by Max Marbut
Staff Writer
The City has had a contract with SMG to manage the municipally-owned sports and entertainment facilities for longer than anyone currently with the City or SMG can remember. All agree the two entities have been doing business since long before the Better Jacksonville Plan (BJP) financed the transformation of the old Gator Bowl into Municipal Stadium.
The BJP and its attendant additional sales tax also financed the renovation of the old Civic Auditorium into the Times-Union Center for the Performing Arts and replacing the Coliseum with Veterans Memorial Arena and Wolfson Park with the Baseball Grounds of Jacksonville. Add in the Osborn Center and the Equestrian Center and it’s a total of six public assembly facilities owned by the City and managed by SMG, whose current contract began Oct. 1, 2002 and expires Sept. 30, 2008.
A bill sponsored by the Jacksonville Economic Development Commission (JEDC, the City agency responsible for the facilities’ operations) was introduced at the Nov. 27 City Council meeting to exercise the renewal option in the contract to extend the agreement to March 30, 2013.
Paul Crawford, JEDC deputy executive director, said the City is satisfied with the job SMG is doing, but felt it was time to begin the legislative process to renew the contract.
The bill (2007-1265) has been sent to the Finance and Recreation & Community Development committees and a public hearing is set for Tuesday. But, considering the Council’s holiday schedule, it will be well into next next year before it is enacted or rejected.
“We wanted to get it done as soon as possible,” said Crawford. “If the Council doesn’t approve the extension, we’d have six months to find a replacement and get that organization up to speed on the operation of the City’s facilities.”
For SMG’s part, the company is looking forward to extending the agreement and asked the JEDC to begin the approval process for the extension 10 months before the contract expired, said SMG General Manager Bob Downey.
“We’d like to get the renewal option approved as soon as possible because we can’t enter into agreements to do things that are beyond the current agreement,” said Downey. “Our authorization to sign new contacts for things like staffing, advertising, event services, conventions, concessions and union agreements ends next Sept. 30.”
Downey also said he doesn’t see any reason the agreement won’t be extended based on SMG’s performance to date.
“The City looks at how we perform. We’re evaluated often. The City’s facilities are clean, well-maintained and well-operated. There are a few other companies out there that do what we do, but we’re far and away the largest,” he said.
According to figures provided by the JEDC, the City pays SMG $962,883 annually to manage the six facilities. In FY 2006-07, the six facilities showed a combined net loss of $8,699,420, including SMG’s fee. The City subsidizes the loss each year and doesn’t expect that to ever change.
“Cities do not typically show any profit with sports and entertainment facilities. They are built in order to provide citizens with entertainment and not to be profit-makers for the cities,” according to Public Information Officer Ginny Walthour.
Downey said recent developments in how music is distributed are creating major changes in the concert-venue business and making it even more difficult to break even on any show, even a sell-out like when Tim McGraw and Faith Hill bring their act to the Arena. Performers who have for years depended on sales of their recordings for their income now find their product available on the Internet where it’s downloaded by fans instead of purchased in the retail market.
“It’s becoming almost like a feeding frenzy among venues. Performers used to make a lot of money selling their CDs, but not any more, so they have to make their money on live performances. There’s very little sharing (of ticket revenues) any more. It’s getting to where we almost have to pay the acts to come here,” said Downey, who added, “It’s our job to protect the City and keep the subsidy as low as possible.”
Venues by the numbers
The following chart was provided by the Jacksonville Economic Development Commission. It shows the six venues SMG manages on behalf the City, how many events were at those venues during the 2006-07 fiscal year, the attendance at those events and how much the venue generated or lost.
Jacksonville Municipal Stadium
Jacksonville Veterans Memorial Arena
Baseball Grounds of Jacksonville
Times Union Center for the Performing Arts
Prime Osborn Convention Center
Jacksonville Equestrian Center
Notes:
*Event revenue and expenses are directly related to hosting an event at the facility. Examples of revenue include parking fees, concession sales, facility rental, etc.
**Examples of the expenses include ushers, stagehands, ticket takers, parking lot attendants, police, etc.
***Non-event revenues include suite/club seat licenses, sponsorships, etc. ****Non-event expenses are those expenses associated with running the facility on a daily basis and include utilities, repairs & maintenance, etc.