national exposure for Broward County tourism

  23. “Here Comes Broward County!”The Economic Impacts ofThe BB&T ArenaFebruary 18, 2014 Hank Fishkind Ph.D., President Fishkind & Associates, Inc. 12051 Corporate Boulevard Orlando, Florida 32817

  24. Measuring Benefits • Impacts measured by new money brought into the local community • 40% of attendees from outside Broward County • Visiting Teams • Arena Spending and Operations • Concessions, Food Service, Parking • Players and employee salaries spent locally • Other locally spent arena operations & maint. • Includes NHL games, non-sports concerts and events Fishkind & Associates, Inc.

  25. Direct SpendingLocal Infusion of Money Source: SS&E,LLLP Organizational Spending, Audited Consolidated Statement of Operations as of June 30, 2012; BDO June 14, 2013. All else: Fishkind & Associates, Inc. Fishkind & Associates, Inc.

  26. Direct Jobs Supported Fishkind & Associates, Inc.

  27. Annual Economic ImpactBB&T Arena Fishkind & Associates, Inc.

  28. Summary of Economic Impacts Total Jobs supported – 1,549 Annual Economic Impact - $102,400,000 $1.4 billion since 1998-99 season at BB&T Cultural and Sports Venue – BB&T amenity Community Involvement, Leagues, Instruction at Spectacular Ice Hockey Season coincides with Tourist Season – away game media broadcasts reinforce tourism brand awareness “HERE COMES BROWARD COUNTY!” Fishkind & Associates, Inc.

  29. Brian Johnson, Exec. Dir., Minority Builders Coalition The BB&T Center’s exclusive Club RED was built with a $7.7M loan from Broward County and included significant participation from the County Minority Builders Coalition

  30. Tourist Development Tax FUNDS RAISED BY THE 2 PERCENT TAX MAY ONLY BE LEGALLY SPENT FOR THE SPECIFIC PURPOSES AUTHORIZED IN AN ORDINANCE PASSED BY THE COUNTY COMMISSION

  31. STATED USE OF 2 PERCENT TAX REVENUE IN ORDINANCES [T]o assist in the payment of the debt service on bonds issued to finance the construction, reconstruction, or renovation of a professional sports franchise facility. Section 1(3) of Ordinance No. 96-9 and Section 1(4) of Ordinance No. 96-10 (Emphasis added). The word “facility” is omitted from Ordinance No. 96-10.

  32. PUBLISHED TITLE OF ORDINANCES AN ORDINANCE OF THE BOARD OF COUNTY COMMISSIONERS OF BROWARD COUNTY, FLORIDA RELATING TO TAXATION; AMENDING SECTION 31½-16, “TOURIST DEVELOPMENT TAX,” BY LEVYING AN ADDITIONAL ONE PERCENT LOCAL OPTION TOURIST DEVELOPMENT TAX TO ASSIST IN THE PAYMENT OF BONDS ISSUED TO FINANCE THE CONSTRUCTION OF A PROFESSIONAL SPORTS FRANCHISE FACILITY; PROVIDING FOR SEVERABILITY; PROVIDING FOR A CERTIFIED COPY TO BE SENT TO THE DEPARTMENT OF REVENUE; PROVIDING FOR INCLUSION IN CODE; PROVIDING FOR CONDITIONS PRECEDENT; AND PROVIDING FOR AN EFFECTIVE DATE. Ordinance No. 96-9 at p. 1; Ordinance No. 96-10 at p. 1. (Emphasis added). Ordinance No. 96-10 references “A NEW PROFESSIONAL SPORTS FRANCHISE AS DEFINED IN STATE LAW.” Each Ordinance imposed a 1% tax for a combined total of 2%.

  33. STATED PURPOSE OF ORDINANCES PURPOSE: To amend Section 31½-16, Broward County Code, relating to collection of the tourist development tax revenues by Broward County to authorize the levy and imposition of an additional one percent (1%) tax to assist in the payment of the debt service on bonds issued to finance the construction of a professional sports franchise facility. Ordinance No. 96-9 at p. 11; Ordinance No. 96-10 at p. 13. (Emphasis added). Each Ordinance imposed a 1% tax for a combined total of 2%.

  34. 2 PERCENT TAX REVENUE IN EXCESS OF $8 MILLION TOTAL: $103,238,777 Figures for 2014 are Estimated

  35. SSE/BB&T Center Request • To secure the future of the County-owned arena and create a sustainable business model that will drive growing economic impact, tourism and heads in beds, SSE/BB&T Center request the following: • $4.5M reduction in annual Arena debt payment • $500k annual County contribution to Arena capital improvements and maintenance • Cap of $1M in annual SSE/BB&T Center insurance obligation

  36. SSE/BB&T Center Commitments If this request is approved, we commit to the following for Broward County and this community: - Immediate payback of the $10.6M in outstanding County loans - Fund a Panthers hockey team at or near the NHL salary cap - Continue the $500k annual contribution to the CVB - Continue to book concerts, shows and events that drive tourism and heads in beds including the 2015 NHL Draft, Jehovah’s Witness Conventions (’14 and potentially ‘15 and’16), NHL All Star Game, Orange Bowl Basketball Classic, and more - Develop a parcel of land around the BB&T Center as part of a western Broward economic engine

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